Maruti recalls 100,000 A-Stars on tank defect
Feb 23 2010
Tags: A Star, Maruti A-Star, Maruti Loss Recall, Maruti Recall, Maruti Suzuki India, Nissan Alto, Suzuki Pixo, Stock Market
50,000 A-Stars have already been rectified
Maruti said A-Star’s tank could spring a leak when filled to the top.
It’s now Maruti Suzuki’s turn to recall cars. The country’s largest carmaker is recalling 100,000 A-Star cars manufactured between November 19, 2008 and August 22, 2009 to fix a fuel tank defect.
Maruti said A-Star’s tank could spring a leak when filled to the top and it is replacing the fuel pump gasket and O-ring in cars sold in India and abroad.
“We had noticed that the components had a problem in November last year. However, we have not received any complaints from the users here,” said Shashank Srivastava, chief general manager of marketing at Maruti Suzuki India.
Of the 100,000 cars found to have defective components, 60,000 have been sold abroad, mostly in European markets. Of these, around 36,000 had already been rectified. Of the domestic sales, the gasket and O-rings have been changed in 40 per cent or around 16,000 A-Stars, Srivastava said.
The company did not give any explanation about why it had taken almost three months after identifying the defect to make the announcement. Nor did it name the supplier of the defective parts.
This is the largest recall ever by a car company in India. Toyota and Honda have recently been hit by recalls abroad. Toyota recalled at least two models for acceleration and brake defects. Honda had recalled 8,532 of its City cars to rectify power window switch in India last month.
A-Star is the company’s flagship overseas model. It is rolled out only from India. “In Europe, you have to recall the cars as it is the law there,” Srivastava said.
The company said in a statement that in an internal exercise on quality in November last year, the company came across an anomaly in the fuel tank in some of the vehicles. “We started contacting the A Star users through letters in December 2009,” the statement said.
“We are midway through the checking activity and hope to complete it soon. The final cost arrived at on this account will be shared with the supplier partner,” the statement said.
Srivastava said he was not aware of the cost of the parts that need to be replaced.
But, a source at Maruti’s biggest authorised service station in the capital said, “The fuel pump gasket and O Ring cost Rs 200 each.” This means the total expenses will be around Rs 4 crore.
“The parts can only be replaced at the service station,” the source said. He did not provide the labour cost for the change.
In 2008-09, Maruti exported 70,023 cars. It expects overseas sales to cross 130,000 cars this financial year, of which about 100,00 to 110,000 would be the A-Stars.
The company had issued the statement on the recall in the morning. Shares of Maruti Suzuki on the Bombay Stock Exchange fell 3.24 per cent (Rs 44.80) a share to Rs 1,336.85. BSE Auto Index was down 1.82 per cent.
Nissan Motor sells the A-Star as Pixo in the European markets under a contract manufacturing agreement with Suzuki Motor, the parent company of Maruti Suzuki. In other European markets, it is sold as the Suzuki Alto.
Two analysts tracking the auto sector said the recall may hamper Maruti’s brand image.
“I think there has been an impact on sentiment considering what is going on globally,” Vaishali Jajoo, an auto sector analyst at Angel Broking said.
“Everybody is fearing whether it can spread to other models, but I cannot guess whether that will actually happen,” Jajoo added.
“This model is Maruti’s best-selling product in the European markets and the recalls have dented the company’s image. This will be reflected in sales,” a research analyst at Prabhudas Lilladher said.
Maruti was hoping to ramp-up the export volume to the European markets in the next fiscal, but this may not happen now, he added.
In 2007-08, Maruti had recalled some of its Swift petrol and diesel variants because of noise in the front suspension and electronic control units respectively. It had also replaced speedometers in Maruti 800 and Omni as well in 2008.
(With inputs from Rajesh Abraham in Mumbai)
Maruti said A-Star’s tank could spring a leak when filled to the top and it is replacing the fuel pump gasket and O-ring in cars sold in India and abroad.
“We had noticed that the components had a problem in November last year. However, we have not received any complaints from the users here,” said Shashank Srivastava, chief general manager of marketing at Maruti Suzuki India.
Of the 100,000 cars found to have defective components, 60,000 have been sold abroad, mostly in European markets. Of these, around 36,000 had already been rectified. Of the domestic sales, the gasket and O-rings have been changed in 40 per cent or around 16,000 A-Stars, Srivastava said.
The company did not give any explanation about why it had taken almost three months after identifying the defect to make the announcement. Nor did it name the supplier of the defective parts.
This is the largest recall ever by a car company in India. Toyota and Honda have recently been hit by recalls abroad. Toyota recalled at least two models for acceleration and brake defects. Honda had recalled 8,532 of its City cars to rectify power window switch in India last month.
A-Star is the company’s flagship overseas model. It is rolled out only from India. “In Europe, you have to recall the cars as it is the law there,” Srivastava said.
The company said in a statement that in an internal exercise on quality in November last year, the company came across an anomaly in the fuel tank in some of the vehicles. “We started contacting the A Star users through letters in December 2009,” the statement said.
“We are midway through the checking activity and hope to complete it soon. The final cost arrived at on this account will be shared with the supplier partner,” the statement said.
Srivastava said he was not aware of the cost of the parts that need to be replaced.
But, a source at Maruti’s biggest authorised service station in the capital said, “The fuel pump gasket and O Ring cost Rs 200 each.” This means the total expenses will be around Rs 4 crore.
“The parts can only be replaced at the service station,” the source said. He did not provide the labour cost for the change.
In 2008-09, Maruti exported 70,023 cars. It expects overseas sales to cross 130,000 cars this financial year, of which about 100,00 to 110,000 would be the A-Stars.
The company had issued the statement on the recall in the morning. Shares of Maruti Suzuki on the Bombay Stock Exchange fell 3.24 per cent (Rs 44.80) a share to Rs 1,336.85. BSE Auto Index was down 1.82 per cent.
Nissan Motor sells the A-Star as Pixo in the European markets under a contract manufacturing agreement with Suzuki Motor, the parent company of Maruti Suzuki. In other European markets, it is sold as the Suzuki Alto.
Two analysts tracking the auto sector said the recall may hamper Maruti’s brand image.
“I think there has been an impact on sentiment considering what is going on globally,” Vaishali Jajoo, an auto sector analyst at Angel Broking said.
“Everybody is fearing whether it can spread to other models, but I cannot guess whether that will actually happen,” Jajoo added.
“This model is Maruti’s best-selling product in the European markets and the recalls have dented the company’s image. This will be reflected in sales,” a research analyst at Prabhudas Lilladher said.
Maruti was hoping to ramp-up the export volume to the European markets in the next fiscal, but this may not happen now, he added.
In 2007-08, Maruti had recalled some of its Swift petrol and diesel variants because of noise in the front suspension and electronic control units respectively. It had also replaced speedometers in Maruti 800 and Omni as well in 2008.
(With inputs from Rajesh Abraham in Mumbai)
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