Months after General Motors India recalled of 114,000 Chevrolet Tavera SUVs, a government-appointed panel probing the situation has found that the automaker committed “corporate fraud” in violating the country’s vehicle emissions standards, according to a government official who has seen the report. The panel has reportedly found that GM carried out said fraud with “full knowledge and complicity” of top-level management who were employed by the automaker between 2005 and 2013. The committee also found that GM should be assessed strong punitive measures.
The recall in question stemmed from a trick employed by GM India to meet emissions regulations in the popular Tavera model, which traces its roots to an aging Isuzu model known as the AUV, HiLander or Crosswind, depending on the market of sale. In July of 2013, GM recalled 114,000 Taveras manufactured between 2005 and 2013 for a failure to meet emissions regulations — marking one of the biggest recalls in India’s automotive industry. At the same time, The General also stopped production of the vehicle.
The recall was the result of a surprise check by the Automotive Research Association of India, an industry group that works with India’s Ministry of Transportation, that discovered that diesel engines included in production-spec Taveras were not the same as those that GM sent for testing. Prior to the recall, GM India admitted in a letter to the Indian government that an internal investigation has found that the automaker violated testing regulations when employees intentionally used compliant/approved engines in purpose-built Taveras sent for conformity testing to the government. Following government approval, GM included non-compliant engines in production-spec Taveras.
The official said that the report found that GM was at fault, rather than the lab that conducted lab tests.
“The report has pointed out that it is in the nature of corporate fraud. It says only the [automaker] was responsible for whatever happened,” and that GM’s Indian arm could be fined as much as 100 million rupees ($1.6 million) under current regulations.
In a statement, GM India said that company policies were violated and that it had identified those responsible.
“We determined there was an emissions problem,” said GM India in a statement. “We investigated it and identified violations of company policy. We held people accountable. And, we advised Indian authorities. Beyond that, we’re not able to comment as we’ve not heard from the government or seen the report.”
GM fired at least two executives following the recall, including GM global chief of engine development Sam Winegarden and GM India financial officer Anil Mehrotra.
The GM Authority Take
Things aren’t looking good for The General in this situation… not good at all.
What bewilders us about this situation is that GM had the financial means as well as the engines to build compliant Taveras from the get-go, but — for whatever reason — elected not to. At this point, it will likely be more costly for GM to conduct this recall and pay whatever fines it ends up being assessed by the Indian government, while doing its best to sell cars with a damaged public image in one of the world’s burgeoning nations, than if it were to build the Taveras in question with emissions-compliant engines in the first place. Oh the dangers of sightedness.