In exercise of the powers conferred by subclause i of clause b of subsection 1 of section 110A of the Motor Vehicles Act

## Policy Analysis Report: Notification on Defect Reporting Thresholds for Motor Vehicles **1. Executive Summary:** This report analyzes a notification issued by the Ministry of Road Transport and Highways, Government of India, concerning the percentage of vehicle owners required to report an identical defect to trigger action under the Motor Vehicles Act, 1988. This notification specifies thresholds based on annual sales volume for different vehicle categories (2W, 3W, M1, M2, M3, N1, N2, N3, T3, T4). The core purpose of this notification is to establish clear, quantifiable criteria for initiating vehicle recalls based on owner-reported defects. The key finding is the establishment of tiered percentage thresholds based on sales volume and vehicle type. **2. Introduction:** This report provides an overview and analysis of the Ministry of Road Transport and Highways notification S.O. 1232(E), dated March 11, 2021. The analysis focuses on the key provisions and changes outlined in the notification and their implications for the automotive industry and vehicle owners. It is based solely on the text of the provided notification. **3. Policy Overview:** This notification appears to be an amendment or clarification of existing procedures related to vehicle recalls under the Motor Vehicles Act, 1988, specifically section 110A(1)(b)(i) and rule 127C of the Central Motor Vehicles Rules, 1989. * **Core Objective(s):** Based on the text, the primary objective is to specify the percentage of vehicle owners who must report an identical defect to trigger a formal review or recall process. This aims to provide a clear and objective standard for initiating action based on consumer feedback. **4. Background and Rationale:** This notification is likely an amendment to address ambiguity or lack of clarity in the implementation of existing vehicle recall regulations. The absence of specific percentage thresholds could have led to inconsistent application of the recall process. The rationale appears to be to introduce a transparent and quantifiable system that balances consumer protection with the practical considerations of the automotive industry and the scale of vehicle sales. **5. Key Provisions / Changes:** This notification details the *new* rules and provisions for the percentage of owners reporting identical defects to trigger a recall review: * **Specific Part of Original Policy Being Changed:** This notification clarifies the threshold for triggering vehicle recall procedures outlined in section 110A of the Motor Vehicles Act, 1988 and rule 127C of the Central Motor Vehicles Rules, 1989. * **New Rule/Provision:** The notification establishes a tiered system of percentage thresholds for defect reporting, varying based on the annual sales volume of the vehicle model and the vehicle category. * **Two-Wheelers (2W):** * Up to 3,000 units: 20% of sales * 3,001-60,000 units: 6,00 units + 10% of sales beyond 3,000 * Over 60,000 units: 6,300 units + 2% of sales beyond 60,000 * **Three-Wheelers and L7 Category:** * Up to 500 units: 20% of sales * 501-10,000 units: 100 units + 10% of sales beyond 500 * Over 10,000 units: 1,050 units + 2% of sales beyond 10,000 * **M1 Category:** * Up to 500 units: 20% of sales * 501-10,000 units: 100 units + 10% of sales beyond 500 * Over 10,000 units: 1,050 units + 2.5% of sales beyond 10,000 * **M2, M3, N1, N2, N3, T3, T4 Categories:** 3% of annual sales. * **Difference/Effect of the Change:** This change introduces a clear, quantifiable standard for triggering the recall process. This reduces ambiguity and provides a framework for manufacturers and regulatory bodies. The tiered structure acknowledges that a fixed percentage may be inappropriate for vehicles with vastly different sales volumes. **6. Target Audience and Stakeholders:** The primary target audience is the automotive industry, including vehicle manufacturers and dealers. Other stakeholders include: * Vehicle owners and consumer advocacy groups. * The designated officer under rule 127C of the Central Motor Vehicle Rules, 1989 * The manager of the Vehicle Recall Portal. **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** The Ministry of Road Transport and Highways is the issuing authority. The Vehicle Recall Portal and the designated officer under rule 127C are responsible for implementing the notification. * **Timelines/Procedures:** The notification specifies that the manager of the Vehicle Recall Portal must inform the designated officer when the specified percentage of owners reports an identical defect. * **Implementation Specific to the Changes:** The implementation requires the Vehicle Recall Portal to accurately track and calculate the percentage of complaints relative to sales volume for each vehicle model. Manufacturers will need to closely monitor defect reports and be prepared to respond when the specified thresholds are met. **8. Expected Outcomes / Impact of Changes:** The intended outcome is a more consistent and transparent vehicle recall process. * **Likely intended outcome of these specific changes:** The tiered thresholds aim to balance consumer protection with the practical realities of automotive manufacturing. It should also reduce the administrative burden of investigating minor, statistically insignificant defect reports, while ensuring that serious widespread issues are addressed promptly. **9. Conclusion:** The Ministry of Road Transport and Highways notification S.O. 1232(E) introduces a crucial clarification to vehicle recall procedures by establishing specific percentage thresholds for defect reporting. This amendment provides a more transparent and objective framework for initiating vehicle recalls, balancing the interests of consumers and the automotive industry. The introduction of a tiered system based on sales volume demonstrates an understanding of the diverse nature of the Indian automotive market. While this clarifies the trigger for recall procedures, further policy or regulation might be needed to make sure these regulations remain up to date with the ever changing automotive industry and technology.

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