Asbestos-related Auto Recall Widens to More Countries
China - China’s largest car exporter, Chery Automobile Company, Inc., has announced that not only will it be recalling its cars from Australia but also from Brazil, Chile, Argentina, Uruguay, and Singapore, confirming that asbestos-containing parts may exist in the automobiles exported to those particular locations as well.
According to a Bloomberg News article, Chery will be recalling nearly 19,000 vehicles from those five countries. The auto manufacturer, together with Great Wall Motor Company, recently recalled 23,000 vehicles in Australia after they were inspected by customs agents and determined to contain engine and exhaust gaskets that contained asbestos.
A spokesman for the company blames the issue on one of their suppliers, who he refused to name. “The same supplier that provided the parts for the cars made for Australia also mistakenly provided us parts containing asbestos that went into these other cars,” said Huang Huaqiong.
Red flags have been raised about the quality control at Chinese automakers now that parts containing cancer-causing asbestos have shown up in tens of thousands of vehicles. The fact that the cars are being exported to developing countries with emerging markets is of special concern, say asbestos watchdog groups throughout the world, as these countries often do not have stringent asbestos laws in place. China is also expanding their base in developed countries as well, and expects their exports to rise some 50 percent this year, the article notes.
Analysts in China, however, don’t think this latest asbestos faux pas will have much effect on the international market, thanks to the low cost of Chinese-made automobiles.
“The recalls may damp consumer confidence in China-made cars in the short to medium term, but the impact won’t be major,” noted Jeff Chung, an analyst at Daiwa Capital Markets Hong Kong Ltd. “Chinese automakers have been counting on cheap pricing as one of their major edges in overseas markets and the recalls won’t weaken their advantages.”
Most alarming is a statement from Chery, which noted that workers had used the wrong batch of parts in cars bound for Australia, where asbestos is banned because of the high rates of mesothelioma and other asbestos-related diseases there. Chery’s statement makes it clear, however, that the asbestos-containing gaskets were bound for domestic use or may have made their way to other countries where they won’t be turned away.
