The Federal Government has proposed unprecedented action against the automotive industry in Australia, forcing mandatory recalls of cars for the first time.
Deadly Takata airbags that killed a Cabramatta manin July and injured a woman in Alice Springs in April prompted extensions to existing recalls that have been slammed as "overreach" and "outrageous scaremongering" by car industry insiders.
At least 19 people have died and more than 200 have been injured around the globe by faulty airbag inflators supplied to major car companies by Takata. A flaw in its airbag inflator design and construction can cause explosive propellant to rupture in a crash, spraying drivers and passengers with parts that become lethal shrapnel.
Manufacturers including Toyota, Nissan, Honda and Mazda have already recalled almost 2.5 million cars in Australia to replace Takata-supplied airbag inflators used in many popular cars. The ACCC has pushed for a further 877,000 cars previously unaffected by the issue to be forcibly recalled against the recommendations of car makers.
Australian authorities have never forced the car industry to complete safety recalls – past action has been conducted voluntarily by manufacturers.
ACCC chair Rod Sims said the car industry is not doing enough to repair cars fitted with potentially deadly airbags, pushing the consumer watchdog to recommend "unprecedented" action by the Federal Government.
"For us to advise the minister to go down the mandatory recall route, we have to be satisfied that there is more that could be done," Mr Sims said.
"There's no point turning a voluntary recall into a mandatory recall if they actually are doing everything they can... we are concerned that most, indeed nearly all, could do a lot more."
Repair work has been delayed in some cases by difficulty sourcing replacement airbags and a lukewarm response from some customers affected by the issue.
A joint statement released by Paul Fletcher, minister for urban infrastructure and Michael McCormack, minister for small business, said the Federal Government "is taking further action to ensure the safety of Australian consumers and safety on our roads".
Authorities will meet with car companies on October 9 before deciding whether to order mandatory recalls.
Manufacturers will be asked to provide towing services and loan cars for people affected by the issue, and to improve communication with customers and the wider community.
The proposed recall notice features graphic descriptions of Takata airbag victims, claiming that "first responders have thought vehicle occupants had been shot or stabbed due to the shrapnel wounds".
Car companies will be forced to replace airbags affected by the issue by 2021 at the latest. Manufacturers must replace the most dangerous "alpha" airbags must within one business day of being contacted by customers.
The ACCC said around 877,000 cars sold by at least eight car makers including Audi, Ford, Jaguar, Volkswagen, Holden, Porsche, Mercedes-Benz and Tesla have potentially faulty Takata airbags in Australia.
Mr Sims said "motor vehicle manufacturers have a different view and that's why they are not recalling them - we think they should, now".
Those models are fitted with airbags produced by a German factory which has not been linked to fatal failures.
A spokesman for Volkswagen said "we have been advised that our airbags are not among those affected. We are, of course, cooperating with the authorities to the fullest extent".
Mercedes-Benz is "seeking clarification" on the issue.
A senior car company executive told Fairfax Media the ACCC's position represented "scaremongering" and "outrageous overreach".
But Mazda said it "supports a compulsory recall" as "owner safety is a top priority" and Nissan said "we welcome the wider community support to encourage consumers to get their Takata airbag inflators repaired".
Other manufacturers were not available for comment.