2nd March, 2018 · Service & Repairs Policy

Takata Airbags Proposed Compulsory Recall Notice

Issue

Dealers are at the coalface of vehicle recalls and are responsible for dealing with affected owners and carrying out the rectification work as soon as possible. Dealers work diligently with OEMs to meet the requirements of a recall but the global scale of the Takata airbag recall presents significant challenges such as logistical difficulties in securing supply of replacement parts, contacting the owners of affected vehicles, and scheduling of workshop facilities. The proposed compulsory recall notice specifies a timetable for rectification based on the safety risk of particular airbags. The ACCC is urged to carefully consider the supply chain constraints and significant additional costs of a compulsory recall before making a recommendation to the Minister.

Background

The proposed recall notice specifies a timetable for rectification, and refunds to consumers where replacement does not occur within a specified period of time and alternate transportation acceptable to an affected consumer is not provided. In addition, the notice requires OEMs to take a range of steps to locate owners of affected vehicles, consumer communications, record keeping requirements, dispute resolution processes and salvage plans.

The draft recall notice specifies a timetable for rectification based on the safety risk of particular airbags:

  • Alpha airbags – within one business day of a consumer contacting the supplier or within one business day of such other date as requested by the consumer
  • Non-alpha airbags more than five years old – as soon as practicable and within one month of the supplier being contacted by the consumer
  • Other inflators – within six years of manufacture and by 31 December 2020

The global scale of the Takata airbag recall presents significant challenges for manufacturers, dealers and government in protecting the safety of consumers. Dealers will work with OEMs to meet any requirements placed on them by a mandatory recall but defer to the OEMs on the ability to meet timelines, communicate with consumers and supply replacement parts. While consumer safety is paramount the ACCC needs to be cognisant of supply chain constraints and consumer apathy in achieving acceptable recall completion rates before making a recommendation to the Minister in respect of the issue of a compulsory recall notice.

Key points

  • The global scale of the Takata airbag recall presents significant challenges for the Government, OEMs and dealers in ensuring consumer safety and rectifying affected vehicles in a timely manner.
  • Dealers will work with the Government and OEMs to meet any requirements placed on them by a compulsory recall.
  • The requirements of a compulsory recall notice will impose significant additional costs on the ability of OEMs to meet timelines and communicate with the owners of affected vehicles.
  • The ACCC should carefully consider whether a compulsory recall notice will mean result in better consumer outcomes.

Status

The ACCC is considering whether to recommend that the Assistant Minister to the Treasurer, the Hon Michael Sukkar MP issue a compulsory recall notice in respect of Takata airbags.