The Hindu Business Line : New tracks for safety

Recently a workshop was held in Hyderabad, organised jointly by the Insurance Regulatory & Development Authority and CONCERT. Senior officials from insurance companies attended it, besides two experts from the US. But before we consider why this workshop and its decisions matter, let's take a quick look at the automobile scenario in India.

We in India seem to have gone completely overboard when the manufacture of automobiles was opened up. Our country started with the manufacture of the Maruti in the late 1970s, and the car was available on the road for around Rs 50,000.

Year after year, the price shot up and now in 2003, the lowest-priced Maruti costs over Rs 2 lakh. We now have almost all the world's automobile manufacturers in India either manufacturing vehicles or assembling them.

However, some 30 years ago, we were at the mercy of three of our manufacturers and had to accept whatever quality of vehicles they gave us. Not spoilt by world-class vehicles, the Indian consumers didn't ask too many questions on quality and had to worry only about availability. But coming to the present scenario, when a group of us went to the US to study motor vehicles' safety last June, we were provided with a list of vehicles manufactured in the US with defects that could cause accidents. The list included almost every model, manufactured or imported into the US, and withdrawn due to manufacturing defects. Now, all the manufacturers whose vehicles are made and sold in the US sell those or similar models in India. So what about safety issues here... . isn't the safety of the Indian customer important?

I am not saying all our automobile manufacturers are irresponsible. But some refuse to accept mistakes in the design or manufacture. That is why we need organisations like the NHTSA and IIHS. After our visit to the US, we set about putting together a plan for this purpose. That brings us to the issue of our insurance companies rarely questioning the cause of accidents. No insurance company has made a claim so far (as far as I know) on any automobile manufacturer for defect in the vehicle as the cause of an accident. Accidents are attributed to rash and negligent driving or in rare cases, the failure of the braking system.

Let it be known that the insurance company has the right to make a claim on the garage owner or manufacturer, even after settling the claim by the owner.

If defects that cause accidents can be identified and attributed to either the manufacturer of the vehicle or a mechanic who repairs it, and the insurance companies claim compensation for such defects, the quality of vehicles in India will improve and the quality consciousness of the manufacturer will deepen.

In the end, there will be fewer accidents and less claims on insurance companies. It is against this backdrop that the Hyderabad workshop assumes significance. At the end of it, the IRDA Chairman, Rangachary, announced that the IRDA would set up a Road Safety Institute and a data collection and data research institute under its aegis. He appointed a committee to draw the project report.

This augurs well for the Indian consumer, the insurance industry and automobile manufacturers. We must not forget that the shift in the quality of automobiles in the US and the rest of the world came about after the publication of Ralph Nader's book, Unsafe at any speed. It started a revolution in the consumer movement.

In the end, the manufacturers benefited the most, as customers were willing to pay for quality. This only proves that quality ensures safety, safety ensures good manufacturing practices, and the two together ensure consumer delight.

Response can be sent to life@thehindu.co.in

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