CRI听力:Quality Required against New Vehicle Recall Rules

The new Administrative Regulations on Defective Automotive Product Recalls were issued last Tuesday and will take effect on January 1, 2013. It outlines severe financial penalties if manufacturers and dealers fail to recall problematic vehicles or inform car owners. Serious offenders could face a fine of 1 to 10 percent of their sales revenue of defective vehicles, or even have their manufacturing licenses revoked.

Because Chinese brand auto companies have less recall experience than foreign brands, some analysts say they will face more challenges than their foreign rivals and joint ventures.

Shang Yugui, vice sales general manager of Great Wall Motor, one of China's leading auto brands, says domestic brands tend to avoid recalls because many companies think it will harm the brand's image, but that isn't the case.

"Actually it is normal for auto companies recall their vehicles when defects are found. It shows a company's honesty and responsibility towards its customers. It gives credit to the company instead of damaging the brand."

Shang says the tougher penalties will also force auto companies to pay more attention to raising their product quality, which is good for the industry. Shang adds that his company has prepared for the new rules.

"We conduct strict quality checks during the production and R&D process to reduce defects; purchase auto parts from credible suppliers; and develop the sales and service systems to ensure an efficient recall when problems are found."

Su Hui is the deputy director of the Auto Market Branch of China Automobile Dealers Association. He says Chinese self-owned brands should instead seize the opportunity to improve themselves as the new regulations affect all cars.

"The new regulations offer a platform for fair play. Good quality domestic brands will face exactly the same environment as joint ventures and foreign brands. All companies, regardless of their ownership, have to recall their vehicles if defects are found."

China, which replaced the US as the world's largest automobile market in 2009, recalled 56 groups representing 1.36 million units in that year.

During the past three years, there were only six domestic auto recalls.

For CRI, I'm Abhijan Barua.