Maruti sees no major liability due to A-star recall

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Maruti sees no major liability due to A-star recall

RC Bhargava, Chairman, Maruti Suzuki India said the company is acting as a responsible car manufacturer. "We have been replacing the gaskets for all customers."

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Maruti Suzuki India , the country's leading carmaker, is recalling 100,000 A-Star hatchbacks to fix a fuel leakage problem. 

In an interview with CNBC-TV18, RC Bhargava, Chairman, Maruti Suzuki India said the company is acting as a responsible car manufacturer. "We have been replacing the gaskets for all customers."

Bhargava sees no significant financial liability on account of recall.

Below is the edited transcript of RC Bhargava's exclusive interview on CNBC-TV18. Also watch the video.

Q: We understand that you detected this problem in November 2009. Why has this been made public at this point in time?

A: The problem was reported around November. There were three cases from Europe where there was a reported leakage of fuel from the fuel tank. There was one case in India. In Europe, we had the recall announcement much earlier - in November itself. We had started checking the cars in Europe and making sure that this problem would not occur.

In India we wrote to all the customers through the dealers asking them to bring their cars for checking and we have not found any other case except the one which was reported where there was a fuel leak. Nevertheless, what we have been doing is that we have been replacing the gasket just in order to make sure that the problem may not ever arise in the future. We have been doing all this because we feel that as a responsible car manufacturer, we have to make sure that there should not even be a potential problem for the customer.

Q: If I can ask you how is this one lakh split up because this car is exported, is the problem largely in the cars that you have exported to the European markets?

A: The production is more than that. But all the cars which we were made till about August are being checked. The cars after August in any case don't have this problem.

Q: What would you like to tell your consumer who is watching this programme right now who has bought an A-Star that was made prior to August 2009? What would you like to communicate him? What should he do with this car now?

A: We have already written to all those customers to bring their cars for a check so that we can make sure that they will not face a problem. They haven't actually faced a problem because in India we have had only one reported case of a leakage. But despite that we have written to all the customers in India who have bought this car. What I would like to say through your media also is that please bring the car if you haven't done it, our people in the workshops will check it and make sure with the problem, if it could ever occur in the future will not occur.

Q: So there has been no problem for cars manufactured after August 2009 -- is that what you are saying?

A: Yes. August 2009 in any case there is no need to bring them because we are sure that nothing is going to go wrong there. But because it had happened in four cars in upto August - that is about 100,000 cars - we tell that we need to check all the cars because we do not want to take any risk in the matter like this.

Q: This car is also contract manufactured for Nissan and it is sold as the Pixo - is Nissan also recalling this car at this point in time?

A: We have done this for Nissan cars also because we are responsible for the safety of those cars also.

Q: What kind of a financial impact will this have because you are going to be replacing these gaskets for about a lakh units, what kind of financial implications will this have for Maruti?

A: It is not going to be much more financial implication because the gasket is a very cheap component. It is not an expensive component and the cost is going to be shared with the dealer. So as far as the company is concerned, I don't know the exact figure but it cannot be a large cost because it is not a large, mechanical or electrical or electronic component, it is just a gasket.

Q: Is the problem then at the suppliers' end? Have you been able to identify the suppliers? What has become of those suppliers who may have supplied these parts to you?

A: Components, which were supplied, were within the tolerance prescribed for the component but nevertheless if the component was at the lower end of the tolerance, we found that in those cases there could be the possibility of a leak. Although, as I said, it has occurred only in four cases.