Toyota Motor recalls 22,869 Lexus cars in China as law broadens liability

New mainland liability law spurs firm to order back 22,869 vehicles

PUBLISHED : Friday, 01 February, 2013, 12:00am
UPDATED : Friday, 01 February, 2013, 5:23am

Toyota Motor has voluntarily recalled 22,869 Lexus cars on the mainland because of defects with windshield wipers, the biggest call-back since a new law broadening manufacturer liability came into force this year.

The company recalled the imported Lexus IS cars, which were made from January 2006 to September 2011, according to a statement on the website of the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ).

Toyota said it recalled almost 1.3 million vehicles worldwide because of defects associated with airbags and window wipers.

The mainland is stepping up protection for consumers as carmakers from General Motors to Volkswagen seek to expand sales in the world's largest car market.

The new law allows the government to order investigations and impose fines should manufacturers and importers fail to recall faulty vehicles in a timely manner.

A separate rule mandating minimum standards for warranties comes into effect from October.

"Definitely, it will increase costs," said Paolo Beconcini, a managing partner at Carroll, Burdick & McDonough in Beijing, whose firm advises European and United States carmakers in China on product liability, safety, and intellectual property issues.

"Car manufacturers will have to invest more resources internally to have people working on investigation, supporting the work of AQSIQ," Beconcini said.

Under the new law, the government can levy fines on manufacturers and importers of as much as 200,000 yuan (HK$249,000) for failing to keep proper records, to as much as 10 per cent of the value of the defective vehicles for refusal to recall. Serious violations can result in a revocation of licences.

Before this law, carmakers that avoided recalling defective vehicles were fined up to 30,000 yuan.

The term manufacturer had been redefined in the new law to include importers to ensure responsibility for imported vehicles that may be faulty, Beconcini said.

Allen Lyu, the head of Nissan Motor's Infiniti brand in China, said carmakers needed some time to see how the new policies would be executed.

"The policy will boost product quality," said Zhu Fushou, the president of Dongfeng Motor, which makes passenger vehicles with Nissan and Honda Motor. "It will also help squeeze out inefficient companies. It is better to take proactive measures rather than passively accept it."