Chery SA: 24,000-Unit Vehicle Safety Recall Prompts NCC Probe

• Chery South Africa has initiated a recall of nearly 24,000 vehicles from the past three years due to potential rear-axle, welding, and brake defects.
• The National Consumer Commission (NCC) is investigating Chery regarding these safety concerns.
• Separately, the NCC is probing allegations that Chery conducted recalls without properly informing the commission.
• This South African recall follows similar actions by Chery in China and Malaysia earlier this year, involving tens of thousands of vehicles.
• Chinese carmakers, including Chery, have significantly increased their market share in South Africa, with Chery ranking third in passenger vehicle sales in October.

The National Consumer Commission has also launched a distinct, ongoing inquiry into Chery, specifically addressing allegations that the company proceeded with certain vehicle recalls without formally notifying the regulatory body.

Chinese automotive manufacturer Chery South Africa has commenced a significant vehicle safety recall, impacting nearly 24,000 units that were either produced or made available for purchase within the last three years. This action aims to address various potential safety issues identified in the affected vehicles, prompting a broader investigation by the nation's consumer protection authority.

The identified potential defects span several critical components, including irregularities in the rear axle, various welding flaws, and problems with the braking system. These concerns have led to the widespread recall, which is intended to ensure the safety and reliability of Chery vehicles on South African roads. The National Consumer Commission (NCC) has confirmed its involvement, stating it has launched an inquiry into the company's practices.

Beyond the immediate safety concerns, the National Consumer Commission has also launched a distinct, ongoing inquiry into Chery, specifically addressing allegations that the company proceeded with certain vehicle recalls without formally notifying the regulatory body. This separate investigation, initiated last month, highlights the critical importance of adhering to Chery recall notification requirements and underscores the potential legal and compliance ramifications for automotive manufacturers operating in South Africa.

This National Consumer Commission Chery investigation focuses on whether the company bypassed established protocols for informing the NCC about safety-related actions. Such a failure to comply with regulatory notification procedures could expose the manufacturer to further scrutiny and potential penalties, emphasizing the strict product liability South Africa automotive sector participants face. Tony Liu, the chief executive officer of Chery South Africa, did not provide an immediate response to requests for comment regarding these developments.

The South African recall of Chery vehicles is not an isolated incident, as the company has undertaken similar actions in other international markets this year, including China and Malaysia. Earlier in the current month, Chery submitted a proposal in China for the recall of approximately 54,000 vehicles, following a separate recall of 9,000 units in October within the same market.

These South Africa automotive recalls occur amidst a period of significant growth for Chinese carmakers in the region. These manufacturers now account for more than one-fifth of all passenger vehicles sold in South Africa, a substantial increase from less than five percent just five years prior. Chery, in particular, has experienced a rapid expansion of its market share, achieving the third-highest ranking in passenger-vehicle sales in October, encompassing its Jetour, Omoda, and Jaecoo brands.

The current situation involving Chery underscores the broader implications for consumer protection vehicle defects SA and the necessity for robust compliance frameworks within the automotive industry. The NCC's dual investigations serve as a reminder to all manufacturers of their obligations to not only address product safety issues but also to transparently communicate these actions with regulatory bodies.

Adherence to established recall protocols is paramount for maintaining consumer trust and ensuring public safety. The ongoing scrutiny highlights that regulatory bodies are vigilant in enforcing these standards, making it imperative for legal and compliance teams to prioritize strict adherence to all notification requirements to avoid further regulatory challenges and potential impacts on brand reputation.

The National Consumer Commission's investigation into Chery for failing to inform them about a recall highlights the critical importance for legal and compliance teams in the automotive and consumer goods sectors to adhere strictly to regulatory notification procedures for product safety recalls in South Africa. Failure to do so can lead to further regulatory scrutiny and potential penalties beyond the recall itself.

Source: Original reporting via Bloomberg