Cars safe, Toyota Vietnam insists as legal eagles circle

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Lawyers and consumer advocates say that Toyota customers may have a case


Innova cars of two different taxi companies drive on streets in Ho Chi Minh City. Toyota Vietnam has admitted that around 8,830 Innova model cars suffered from technical flaws.

Legal professionals in Vietnam say that Toyota Vietnam could face lawsuits or worse for failing to take immediate action on thousands of flawed cars floating around on the domestic market.

The carmaker admitted, on April 1, that around 8,830 Innova model cars suffered from technical flaws, but declined to issue a recall.

Two days later, the Vietnam Standard and Consumers Association condemned the practice of allowing poor-quality products to enter the market.

Nguyen Manh Hung, general secretary of the association, told Thanh Nien that the quality of cars is of paramount importance due to the fact that it is so closely tied to consumer safety.

Toyota is the largest carmaker in Vietnam. It sold 2,223 units in February. Innova, in particular, is a popular model in the country, used widely by many taxi companies.

"As a result, any product that fails to meet safety standards must be pulled from the market," Hung said. He noted that, while the authorities are reviewing the case, Toyota customers can lodge any and all complaints with his association, which has branches all over the country.

Officials from Toyota Vietnam, including production manager Tadashi Yoshida, admitted that there were problems with the brake systems, camber bolts and seats.

Some 200 cars, they said, may have been released to the market with braking systems that are more responsive than usual.

However, the company insisted that the technical flaws would not affect driver safety. Its officials also said they had not received any complaints from their customers.

Public outrage

The company's decision to wait and see has angered many consumers. Many readers called and wrote to Thanh Nien, during the past week, accusing the company of not respecting Vietnamese consumers.

Engineer Le Van Tach, who helped expose the issue, said he was not happy with the way the company has responded to the flaws. While the engineer, who is still employed by Toyota Vietnam, praised his managers for finally acknowledging the flaws, he was "disappointed" because information was still withheld.

Tach alleged that the real number of flawed Vietnamese-manufactured Toyotas on the market was probably closer to 60,000.

Because all vehicles were made on the same production line, he claimed that it would not be possible for just a handful of vehicles to suffer from a given manufacturing flaw. Instead, he claimed, the problems applied uniformly to a pair of Toyota models.

In documents submitted to the Vietnam Register, a quality control agency, he pointed out three major problems with the manufacturing process for both the Innova and Fortuner models.

Tach said he has been telling company managers about the flaws for years, but no one heeded his concerns. He alleged that the cars suffer from balance issues since their bolts are not tightened in accordance with directives issued by the Japanese parent company. He also pointed out that the brake systems and seats do not meet Toyota safety standards, either.

Legal standpoint

Legal professionals now argue that local consumers have the right to demand refunds from the carmaker. Others claimed that Toyota Vietnam had broken the law and needs to announce plans for free repairs or a factory recall.

One Ho Chi Minh City judge argued that, given the circumstances, lawsuits could be filed against the company.

"The Law on Quality of Products and Goods stipulates that manufacturers are obliged to refund or exchange defective products returned by buyers," he said.

Attorney Nguyen Thanh Luong said that cars have been identified under Vietnamese law as a "source of danger." As a result, any safety claims against cars would need to be examined closely.

In the meantime, since Toyota Vietnam has publicly acknowledged the flaws in their products, it is legally required to fix them, Luong said. He added that the company has violated a clause in the Law on Quality of Products and Goods which prohibits withholding information on product quality and safety.

Another lawyer, Ly Ngoc Hai, said the company may have violated the Penal Code by knowingly putting unsafe vehicles into use.

If concerns about the safety flaws were, indeed, raised with managers at Toyota Vietnam starting in 2006 and they refused to take action their release could be interpreted as a deliberate criminal act, he said.

Do Huu Duc, deputy general director of the Vietnam Register, said the case needs to be approached "cautiously, thoroughly and objectively" to ensure that consumer rights are protected.

He added that Vietnam may lack regulations that deal, specifically, with vehicle flaws, which could make it hard to address the case.

 "However, based on  international conventions, automotive manufacturers have a responsibility to issue a recall when flaws in their products could affect the safety of consumers," he said. "At the same time, they have to report the process to the authorities for approval."

Watching the watcher

The Vietnam Register, which is responsible for the technical supervision of vehicle manufacturers, has been criticized by local media for rubber-stamping substandard vehicles.

Duc responded by saying that errors regularly occur during mass production.

He said manufacturers of automobiles and motorbikes (or of any other products, for that matter) are required to submit a model which all mass produced copies will be based on.

Duc confirmed that Toyota Vietnam's auto assembly line was inspected in accordance with the nation's standards and no problems were found.

"When a new car line is launched, thousands of units will come out of a given factory," Duc said. "We can't run a full check on each and every one of them. If the manufacturer makes products that are not exactly the same as the approved model, they must take responsibility. The question is: how they apologize and solve the problem?"

Toyota Vietnam has promised to take responsibility if and when there is an accident and the cause is identified as one of the three technical flaws.

Bach Van Mung, director of the Competition Administration Department of the Industry and Trade Ministry, said the agency, which mainly deals with antitrust cases, will examine the situation.

"The Vietnam Register will be responsible for technical assessment while we will consider all (other) factors that could negatively affect Vietnamese consumers," Mung said.

The Competition Administration Department reserves the right to order a recall if a product is found to have a negative impact on the health and safety of consumers, he said.

"In this case, we want to review everything carefully so that we don't violate the rights of consumers or businesses," Mung said.

If necessary, the department will seek assistance from the Ministry of Public Security when inspecting the cars, he said.

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