Maiden recall move given big hand
By Wang Yu (China Business Weekly)
Updated: 2004-06-29 11:36

Still, the high-profile recall mechanism is far from enough to fully secure onsumers' interests.

"To us auto buyers, the recall system is of course a blessing. It demonstrates that carmakers are responsible for and concerned about consumers' safety. And more importantly, it exerts a modeling effect for other makers to follow suit," said Zhou.

However, Zhou pointed out that the recall can, by no means, serve as a cure-all, since it still cannot fend off cheaters or mechanical problems.

Workers repair a Mazda 6 sedan. FAW Car Co Ltd, the Shenzhen-listed arm of China's biggest automaker, First Automotive Works Corp (FAW), decided recently to recall 30,000 Mazda 6 sedans because of problems with fuel tanks and vent pipes.[newsphoto]

"On the one hand, those cars recalled may not be questionable, and on the other hand, those really problematic ones may not be in the list to be recalled. Besides, if the enterprises do not want to shoulder the responsibility for those real inferior products, it is still hard to seek third-party testing and to collect proof," Zhou said.

Endorsing Zhou's opinion, Jia Xinguang, top analyst with the China National Automotive Industry Consulting and Development Corp, said that despite the applause the recall mechanism has earned, he is more concerned about the "Three Guarantees" -- universal quality warranty system of any product in China -- meaning guarantee of refund, repair and change of flawed goods.

"What the recalling system can apply to is quite narrow, and many complaints and disputes on quality problems may only be settled down by resorting to the 'Three Guarantees' mechanism," Jia said.

Only when both the "Three Guarantees" and the recalling system work together, will consumers' interests be fully secured," Jia emphasized.

Implementation

FAW Car Co Ltd, the Shenzhen-listed arm of China's biggest automaker FAW, decided recently to recall 30,000 Mazda 6 sedans with problems on fuel tanks and vent pipes.

The recall affects Mazda 6 sedans produced at FAW Car's plant in Northeast China's Jilin Province from December 26, 2002 to March 25, 2004.

The problems are likely to result in fuel tanks distorting and even melting. The firm has not received complaints from customers.

It is the first time that local-manufactured sedans are recalled voluntarily, and the move has won warm welcome from both the market and the media.

"It is an act that should be endorsed and encouraged," Jia said.

However, it is hard to predict the real implementation of the recall, Jia commented during an interview with china Business Weekly late last week.

"Converting a recall decision is much more complicated issue that just showing an attitude and making a stir. In China, it is difficult to identify and find the very vehicles , since the customer information tracking system here is not so developed as that in mature markets," Jia said.

Smooth implementation usually requires co-efforts from relevant government departments, sales agents and car manufacturers.

However, nowadays in China, there are few records on frequent mechanical problems from traffic accidents watchdogs, car sales outlets and even automakers themselves, which makes finding and tracking problematic vehicles a real headache, Jia stressed.

"Given that, I suppose it is very hard to forecast the real effect of the recall policy implementation," the auto analyst said.

China's auto recall mechanism is a combination of both the compulsory system in the United States' and Europe's voluntary one.

Although it was designed to protect consumers' rights, lots of analysts doubt the system will work out as people expect, because its punishment mechanism against violations is too light and it lacks relevant implementation measures.

"Apparently, our recalling mechanism combines merits of both the United States and Europe systems. But it is actually neither powerful nor strict. And more importantly, it lacks a proper environment for practical implementation," Jia commented.

FAW's recall in China coincided with Mazda Motor's recall of 130,500 sedans in overseas markets.

FAW Car's recall is also the first of its kind in China since the Chinese Government issued automobile recall regulations on March 15, which will be officially put into practice on October 1.

FAW Car applied to China's General Administration of Quality Supervision, Inspection and Quarantine recently to recall the Mazda 6 sedans.

"Officially, FAW is a trailblazer in terms of launching the first recall campaign. However, similar maintenance and repair acts are carried out by Guangzhou-Honda and other local carmakers," Xing Lei, managing editor of China Business Update, commented.

"My stance is: Whether being the first or not is not important, the priority should be implementing the system and bringing real benefit to consumers ," Xing added, supporting Jia's points.

Over the past two years, a slew of foreign automakers, including Honda Motor, Mercedes-Benz, Mitsubishi Motor and Nissan Motor, have recalled faulty vehicles sold or made in China.

Although it is a common practice in developed markets, automobile recalls are new to Chinese customers.

Due to auto safety concern, the government's quality control watchdog -- State General Administration for Quality Supervision, Inspection and Quarantine -- enacted a long-awaited regulation allowing the recall of flawed automobile products on March 15 this year.

The regulation, scheduled to take effect on October 1, is expected to enable Chinese consumers to have their faulty cars fixed, especially in cases where foreign automakers exclude China in their recalls of defective products.

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