Tough local recall: How can vehicle manufacturers comply?

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Automotive | Compulsory Recall – Takata airbags

 

In an industry where an 80% replacement rate for a recall would usually be considered a success, the ACCC’s recent mandate that car manufacturers achieve a 100% replacement rate by 31 December 2020 of around 4 million cars due to defective Takata airbag inflators sounds like mission impossible.

Ambitious targets aside, the industry already had multiple complicating factors in managing this mammoth recall task.

·        The recall requires manufacturers, importers and other suppliers to locate and replace the Takata airbags inflators, in an environment where manufacturers have never been required to track ownership or change of ownership details of the vehicles they sell.

·        Some vehicles will be recalled immediately, and others on a rolling basis based on various factors including relative safety risk. This means that not all vehicles can be recalled straight away and future scheduling and databases will be required.

·        Compliance is going to require enormous support from manufacturers’ dealers and customers for manufacturers to comply.   Manufacturers’ cannot force customers to return vehicles because of the recall.

·        There are reports of a 12-month delay in supply of replacement airbags to fulfil the orders.

So how can this task be effectively managed?

Getting it right from the beginning sounds obvious but will be crucial with the tight time frame around this task.

Manufacturers are required to submit their “Recall Initiation Plan” to the ACCC by the 3rd of April 2018.  Simultaneously, they must also prepare and submit their “Communication and Engagement Plan” for approval (also by the 3rd of April 2018), while still making progress on any already commenced recall work.

The key to the success of these plans will be in the manufacturers ability to:

·        Demonstrate a clear plan for each separate stage of the recall, including a matrix of how vehicles will be identified and allocated to each stage;

·        Accurately identify what resources are needed for each stage and front-loading funding to avoid compounding any supply delays;

·        Proactively communicate with consumers providing timely updates and advising timelines that engage consumers in the process;

·        Record the document management systems and processes in place;

·        Independently audit the compliance response, management systems, work completed and schedules for reporting to the ACCC;

·        Clearly self-advocate to the ACCC and customers on areas of success.

While undoubtedly an enormous task, a clear action plan and a positive, proactive and robust communication strategy will put manufacturers in the best position to achieve mission impossible. 

Recall Background:

On 28 February 2018, the Australian government announced the compulsory recall of cars equipped with defective Takata airbag inflators.  The compulsory recall is one of the largest and most significant recalls in Australia’s history. The first compulsory recall for vehicles and follows a voluntary recall which has been deemed ineffective after extensive investigation and consultation by the ACCC.  The recall equates to almost 1 in 3 vehicles in Australia.  Brands involved include Ford, GM Holden, Mercedes Benz, Tesla, Jaguar, Land Rover, Volkswagen, Audi, Skoda, BMW, Chevrolet, Chrysler, Dodge, Ferrari, GMC, Honda, Jeep, Lexus, Mazda, Mitsubishi, Nissan, Subaru, Toyota, Volvo and Hino Trucks. 

 

Further information on the compulsory recall can be found here: www.productsafety.gov.au

Penny Brereton