Car refunds and loan vehicles drafted in government's compulsory Takata recall

Eight car makers still haven't started recalling cars.

Refunds, quicker repairs, a tow and loan cars will have to be provided by car manufacturers to the drivers affected by the Takata airbag recall based on a draft compulsory recall notice released by the federal government.

The proposal to make the recall mandatory comes as eight car makers – in addition to the 14 already implicated – failed to voluntarily recall more than 800,000 cars that are also fitted with the potentially fatal airbags.

Yesterday afternoon Michael McCormack, the Federal Minister of Small Business, put into motion the steps needed to introduce a compulsory recall of Takata airbags, a product safety scandal that has grown to affect 2.49 million cars in Australia since 2009.

"Today the Australian government is taking further action to ensure the safety of Australian consumers and safety on our roads," says Minister McCormack, though the proposal remains a draft and could still be dismissed.

The right to a tow, a loan car or a refund

The actions proposed in the draft recall notice, if they were to come into effect, would see the time people have to wait for a replacement airbag slashed, arrangements made for a tow, the issuing of loan vehicles and car refunds being offered based on the current market value.

The fault with Takata airbags, which have killed 19 people globally and injured 207 people in the US alone, develops over time. A customer's right to a loan car, tow or refund would depend on the type of airbag and its age.

The most dangerous variant of the airbag, "alpha" inflators, will have to be replaced within one day of a customer contacting a car maker for a repair. A tow truck will have to be dispatched to take the car to the dealership, or a qualified technician will have to replace the airbag on site. And if it takes more than 24 hours for these airbags to be replaced, an acceptable loan car will have to be provided. Otherwise, the customer will be entitled to a refund.

Alpha airbags sustained a number of defects when they were being manufactured and are between 11 and 18 years old. These airbags were found to be responsible for eight-out-of-the-ten fatalities caused by Takata airbags in the US, as of June 2017. "The risk [of a misfire] is immediate," the draft mandatory notice warns. And the failure rate of these airbags –
found in cars offered by Honda, Toyota, Lexus, BMW, Nissan and Mazda – is as high as 50%.

There's 877,000 cars fitted with Takata airbags that have not yet been voluntarily recalled by eight other car makers

But alpha inflators only account for 50,134 of the remaining 1.5 million cars recalled that have not yet been repaired. Whether the remaining "beta" airbags will be repaired within a month depends if they are more than five years old.

Testing has found Takata airbags turn dangerous at the earliest when they are six years old. Airbags that are five or older will have to be fixed within one month after a driver contacts their car maker. If the actual repair takes more than a day, or the car maker can't schedule the repair within one month, they will then have to provide a loan car or offer to reimburse travel costs, and if they cannot provide either, give those customers who ask a refund of their car.

All other Takata airbags will have to be repaired before they turn six years old or before 31 December 2020 – whichever comes first. Car makers have until the date set in the draft recall notices issued to customers to sort out the repairs. 

The case for a mandatory (compulsory) recall

Six months was the common wait time for customers to have their cars fixed under the recall, but CHOICE has come across dozens of cases where people were waiting a year or even two. Car makers were (and still are) swapping defective Takata airbags with identical replacements, as CHOICE revealed in its investigation, and they were not telling customers these dangerous substitutes will also need to be recalled. The recall notices issued to customers were often jargon-laden and tended to understate the risks of injury or death; some didn't disclose the fatal risks altogether. The NSW man who was killed by a Takata airbag in July did not answer any of the five recall notices mailed to him by Honda.

"The suppliers of the recalled vehicles with Takata airbag inflators...have not taken satisfactory action to prevent these goods causing injury...despite the lengthy period which voluntary recalls have been in place," the draft mandatory notice says.

It fired with such force that a piece of metal 5cm long was found on the roof of a nearby building

There are 2.49 million cars from 14 manufacturers affected by the recall of Takata airbags, as of August 2017. Honda, which started the recall in 2009 and is the car brand with the highest Takata fatality rate, has the highest completion rate at 78.3%. But the industry's recall efforts as a whole have lingered, with an average completion rate of 38.5%. The major car maker with the lowest repair rate has only fixed 17% of its affected cars.

And this does not include the 877,000 cars fitted with Takata airbags that have not yet been voluntarily recalled by eight other car makers. Ford, Audi, Jaguar, Volkswagen, GM Holden, Porsche, Mercedes Benz and Tesla have cars sold in Australia fitted with these airbags, but have not launched recall campaigns because these airbags were manufactured in Germany. This is despite six of these airbags rupturing from August 2016 to May 2017, in countries that include Italy, Spain, Portugal and Turkey.

The affected car models offered by the eight car makers are not yet known, CHOICE understands, as information on the recall is still being compiled by government authorities.

More airbag misfires, more deaths and more serious injuries

The number of people killed and injured by Takata airbags has continued to rise. There have been 19 documented deaths globally and 207 injuries in the US alone. "Many of the incidents involving a fatality have occurred at a low speed," the report says, "and due to the nature of the injuries, first responders have thought vehicle occupants had been shot or stabbed due to the shrapnel wounds". 

Australia is one of three countries where a Takata airbag misfire caused a fatality, after the United States and Malaysia. The tally of victims is likely to be under-reported because first responders and investigators might not trace the injuries and fatalities back to the airbag in a serious crash. The serious injuries so far linked to the airbag scandal include the loss of eyesight, facial injuries, lacerations to the face, neck and body, severed vocal cords, spinal damage and head injuries that include brain damage.

A third (and previously unreported) airbag rupture happened in Australia in the year before the first local injury and death. In September 2016, an airbag from a BMW was being safely disposed of when it misfired. It fired with such force that a piece of metal 5cm long was found on the roof of a nearby building. Fortunately, no one was hurt –
or worse.

Any of these recommendations – made by the dedicated ACCC task force – could be ditched. Sign our petition to let the government know you support this recall.

Car makers will have to locate and destroy Takata airbags that have been removed from cars to be sold both at wreckers and online. A database tracking the airbags will have to be established, and car makers will have to put into place processes to sort out disputes with unhappy customers. Template communication drafted by the government will have to be used by car makers – and they won't be allowed to soften the language.

The draft notice doesn't guarantee a mandatory recall and any of these recommendations – made by the dedicated ACCC task force – could be ditched. Car makers and other stakeholders have 10 days to write to the ACCC in an effort to hold a conference on the proposals. Then, in the "coming months", a final recommendation will be made by the competition watchdog to Federal Minister McCormack, where it will be determined if a mandatory recall will take effect.


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