China’s State Council has recently passed a new legislation concerning the management of automobile recalls.
The General Administration of Quality Supervision, Inspection and Quarantine was the first to draft the legislation 10 years ago. According to the new legislation automakers who refuse to adhere to recall requests and will continue to manufacture, sell or import vehicles considered unsafe in China, will be severely penalized.
Qiu Baochang, head of the lawyers representing the China Consumers’ Association, says that automakers will be fined 10% of the retail price for each car targeted for recall. For example if an automaker refuses to recall 1,000 cars priced at 100,000 yuan each (~12,000 euro), it risks a fine of 10 million yuan.
China Passenger Car Association Deputy Secretary General Cui Dongshu expects the new legislation to put more pressure on foreign automakers and JVs to make sure that the vehicles produced for China are problem free, by issuing recalls more frequently than before.
Last year China recalled vehicles 82 times, 38 of them issued for Chinese-made cars and 44 for imported models, compared with 60 domestic and 63 imported recalls made in 2010. The increase in vehicle recalls was due to the rapid growth of domestic auto market and an improvement in the automakers’ ability to ensure both car quantity and quality control.