Maruti Baleno | Photo: Kamlesh Pednekar It's a recall time in the Indian car market. The current financial year started with a recall as German car maker Volkswagen recalled over 3,800 units of Vento to fix an emission issue. Since then, recall of another 188,000 vehicles has been announced.
In the past 10 days, country's largest car maker Maruti Suzuki has announced two recalls. Last week it was the S Cross, 20,427 units of which are being recalled to fix a faulty brake part. On Friday, the company said it would recall 75,419 units of its premium hatchback Baleno to upgrade the airbag controller software. These airbags were procured from Swedish component maker Autoliv. It will also recall 1,961 units of compact sedan Dzire to replace a faulty fuel filter. Of the 75,419 Balenos being recalled, almost 16,000 diesel variants will also be inspected for a faulty fuel filter, followed by a replacement if needed.
Interestingly, the Balenos being recalled also include 17,231 units that were exported to markets in Europe and Japan. The local distributors in these markets will facilitate the recall and replacement. Both S Cross and Baleno were launched in FY16 and are being sold through the company's premium retail network Nexa that was also launched last year. Almost every unit of Baleno manufactured and sold in domestic and export market is being recalled. The hatchback enjoys a waiting period of up to three months. Three-fourth of the S Cross sold in India is affected.
Between April and May, American car maker Ford has announced recall of almost 91,000 units of EcoSport, Figo and Figo Aspire to address different issues. An estimated 1.8 million passenger vehicles- cars, utility vehicles and vans- have been recalled in India since July 2012 industry body Siam introduced a voluntary recall code.
The increasing cases of recall point to the inconsistencies in the quality of components supplied by component manufacturers as car makers squeeze them to cut costs and compete in pricing of cars. R C Bhargava, chairman at Maruti Suzuki said a recall is not totally avoidable as thousands of components are used to manufacture a vehicle. "There are possibilities of error as several component makers are involved. There are challenges in ensuring consistent quality supply from the tier II component makers. Because of their small size and limited financial ability, these suppliers struggle to maintain quality in the event of rising production. We need to work towards upgrading the quality standards of small vendors," he said.
Most of the recalls in India have been happening due to quality issues from small component vendors. It is these vendors who in most cases have to bear the cost of the free replacement of component during a recall. The dealerships and service stations are burdened when a recall is executed. "It is an unnecessary headache," said Bhargava.
Recalls are not new to India, the fifth largest car market. Maruti Suzuki did its first recall in the 1980s. Most manufacturers now voluntarily announce a recall. Globally, top companies like Toyota, Honda and Volkswagen have announced recalls of millions of cars.
"Currently, product recalls are largely precautionary towards ensuring desired stated quality. Customers are aware and take the recalls as corrective process towards ensuring a trouble free product and thus most of them do not attach a stigma to it, rather many times it works positive and their confidence in the brand goes up," said Rakesh Srivastava, senior vice president (sales and marketing) at Hyundai.
A recall does not impact future sales of vehicles. Take the case of Maruti Swift and Dzire where recall happened in April 2014. Dzire and Swift have been the top selling models in the country for last two years.
Auto makers claim that there are quality issues with products in sectors like electronics and consumer durables in the country but no manufacturer recalls a product. A customer should feel more comfortable that car makers are doing voluntary and free recalls, said an industry official.