SIAM policy of Automotive Recall, A study of Trends and Reasons in Relation to Automotive Recall

Abstract

With the adoption of voluntary code of recall in July 2012, which was rolled out by SIAM in India; more and more automakers are recalling vehicles to correct the defects. A lot of effort and processes focus on to minimizing the defects in automobile industry. There still exists a possibility of defective parts reaching the car customer which eventually leads to a recall. There has been a significant rise in automotive recalls due to supplier defects in last seven to eight years. These recalls can have deep effect on significant numbers of car users, and in worst case the result could be loss of life and serious accidents. The defective parts can threaten the car companys image if no appropriate action is taken on time. There is need for strong handholding between automotive OEMs and supplier to take ownership of recall. As a result of disruption in automotive industry due to electric car and connected vehicle, the recall as a policy need serious rethinking. Influenced by the sudden surge in recalls after SIAMs code acceptance and highlighting the importance of recalls, this study attempts a trend analysis for the Indian market that would be first of its kind. The study shows that the recalls have affected almost all the auto OEMs in India. The extent to which the carmakers must face the unwanted recalls can be indicated by recall rates. The recall rates can be a useful tool to assess the process performance in the car design and production chain. Our analysis suggests that despite the dark side of automotive recalls, there could also be a silver lining once looked beyond current disruption in the sector. Results of automobile recall trends and reasons will be beneficial for the carmakers, government agencies, trend analysts, insurance companies and researchers.