RJA November-December 2014 Automotive

Rubber Journal Asia Automotive

A year of safety recalls The automotive industry has been up against

According to NHTSA, recalls are not unusual. It says that since 1966, more than 390 million vehicles, 46 million tyres, 66 million pieces of motor vehicle equipment, and 42 million child safety seats have been recalled by manufacturers.

Another country that sets high standards is Australia. It has a safety rating (on a scale of 1-5 stars) programme through its multi-agency supported Australasian New Car Assessment Programme (ANCAP). Vehicles that demonstrate structural integrity and best safety systems merit high ratings in ANCAP’s crash tests.

challenging episodes in the outgoing year of 2014, and not only with vulnerable sales and production woes. What has tainted its rosy prospects is the number of recalls, which bear unwanted consequences for manufacturers, says Angelica Buan in this report.

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ike a phoenix rising from the ashes, the Tyres and parts attribute to recalls automotive sector is on its way to recovery from ehicles are complex structures that are made up the wide-scale financial crisis that razed it nearly to of different parts. Many automotive parts are immobility, as several industry studies predicted. made from natural or synthetic rubber materials, The Boston Consulting Group (BCG) says in being non-conductive to heat as well as resistant to its latest report that the sector’s rebound is seen corrosion and most chemicals used in the car, thus benefitting the OEMs and component makers. adding to the safety of cars. However, these polymers Putting a figure to the forecast, another consultant are also prone to wear and tear, especially if exposed Ernst & Young says that global car sales are set to to extreme temperatures, as they are not infallible to increase to 116 million units in 2020 from 81 million defects. in 2012.

Rubber tyres, hoses (air and radiator hoses), Amidst the optimism, and ruling out certain gaskets, electrical common variables “….since 1966, more than 390 million wiring covers, such as poor road and shields for infrastructure vehicles, 46 million tyres, 66 million electrical parts and and government regulations that pieces of motor vehicle equipment, and spark plugs are all critical components inhibit the sector’s 42 million child safety seats have been of vehicles, and revenue growth, if damaged or one issue that has recalled by manufacturers..” defective may cause inadvertently burst injurious or fatal road mishaps. the sector’s optimistic bubble is the number of safety In a recent tyre recall in September, NHTSA recalls in the recent years, peaking at record high listed Wild Country Radial XTX Sport tyres made by this year.

Cooper Tire and Rubber Company being recalled by Florida-headquartered tyre supplier TBC Corporation Safety on the roads (TBC). The reason for the recall was that the affected lobally, road safety is a major concern, so much tyres could experience cracking or broken ply cords so that 2010-2020 has been declared as the in the lower sidewall on the white sidewall side, Decade of Action for Road Safety. which could lead to a sudden loss of air pressure and The World Health Organisation (WHO) in its increase the risk of tyre failure and a crash.

2013 report covering road safety in 182 countries (or Likewise, in May, losing the spare tyre was the 99% of the world’s population) finds that about 1.24 reason for a recall by Japanese automotive maker million road traffic deaths occur a year. It said that Toyota. The firm, which recalled 450,000 vehicles sold road traffic injuries are the eighth leading cause of in states that use road salt to melt snow and ice, said death globally. that the road salt can corrode the cable which holds Thus, agencies like the National Highway the spare tyre carrier and let the tyre roll off.

Traffic Safety Administration (NHTSA) a known Recently, Swedish car maker Koenigsegg vehicle safety watchdog in the US, ensures that Automotive recalled one unit of its 2013 Agera sold manufacturers adhere to safety issues like recalling in the US, also due to a tyre problem. According to vehicles with safety defects or which fail to meet NHTSA, the car’s tyre pressure monitoring system federal safety standards.

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Rubber Journal Asia Automotive may not illuminate the malfunction indicator light approximately 802,000 vehicles globally had a faulty when the vehicle is restarted, and may not alert the brake system, which could crack and result in leaks driver that there is a problem with the tyre. of the brake fluid.

Early this year, South Korea’s Kia Motors recalled Thus, Toyota will replace a rubber seal ring in its 2014 Kia Sportage vehicles over issues on tyres, the brake master cylinder to prevent the brake fluid rims and equipment that likely affected some 11,961 from leaking. If brake fluid has already leaked, units. The vehicles, which were manufactured from the brake booster will be replaced. Another set of September 2013 to January this year, did not conform recalls affecting 759,000 vehicles globally was due to the Federal Motor Vehicle Safety Standard (FMVSS) to a faulty fuel delivery pipe system, which could 110. The affected vehicles bore certification labels result in a leak and increase the risk of the vehicle with incorrect tyre pressure information printed on catching fire. the labels, listing a specification that is 1 or 2 psi Gasket leak was also the grounds for recalling the below the correct information. Maintaining tyre 2011 Cadillac AWD CTS in June this year, affecting pressure below the recommended specification could 18,279 units. The leak could cause the rear propeller result in premature tyre shaft to separate or wear, increasing the risk “…Although safety is a concern become loose, making of a crash. contact with the vehicle in the region, regulations to In the US, Honda floor above and causing Motor also recalled 9,817 ensure it are still weak and not the rollover sensor to 2014 Honda Civic LX deploy the roof rail air implemented…” cars due to possible tyre bags, according to its damage, which could manufacturer General cause the tyre to lose air, increasing the risk of a Motors (GM). crash.

