Mumbai, Jan. 31: Honda’s recall of 8,500 cars is perhaps the largest by an Indian automaker. The company is calling back nearly one-third of the vehicles it sold in 2007 to replace a defective switch.
Honda’s announcement comes just a few days after Japanese car maker Toyota — world’s largest — announced a recall of 2.5 million vehicles to replace a defective gas pedal. This would be the world’s largest vehicle recall. Car recalls are not very common in India. Maruti, India’s top car maker, had recalled 500 Zens in 2005 for engine trouble. In 2006, the company recalled 2,200 Versas for some exhaust related problems. The managing executive officer (engineering), Mr I.V. Rao, said, “It is a very normal phenomenon, which happens because of mass production.” Cars are not the only products that could be recalled. For instance, around the third week of January, a Canadian firm selling baby products recalled over six lakh baby cribs after some infants were hurt. Therefore, it is surprising that India sees so few product recalls. Are products made in India defect free or is the reason elsewhere? “Manufacturers in the US are scared of leaving a potentially defective product in the market because of two reasons — product liability and class action lawsuits,” says Mr Hiroo Advani, a lawyer. “They have trial by jury where the damages can run into billions. Of course, these cases are appealed and the amount is usually reduced” he adds.In 1999, a California jury imposed a penalty of $4.9 billion on GM after a fuel tank exploded, badly burning nine occupants. Product liability is incurred when a user suffers a loss because of a defective product. The concept doesn’t exist in India. The compensations provided by Indian consumer courts are also not very high — and they don’t cover areas such as mental agony. In fact, even in the Satyam scandal of 2009, it was in the US where the first class action lawsuits were filed, says Mr Advani. There was an attempt to file a class action in India, but it was thrown out.
AGE Correspondent