A Pilot on Safe Service Certification Takes Off

As a responsible Corporate Citizen, FADA has been working towards introduction of periodic Inspection & Certification (I&C) programme for all categories of vehicles to clean environment and road safety. In spite of a huge population of two-wheelers and passenger vehicles, which is growing steadily at double-digit and highest road fatalities in the world, India does not have I&C regime for non-transport vehicles, unlike other countries. For example, UK has over 19,600 MOT Centres - commercial garages accredited by a specialized agency of the Department of Transport, namely, Vehicle & Operator Services Agency (VOSA) - to carry out periodic inspection & certification of private vehicles.

 
FADA has submitted a number of representations and held meetings with the Ministry of Road Transport & Highways to press for incorporation of a provision in the Motor Vehicles Act for an I&C regime covering all categories of vehicles. While the Government also seems to be equally concerned over the dangers posed by the ill-maintained, unsafe and polluting private vehicles plying on the roads, it has not been able to come up with the amendments in the Motor Vehicles Act to put in place the I&C programme in India, due to a variety of reasons such as lack of resources & infrastructure and sheer enormity of the task, which an effective I&C programme would entail to cover the entire country and all categories of vehicles. The Government appears to be treading cautiously on the issue especially as the existing fitness certification regime for commercial vehicles has not been effective.

 
After a series of meetings, it was felt that amendments to the Motor Vehicles Act are likely to take time considering the cautious approach and constraints of the Government. FADA, therefore, initiated a proposal for introducing a voluntary I&C programme for personal vehicles, jointly with Society of Indian Automobile Manufacturers (SIAM) and insurance companies. It is heartening to note that the proposal was well-received by SIAM and by some of the insurance companies. Thanks to the support and keen interest shown by Dr Pawan Goenka, President, SIAM, a proposal was drawn up to make the programme workable. It was felt that the vehicle owners must see some value and should not be burdened with additional cost, if the voluntary programme has to succeed.

In this context, the following decisions were taken:

-	Manufacturers, dealers and insurance companies will work together to make the programme a reality.
-	Certification will be voluntary and will cover both passenger vehicles and two-wheelers. The customers wanting these computerised checks to be carried out for Safe Certificate will have to pay, say, Rs. 500 in case of passenger vehicles and Rs. 200 in case of two wheelers as service charge.
-	Insurance companies will give a rebate, say, Rs. 500 in renewal premium in case of passenger vehicles and Rs. 200 in case of two wheelers issued with 'SAFE SERVICE CERTIFICATE' by a Safe Service Centre.
-	Dealers wanting to set up these SAFE SERVICE CERTIFICATION Centres will be investing Rs. 15 lakh each initially on equipment as a part of their contribution towards clean environment and road safety.

 
 
The programme is a win-win for all stakeholders-vehicle owners, manufacturers, dealers and insurance companies. The initiative will lead to better fuel efficiency, cleaner environment and safer roads without motorists having to spend extra money, as the incentive in insurance premium would offset the cost of inspection & certification. Manufacturers and dealers will gain by way of increased repair and service activity, apart from discharging their corporate social responsibility. Similarly, the programme will give a marketing edge to the participating insurance companies, as they would be able to improve their profitability through increased business and lower motor insurance claims resulting from the reduction in the number of accidents. The vehicle owners will feel assured while driving their vehicles and will get a better resale value through this certification.

The proposal got a boost especially when two insurance companies, namely, Bajaj Allianz and ICICI Lombard agreed to give a rebate of Rs. 500 at the time of motor insurance renewal to the car owners, who are issued with a 'SAFE SERVICECERTIFICATE'. FADA is pursuing with IRDA and other individual general insurance companies for a similar rebate by them as well.

FADA is happy to announce that a pilot on voluntary SIAM-FADA SAFE SERVICE CERTIFICATION programme at select authorised automobile dealerships was formally launched by Dr Pawan Goenka at the SAFE Annual Convention 2010 held in Chandigarh on 5th May 2010.

 
Dr Goenka released the samples of the 'SAFE SERVICE CERTIFICATE' and 'SAFE SERVICE' stickers. Also present at the launch were: S P Shah, President, FADA; R R Jowel, Transport Commissioner, Government of Haryana; S V Suderson, Treasurer, SAFE; Harjeet Singh, President, SAFE; Dan Greenbaum, President, Health Effect Institute, USA; S K Panigrahi, Joint Transport Commissioner, Government of Orissa; Hemantha Kumara, Joint Transport Commissioner, Government of Karnataka and Dilip Chenoy, Director General, SIAM.

To begin with, the pilot covers 19 (up from 16 centres announced at SAFE Convention) automobile dealerships across the country, which have initially agreed to set up SAFE SERVICE Centres at their workshops and is intended for passenger cars only. Passenger cars that are +3-year old will be checked for brake, suspension, emissions, tyre depth and headlamp. The SAFE Certificate will be issued if a car, on inspection, attains the thresholds prescribed for various checks. The SAFE Certificate will hold good for one year or 25,000 kms, whichever is earlier. All the checks will be computerised except for headlamp and tyre depth. The number of such SAFE SERVICE Centres will gradually be increased and two-wheelers will also be brought within the ambit of this programme as it progresses and more insurance companies join this initiative.

 
FADA would welcome and like a large number of automobile dealers to participate in this programme. Not only is the programme a service to the society, but also makes a business sense for the automobile dealers.

Note: Eligibility Criteria and Application Form for automobile dealers wanting to set up SAFE SERVICE CENTRES at their workshops, as also an indicative Revenue & Profitability Model of SAFE SERVICE CENTRE, are published in the succeeding pages.

 
Meeting with J D Power Asia Pacific

A 2-member team comprising Mohit Arora, Executive Director and Shantanu Nandi Majumdar, Account Manager from J D Power Asia Pacific visited FADA office on 7th May 2010 to discuss the contours of a syndicated study they intend to conduct on Dealership Satisfaction and to seek FADAs support and association in the task. Nikunj Sanghi - Vice President led the discussion on behalf of FADA at this meeting.

The study proposes to evaluate the OEMs on various parameters on a scale of 1-10. It proposes to cover 30 dealers per make and would be across 20 cities in India. FADA suggested that more tier-2 cities should be included, as findings bringing out regional and locational differences will be more useful. The study is expected to be out in July 2010.

J D Power proposes to collect data by way of online submission of the information, mailers and face-to-face interaction with the dealers. The main challenge for such a study is to capture Dealer s voice comprehensively and correctly, which can happen if the sample size is adequate and an overwhelming number of dealers participate giving true picture of the situation at the ground level. FADA urges its members to participate in the study and give their frank opinion when J D Power team approaches them, in order to make the report meaningful & beneficial for all concerned including manufacturers and dealers.