South Korean automotive maker Hyundai also Meanwhile, Toyota recently in October recalled recalled some 419,000 vehicles in August this year 1.75 million cars over faulty brake installations and due to malfunctions of the brakes, electrical and fuel components. The Japanese car maker said that suspension parts.

Rubber Journal Asia Automotive Safety check on Asian cars and dealers within China. Automotive recalls will be ost of the reports of recalls of vehicles are from deemed as a matter of protection of public interest and developed countries and not much has been heard follow stricter penalties. A three-tier system of penalties of in Asia. Nevertheless, findings on Asian road safety could include fines of up to US$1.6 million for a global do not suggest that vehicles in the region are on safe automotive brand. ground.

Although safety is a concern in the region, Cost of recalls regulations to ensure it are still weak and not ecalls of vehicles have consequences to implemented. manufacturers, costs being the most obvious. Car Based on the 2013 road safety report by the WHO, makers who pull out units from distributors or recall countries in Southeast Asia are without comprehensive vehicles that have already been sold are burdened with laws in the five key risk factors for road traffic injury the repair, legal, and image costs – the latter having an namely, speeding, drunk-driving, use of head gears, impact on the maker’s brand. seat belts, and child restraints –the latter two issues also GM has been embroiled in a recall fracas: firstly counted among the grounds for recalls, as assessed by with safety issues in its cars, and secondly for delaying NHTSA. the recall of its cars previously reported with defective Globally, WHO said that only 28 countries, ignition switches that was responsible for some 21 representing 449 million people or 7% of the world’s fatality claims. The firm reportedly recalled more than population, have adequate laws that address all these 29.1 million vehicles in August and had US$2.5 billion five risk factors. worth of recall-related However, the New Car repairs in the first half of “…Recalls of vehicles have Assessment Programme the year. for Southeast Asia consequences to manufacturers, Toyota, which also (ASEAN NCAP) has been leads in the volume of costs being the most obvious….” recalls (an estimated established to “ elevate vehicle safety standards, 5.3 million in 2012 and raise consumer awareness and thus encourage a market 2013), paid US$1.2 billion in March this year relating for safer vehicles in the region”. It has provided safety to criminal charges over issues on accelerator pedals nets for consumers of regionally-produced and available and floor mats, which led to sudden acceleration and cars. The programme is able to assess the safety of crashes. The following month, the firm instituted various vehicles, including Malaysia-made Proton and another batch of recalls, affecting 6.36 million vehicles Perodua cars well as Honda, Ford, Tata, and Kia, to globally. name a few.

However, motorists will contend that the financial ASEAN NCAP, which is a part of the UK-based losses the automotive makers incur will be negligible initiative, Global NCAP of the UN Road Safety compared to the lives that will be saved, especially Collaboration, will see that cars that are allowed to if recalling faulty vehicles means ensuring road and enter the market are not only roadworthy but also driving safety. crashworthy, or how a car performs in the event of a road crash to protect the occupants.

Not a dead end As for crashworthiness, Tata’s Nano car, India’s oncern over compliance to safety regulation has low cost counterpart to Volkswagen’s Beetle that was become a Damocles sword for manufacturers as well launched in 2009, has failed to merit the Global NCAP as consumers. Nonetheless, the number of recalls does not rating for adult protection rating, and reportedly necessarily affect how the automotive sector progresses. fell short of meeting the most basic UN safety Citing latest indicators for growth, IHS Automotive requirements. says in its report that the global automotive market will Along with the Nano, other cars tested for safety by continue to propel; and global annual production will Global NCAP were Suzuki-Maruti Alto 800, Ford Figo, continue to increase by 21 million units by 2021.

Hyundai i10 and Volkswagen Polo, all of which were For Autofacts, the analyst group of not fitted with airbags.

PricewaterhouseCoopers (PWC), it projects a continued Early last year, China, the world’s largest car sales and production growth, despite the increasing market, also implemented a new automotive recall law, incidences of vehicle recalls, which it anticipated to which it approved in late 2012, and that supersedes surpass the 100 million-unit mark by the year end. the Provision on Defective Automotive Products Recall This growth will be driven by the EU and the North Administration of 2004.

American markets, along with the ongoing expansion in The law will ensure strict compliance from both Asia, it said, adding that a 2.2 million-unit increase in domestic manufacturers, including joint ventures passenger car production is on cue in Southeast Asia by with foreign car manufacturers, foreign car importers 2020.

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