GM 'guilty' of fraud, faces penalty for Tavera recall

Moushumi Das Gupta, Hindustan Times
New Delhi
First Published: 01:01 IST(22/10/2013)
Last Updated: 10:55 IST(22/10/2013)
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Automobile giant General Motors (GM) committed a “corporate fraud” to make vehicles that violated emission norms and eventually forced the recall of 1.14 lakh Chevrolet Taveras – a popular multi-utility vehicle – in India in July, a governmentappointed panel probing the issue has said in a report.

The “fraud” was carried out with “full knowledge and complicity” of some of its top management, who were there between 2005-2012, the report said as it recommended strong punitive measures against the Detroit-based company.

In July, GM India announced a recall of over 1.14 lakh Chevrolet Taveras — one of the largest vehicle recalls in India till date — manufactured between 2005 and 2013 for failing to meet emission norms.

Before announcing the recall, GM India had admitted in a letter to the government that its internal probe has found that company employees refitted noncompliant engines with those that were already approved and sent them for testing.

The company subsequently sacked several executives including its chief financial officer Anil Mehrotra.

Separately, the government had ordered a three-member panel headed by Nitin Gokarn, CEO, National Automotive Testing and R&D Infrastructure Project (NATRIP) to investigate and fix “culpability.”

The Gokarn-panel, however, left it to the road transport ministry to fix the quantum of the penalty.

P Balendran, vice president (corporate affairs), GM India told HT, “We will not be able to comment as we have not seen the report and also not heard from the government.”

The panel has also recommended a host of measures to make testing of vehicles more stringent and scientific.

This includes mandatory testing of vehicles to check conformity of production (CoP) at the production stage itself.

This will ensure t hat vehicles are compliant with type approval parameters from the start. Presently CoP is done only annually.

The probe panel, however, did not find any role of either government officials or Automotive Research Association of India, the testing agency, in perpetrating the violation.

Apart from CoP test done at producer’s end, the committee has recommended that it should also be done at the dealer end as well. If the vehicle fails compliance norms, type approval should be withdrawn.

“All vehicles related details (like chassis number, details of engine) should have to be logged by the manufacturer at production stage into Vahan –the online national register of vehicles across India started by the road transport ministry,” said an official.

Also annual production plan of model due for CoP should be submitted to test agency a month before the testing is to be done.


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