Australian government orders 2.7m vehicle Takata airbag recall, NZ MIA asks for help

By Graeme Roberts | 1 March 2018

Compulsory recall in Australia is unprecedented; New Zealand new vehicle importers have asked for government help

Compulsory recall in Australia is unprecedented; New Zealand new vehicle importers have asked for government help

Australia's assistant minister to the treasurer, Michael Sukkar, has issued a compulsory recall for all 2.7m vehicles on the country's roads with defective Takata airbags, following an Australian Competition and Consumer Commission (ACCC) safety investigation.

"Tragically there has been one death and one case of serious injury in Australia as a result of the deployment of these air bags and the government just doesn't want to see any more," Sukkar told reporters.

Sukkar reportedly said the problem was considered acute in northern Australia due to its humid and hot climate. Such conditions are a known factor in the airbag's dangers and the deaths have occurred mainly in the summer in the southern United States and in tropical Malaysia.

ACCC said the minister decided to issue the compulsory recall because, based on extensive evidence provided by the ACCC, it appeared to him that a reasonably foreseeable use of vehicles with defective Takata airbags may cause injury to drivers and/or passengers, and one or more suppliers of vehicles with defective Takata airbags have not taken satisfactory action to prevent those vehicles causing injury to drivers and/or passengers.

ACC said there had been 23 reported deaths and 230 injuries worldwide with the one death and one serious injury reported in Australia. Approximately two in seven vehicles in the country are affected.

The compulsory recall applies to all vehicles that are subject to existing Takata voluntary recalls, plus approximately 1.3m additional vehicles that have not been voluntarily recalled.

The compulsory recall requires suppliers of vehicles with defective Takata airbags to replace all in Australian vehicles by 31 December 2020 (or later in some instances if approved by the ACCC). Some vehicles will be recalled immediately, and others on a rolling basis, scheduled based on various factors including relative safety risk. This means that not all vehicles will be recalled straight away.

Takata airbag design defect

Certain types of airbags made by Takata Corporation use a chemical called phase-stabilised ammonium nitrate (PSAN) as a propellant. The ACCC's investigation concluded that Takata PSAN airbags without a desiccant (or drying agent) or with a calcium sulphate desiccant have a design defect. Due to the defect, as the airbag ages and is exposed to high temperatures and humidity, the PSAN propellant is exposed to moisture and degrades. If this happens, when the airbag is triggered and deploys (in a collision), it may deploy with too much explosive force, rupturing the airbag inflator housing so that sharp metal fragments shoot out and hit vehicle occupants, potentially injuring or killing them.

Alpha airbags

A subset of Takata airbags called 'alpha' are considered to pose the highest safety risk of all the recalled airbags. Currently, around 89,000 alpha airbags have been replaced and there are still around 25,000 yet to be replaced.

A number of vehicle suppliers in Australia have voluntarily recalled approximately 2.7 million vehicles containing defective Takata airbags since 2009. The voluntary recalls sought to replace affected airbags in recalled vehicles.

As at January 2018, the overall replacement rate for all voluntary recalls was only approximately 63% of the total number of affected vehicles under voluntary recall in Australia.

Replacement rates for individual suppliers conducting voluntary recalls varied significantly, ranging from between 36% to over 84%. Four suppliers had replacement rates of less than 50% of vehicles subject to their voluntary recalls.

Prior to the compulsory recall, however, not all vehicles with defective Takata airbags were recalled. Approximately 860,000 vehicles in Australia with defective Takata airbags were not under voluntary recall.

New Zealand

Meanwhile, in neighbouring New Zealand, the local Motor Industry Association (MIA) has called on the government to assist with the recall due to the high number of parallel imported used and new cars.

At the end of February 2018, around 320,000 new and used vehicles in New Zealand had been affected by the Takata recall process and owners of approximately two thirds had received letters (recall notices) and around 134,000 owners had taken vehicles in for the recall to be completed.

MIA CEO David Crawford said: "This is large and complex logistical issue affecting new and used vehicles with two different types of Takata airbags and current owners of vehicles having a choice as to whether they want to close out the recall. At present there is no mandatory process requiring owners of vehicles to undertake a recall if they are notified by the manufacturer to do so." 

MIA said the issue was exacerbated by importers of used vehicles who do not properly check, as required under the Fair Trading Act, that vehicles they are importing have had recalls closed out in the country they are sourcing their vehicles from. Mostly these vehicles are proceeding through import compliance without checking and then on-sold to unsuspecting New Zealand consumers. It is then left up to official NZ distributors to try and identify these vehicles and endeavour to manage a recall, which under NZ legislation they are not obliged to undertake (under the NZ consumer legislation the person importing a good, including vehicles, is considered the manufacturer of that good for recall purposes).

"The MIA is not opposing imports of used vehicles, but these vehicles should not be on-sold to consumers with outstanding (open) recalls," it said. 

The MIA has asked the government to find a mechanism which requires owners of affected vehicles to bring their vehicles into a franchised dealer for the recalled component to be replaced if they do not respond to letters from manufacturers within a reasonable time period, and prevent used imported vehicles from completing import compliance unless those importing vehicles can demonstrate those vehicles have had their recalls completed.