The curious case of GM’s Tavera recall
- IRP approval must for recovering money from defaulter’s bank account: NCLAT
- Manmohan Singh to receive Indira Gandhi peace prize
- Zimbabwe president Robert Mugabe removed as party leader
- Telecom Commission to consider IMG recommendations next month for final nod
- India not to sell Cairn Energy shares to recover tax
Mumbai: Cyrus F. Karbhari is shaking his head vigorously. “No sir, you don’t understand,” he says. Well, sure, maybe. But it was a rather simple question: “It has been a while. How is the Tavera recall going?”
Karbhari, 52, general manager of Nikhil Automobiles Ltd, General Motors India Pvt. Ltd’s only facility in South Mumbai, almost always has a big grin on his face. But now he turns serious, the smile disappears and his face wrinkles.
“Getting the Tavera owners to the workshop for the recall campaign is a Herculean task,” he says.
In a nation-wide recall campaign by General Motors (GM) that began in December, Nikhil Automobiles has fared miserably. In the last four months, the workshop has serviced a paltry 114 vehicles (As of 3 April). More than 400 calls have already been made, but vehicle owners are simply not interested. The same story is playing out in the rest of the country. GM India claims that it has serviced close to 21,000 vehicles across 277 authorized service outlets in the country. That’s 75 vehicles per outlet. Over a period of four months or 121 days. That’s not even one vehicle a day.
This is a problem for a car maker that’s involved in one of the largest recalls in the Indian automobile industry—114,000 vehicles to be exact. In July, the company recalled these vehicles to address emissions and specification issues, after it was pulled up by the government for fudging emissions data on vehicles sold in the country during 2005-2013.
Of course, GM is not the only one recalling its cars. On 11 April, Maruti Suzuki India Ltd announced the recall of 103,311 units of the Ertiga, Swift and Dzire models, and on 10 April, Toyota said it was recalling 45,000 units of its utility vehicle Innova to fix a defect in the steering column, as part of a global recall of 6.39 million vehicles.
In the last four years, several companies including the likes of Maruti Suzuki, Ford India Pvt. Ltd, Honda Motor India Pvt. Ltd and Tata Motors Ltd, among others, have voluntarily carried out recalls to take care of glitches that found their way into cars sold by them.
GM finds itself in a spot. If its recall campaign continues at the current pace, it will take the company 15 months more to complete the whole exercise.
The company says it is not worried. “We find the customer response encouraging,” said P. Balendran, vice-president at GM India.
Dealers tell a completely different story—where it has been expressly communicated to them that this whole affair must not last that long. That’s why GM is offering sizeable incentives to its dealers. For every Tavera serviced in the recall campaign, the service outlet gets the replacement kit free of cost, plus reimbursement of labour charges to the tune of Rs.2,500 per car. That’s twice what a workshop earns from a regular service (Rs.1,200) per car. No surprise then that Karbhari is worried. He wants his workshop to make that money. But then there are not enough cars coming in.
None of this makes any sense to Sachin Wagh, a Tavera owner who bought the vehicle in early 2011 and uses it as a tourist taxi in Maharashtra.
“I don’t know what this campaign means,” he says. “When I got the call from the workshop, I asked them. They said a part needs to be changed because it is compulsory by the Regional Transport Office to keep pollution in check. But none of my other friends who have vehicles of Maruti have got any call.”
There is another problem. Wagh’s Tavera has just been too busy ferrying customers. “My vehicle remains out of Mumbai from Monday to Saturday. On Sunday the workshop has a holiday. So I have not been able to go,” he says.
Some 60-70% of the Taveras sold by GM have been taken up by the tourist taxi segment. For the fleet owners, their income depends on how many kilometres the car clocks every day.
“So when I ask them to get the car to the workshop for one-and-a-half days (that’s the time needed for repair), they just don’t want to do it. Remember that the car is running fine—in terms of fuel efficiency or pick-up. This is an emissions-related recall, not safety,” says Kharbari.
A recall takes time. For instance, Ford India, which announced a recall in September 2012, has almost completed its recall of 166,000 units of the Figo and the Classic in about 18 months. In comparison, GM is going pretty slow. But then companies like Ford were dealing with personal buyers.
“A lot rests on what customers believe—whether it is a safety issue or not (emission certainly is not a priority for car owners, recall or no recall). Plus you have to open multiple channels to reach the customer,” says an official of an auto company which carried out one of the largest recalls in the country.
This person requested anonymity because he is not authorized to speak on the matter.
For Wagh, it is also a question of trust. “My friend asked me,” he says. “Is your car running fine? I said yes. So don’t take it to the workshop. What if they change some part and the fuel efficiency drops,” he says. For Karbhari, this issue boils down to the perennial problem of customer retention in the automobile industry.
That’s not all. Things take a turn for the worse when it’s been a while: like in this case where the recall is spread over eight years, from 2005-2013.
In Mumbai alone, a lot has changed. National Garage, GM’s flagship dealer in South Mumbai, shut shop in 2009. So did Bharati Automobiles in the western suburbs. And Gian Motors in central Mumbai. Each of these dealerships sold the Tavera. Now, it is an open question as to who will reach out to those customers.
No wonder Godfrey Vaz is pretty upset. Vaz owns a 2005 Tavera and hasn’t received any call till date. “I bought the car from Bharati Automobiles but they shut down,” he says. “I read about this recall in the newspapers but I didn’t know what to do about it. Nobody has called me from GM.”
Balendran of GM doesn’t buy this. “The advertisements have been released,” he says. “Notice has also been published in both national and regional newspapers. Reminders and follow-up calls are also being made to the customers. It’s there on our sites as well. We have notified all the Tavera customers in our database between 2005 and 2013.”
That’s apparently not quite enough.