What is an Automobile Manufacturing Defect?

Vehicle Defect refers to when the automobile does not meet the safety standards or has defects that may interfere with safe driving and such.
Vehicle Defect is directly related to automobile safety and the following effects that have minimal effect on safety are excluded from Vehicle Defect correction (Recall).

• Passenger convenience devices such as air conditioner, radio, etc.
• Wear of components that require regular inspection, maintenance, and exchange such as shock absorber, battery, brake pad, etc.
• Simple rust on chassis panel
• Paint status or scuff on chassis ornament

Motor Vehicle Recall

Motor Vehicle Management Act Article 31 Paragraph 1 states, 『Where any motor vehicles or motor vehicle parts manufactured by a motor vehicle manufacturer, etc. or a motor vehicle parts manufacturer, etc. have such defects as failing to meet the safety standards for motor vehicles or safety standards for parts, or as hampering safe operations, the motor vehicle manufacturer, etc. or part manufacturer, etc. shall, from the date of acknowledging the facts, disclose such defect by mail, text message using a mobile phone, etc. without delay, as prescribed by Ordinance of the Ministry of Land, Infrastructure and Transport, so that the motor vehicle owners can be clearly aware of the facts and plans for corrective measures accordingly, and shall take corrective measure』. The Minister of Land, Infrastructure, and Transport may issue recall order when automobile manufacturer/assembler/importer does not disclose the defect or take corrective action for automobile with manufacturing defect and may also conduct an investigation (manufacturing defect investigation) through performance test agency when necessary to confirm the defect in automobile manufactured (Motor Vehicle Management Act Article 31 Paragraph 3) as Korea Automobile Testing & Research Institute of Korea Transportation Safety Authority practically conducts investigations as performance test agency.

Voluntary Recall and Mandatory Recall

Recall is divided into voluntary recall by the manufacturer and mandatory recall. Voluntary recall by the manufacturer makes up most of the recalls rather than mandatory recalls enforced by the government. Voluntary recall also includes influenced recall by the manufacturer during investigation when the government conducts Vehicle Defect Investigation. In the case of US where recall system is actively operational, about 75% of recalls consist of voluntary recalls and others are recalls due to impact of government investigation with voluntary recall by the manufacturers being generalized.

Difference Between Recall and Product Liability

• Recall system

  Recall is divided into voluntary recall by the manufacturer and mandatory recall. Voluntary recall by the manufacturer makes up most of the recalls rather than mandatory recalls enforced by the government. Voluntary recall also includes influenced recall by the manufacturer during investigation when the government conducts Vehicle Defect Investigation. In the case of US where recall system is actively operational, about 75% of recalls consist of voluntary recalls and others are recalls due to impact of government investigation with voluntary recall by the manufacturers being generalized.

• Product liability

  Product liability(PL) is a damage compensation liability system where the manufacturer(Business that manufactures/processes/imports the product) compensate the damages for those inflicted damage in terms of life, body, or property due to product defect. In other words, recall and PL systems both protect against consumer damage related to safety and protect consumer rights but consumer damage compensation system and PL system are systems that compensate after the fact with direct compensation by the manufacturer for consumer damage that has already occurred while recall system is a more active consumer protection system for advanced prevention of consumer damage by taking voluntary or government-enforced mandatory corrective action for defective products.

Motor Vehicle and Motor Vehicle Parts Safety Defect Investigation

The Minister of Land, Infrastructure, and Transport may issue recall order when automobile manufacturer/assembler/importer does not disclose the defect or take corrective action for automobile with manufacturing defect according to the Automobile Management Act Article 31 Paragraph 3.

Recall System Sequence

Collect Information Vehicle Defect

Motor Vehicle Recall Center (www.car.go.kr) reviews frequency and consistency for the same issue during certain period of time by collecting information on automobile manufacturing defect through consumer complaints and civil complaints and this refers to a phase of analyzing the possibility of potential manufacturing defect. (Enforcement Regulation of Automobile Management Act Article 44)

Automobile Safety and Defect Deliberative Committee

It is a committee consisting of experts from government, academia, relevant institutions and organizations for conducting tasks such as automobile exchange, refund mediation and for review on matters related to recall, etc. (Automobile Management Act Article 47-8)

Self-Certification Compliance Test

It is a survey to confirm whether the automobile manufacturer/assembler/importer has sold the automobile according to the Motor Vehicle Management Act for automobiles self-certified and sold with the government using direct budget to purchase automobile types on sale. The Minister of Land, Infrastructure, and Transport establishes and enforces annual plan based on results of defect information collection/analysis, previous enforcement results, number of automobiles sold, trends, etc. for efficient execution of the survey. (Enforcement Regulation of Automobile Management Act Article 40)

Vehicle Defect Investigation

Vehicle Defect Investigation is a system to confirm safety related defect that may impede safe operation of automobile such as malfunction outside of intended design and functional parameter of automobile. Korea Automobile Testing & Research Institute of Korea Transportation Safety Authority executes the task as performance test agency.

Hearing

This is an action to provide an opportunity for the manufacturer to suggest its opinion and explanation regarding investigation results prior to recall order and its procedure adheres to the Administrative Procedures Act.

Decision on Vehicle Defect

This refers to the procedure for final decision regarding manufacturer, vehicle name, vehicle type, production period, number of recalls, defect details for automobile with manufacturing defect determined by the Minister of Land, Infrastructure, and Transport based on opinion of manufacturer through the hearing and results of consulting with Automobile Safety and Defect Deliberative Committee and recall order is also notified to the manufacturer simultaneously.

Recall Order

This refers to the procedure where the Minister of Land, Infrastructure, and Transport orders recall for automobile with manufacturing defect to the manufacturer based on results of manufacturing defect decision and the manufacturer is obligated to take corrective action according to the Motor Vehicle Management Act.

Decision on Voluntary Recall by Manufacturer

This refers to decision on public voluntary recall by the manufacturer when the manufacturer determines the possibility of Vehicle defect (Does not meet safety standards or safety defect) by reviewing and analyzing the warranty repair history and collecting information internally. Recall plan has to be established within 30 days of decision date and owners have to be notified with a report being submitted to the Minister of Land, Infrastructure, and Transport 5 days prior to newspaper announcement. Most of annual recall cases are actions based on voluntary recall decision by the manufacturers. (Internal manufacturer campaign for repair and exchange that are not public do not apply for this type of recall.)

Report on Recall

This refers to the procedure where the recall plan has to be established within 30 days of voluntary Vehicle defect decision by the manufacturer or recall order date and owners have to be notified with a report being submitted to the Minister of Land, Infrastructure, and Transport 5 days prior to newspaper announcement. Also, the manufacturer must report to the Minister of Land, Infrastructure, and Transport within 20 days of quarter’s end for every quarter on recall progression until corrective action is complete. (Enforcement Regulation of Automobile Management Act Article 43)

Recall Announcement

Manufacturer (Details of manufacturing defect/Impact on automobile, manufacturing defect correction period (At least 1 year 6 months), location and assigned department, details claiming liability for correction expenses for manufacturing defect by manufacturer when manufacturing defect is not being corrected/Details on compensation plan and such when manufacturing defect cannot be corrected at fault of manufacturer) shall deliver notice on manufacturing defect correction plan to owners in mail within 30 days of internal decision on manufacturing defect or date of recall order and make a public announcement on at least 1 daily newspaper that is distributed nationwide with the main office at Seoul. (Enforcement Regulation of Automobile Management Act Article 41)