China approves stricter legislation regarding automobile recalls

The State Council has recently passed new legislation regarding the management of automobile recalls in the country, Economic Observer News reported. The legislation was first drafted by the General Administration of Quality Supervision, Inspection and Quarantine a decade ago. The new legislation will severely penalize manufacturers which refuse to adhere to recall requests and continue to produce, import or sell vehicles deemed unsafe in the country.

According to Qiu Baochang, head of the lawyers representing the China Consumers' Association, the new legislation will impose manufacturers with a maximum fine of ten percent of the retail price for each vehicle targeted for recall. If a manufacturer refuses to recall 1,000 vehicles priced at 100,000 yuan each, it risks having to pay up to ten million yuan.

China Passenger Car Association Deputy Secretary General Cui Dongshu believes that the new legislation will put greater pressure on foreign manufacturers and Sino-foreign joint ventures to ensure their vehicles are problem free by issuing recalls more frequently than they have in the past. Mr. Cui anticipates that this policy will influence domestic own brand manufacturers even more, as they do not have the financial capital to easily afford paying the high fines.