A bill for tougher regulation's on defective vehicles has been approved by China's State Council.
While China enjoys pole position in global sales charts, its vehicles are often ranked the lowest in terms of quality control and consumer rights protection, according to Jia Xingguang, a Beijing-based analyst.
The US recalled 17.8 million vehicles in 2009, or 170% of annual sales for that year and Japan recalled 3.1 million vehicles, 68% of total sales. However, China recalled only 1.4 million during the same period, constituting only 10% of total sales. The market has mushroomed, but safety features on many cars have failed to keep pace, particularly at a time when Chinese manufacturers are radically cutting build costs.
China's powerful State Council has now approved the “Draft Regulations on the Administration of the Recall of Defective Automobile Products”, which stipulates that once a recurring quality problem has been identified, the manufacturers and sellers must stop production, sales and imports of the cars and instantly issue a recall, disclosing all defects.
As the new rule comes directly from the State Council, it will override any conflicting provincial regulations, eliminating grey areas and loopholes to make way for a more enforcable law. Those found to be non-compliant with the new regulations will face steeper fines of up to one million yuan ($159,600) or 50% of the goods' value, compared to the previous penalties of 30,000 yuan ($4,800) per unit.
In addition to steeper fines, the scope of the recalls has also expanded to cover car accessories, such as tyres and electronic components, which the Adiministration of Quality Supervision, Inspection and Quarantine (AQSIQ) claim comprise around 30% of all recalls.
Safety and quality control are key issues for the nation's carmakers, who are looking increasingly overseas to fill orders. In a high profile incident, Chery Automobile Ltd recently recalled 18,875 vehicles from six different countries which were found to contain unsafe levels of asbestos, while major Chinese automaker Zhejiang Geely Holding Group issued a recall for 55,018 sedans for production defects that may lead to fuel leakages.