Munich Automobile => AD responsibility

[DriveAllDay]

Hi

I don't wish to highjack the existing Munich Automobile thread so am starting a new one.

One of the recurring discussion in the thread centers around what an AD is obliged to do. Many say that since the car is not purchased from AD, there is no reason to service the car.

I respectfully differ on this issue.

Taking on a principle for a brand, and in this case being an authorized dealer comes with a number of responsibilities. They include building the brand in the country, representing the interest of the manufacturer, and most important of all, taking care of the MANUFACTURER'S CUSTOMERS.

Why should a brand / manufacturer accord the status of an AD to a company not willing to undertake these responsibilities? Might as well go straight to independent dealers.

This does not mean that an AD have to lose money over these responsibilities for PI cars:

1. Honouring factory warranty. This is actually a revenue-neutral exercise. Costs incurred for the warranty work are actually charged back to the manufacturer, so the AD doesn't suffer financial loss. One can even say the higher volume of servicing help cover part of the the AD's overhead.

2. Servicing vehicle after warranty. Counter to what many mentioned in the forum, after sales service is VERY PROFITABLE. Many manufacturers make good money from after sales programme -- no reason why AD cannot.

The ONLY reason AD in Singapore ask for adoption fee is to protect their OUTSIZE PROFIT MARGIN.

By OUTSIZE I mean when PROFIT MARGIN is HIGHER than SELLING PRICE of the same car in another country.

E.g. My Boxster's selling price in UK was SGD80K. Stuttgart makes SGD90K in profits for the same car. Where is the logic in that?

Some may argue that cost of operating dealership in Singapore is higher. NOT TRUE. Even if that's so, the reasonable course of action is to lower operating costs, not increase price.

They are allowed to charge this ridiculous margin because of the convoluted tax regime and government's unintended shielding of local dealers from competition. One can even argue that current Singapore car industry practice violates WTO guidelines.

PI, seizing this arbitrage opportunity, flourished.

AD, on seeing too good a protected business coming to and end, introduced the bullying adoption fee regime.

***

So what can you do as consumers and responsible citizens/residents?

1. Beat the system. I self-imported my Boxster from UK, and saved SGD70K.

2. Make the AD honor what they are supposed to do. Because I bought from AD in UK and not PI, Stuttgart honored the factory warranty for two years. Yes, all parts and labour have been free.

3. Get involved. Let you MPs and LTA know that we have a broken vehicle control regime that destroys the environment (every time you re-export a car, or scrap a perfectly good car), destroys competition, and introduces inefficiency (basic Econ 101).

***

I am sure many would disagree on this view, and I respect that. I only ask that your comments be respectful and courteous.

Let the healthy discussion begin

 

[porky88]

Re: Munich Automobile => AD responsibility

I don't believe the problem lies with PML or MA...

IMHO the problem is higher up, BMW and BMW Asia!
They are the manufacturer cum importer...

In the end, the logic is selfish at the vendor side too. BMW Asia will have to be responsible for sales figures in Asia, if everyone PI or self import how are they going to meet quota and earn their pay?

Similarly, a lot of the local marketing, print.. TV.. blah.. blah... are partially funded by local sales partners. If everyone PI, the local agents sure "jia sai"

So I think it is pointless to beat up any of the local authorized agents. The answers should come from BMW and/or BMW Asia. They are at the top of the food chain..

In the end, it's willing seller - willing buyer. Vote with your wallet.

P.S. this has got to be my longest post to date.... hahaha

 

[rex7_vtec]

Re: Munich Automobile => AD responsibility

This is a good thread, shall we sticky it?

 

[pengful]

Re: Munich Automobile => AD responsibility

Just to share. 2 years ago, I had trouble with my E90 320 while in Malaysia. I called up Sapura, one of 2 ADs; the other is Auto Bavaria, and they arranged a recovery truck to pick up my car. I waited about 1.5 hr as my car broke down at Sungei Buloh, about 50+ km from KL and they had to despatch a recovery truck on a Saturday evening. The recovery truck was not a tow truck but those that can winch the car up the low bed mind you.

While at the service centre, the service advisor told me not to worry and that they will take a look at it overnight. He asked me to wait for his call the next day. Just before noon on Sunday, I got the call to go pick up the car in KL. I went and the car was checked out and they fixed something. I paid about RM20+ for some parts and I remember vividly I did not pay for the recovery truck. I was completely, pleasantly shocked.

Will any AD provide this kind of service in SIN? Absolutely not! Sapura had every reason not to help but they did. I completely agree that ADs in SIN are too money-driven and draws the line between "who buys from me and who does not buy from me" too clearly, with no regards to the brand they honor.

 

[Centurion9990]

Re: Munich Automobile => AD responsibility

Just to share. 2 years ago, I had trouble with my E90 320 while in Malaysia. I called up Sapura, one of 2 ADs; the other is Auto Bavaria, and they arranged a recovery truck to pick up my car. I waited about 1.5 hr as my car broke down at Sungei Buloh, about 50+ km from KL and they had to despatch a recovery truck on a Saturday evening. The recovery truck was not a tow truck but those that can winch the car up the low bed mind you.

While at the service centre, the service advisor told me not to worry and that they will take a look at it overnight. He asked me to wait for his call the next day. Just before noon on Sunday, I got the call to go pick up the car in KL. I went and the car was checked out and they fixed something. I paid about RM20+ for some parts and I remember vividly I did not pay for the recovery truck. I was completely, pleasantly shocked.

Will any AD provide this kind of service in SIN? Absolutely not! Sapura had every reason not to help but they did. I completely agree that ADs in SIN are too money-driven and draws the line between "who buys from me and who does not buy from me" too clearly, with no regards to the brand they honor.

Very nice info to share! Malaysia BMW Boleh! That is the spirit Sgp ADs lack off...

 

[titanic]

Re: Munich Automobile => AD responsibility

DriveAllDay, you claimed that Stuttgart made 90K off a Boxster that you paid only 80K for. How do you know that? Where are the facts?

 

[Niva]

Re: Munich Automobile => AD responsibility

I think someone pointed out in previous post about international warranty. Maybe we should establish the scope of this warranty before concluding if AD is unreasonable to charge an adoption fee before even looking at PI cars.

It is certainly interesting to read that other ADs in Malaysia are willingly to honor this while PML/MA seem stubbornly reluctant. I totally agree that it would be unfair to those who bought a car from AD and then find that the relatively lower priced PI cars receive the same amount of warranty coverage. That said, it is also not right for AD to use this as a reason to charge an adoption fee on PI cars if indeed all BMW cars should receive fair service for manufacture defect covered by the international warranty. If this is so, then we have a case against ADs, i.e. unfair charging of adoption fee.

Put it this way, if all BMWs should be covered regardless, then I am sorry to say to ADs, do what the manufacturer is supposed to do. If PIs can charge lower price due to their lower running heads, then u can to relook into your biz models...end of the day is about free market play. If you are not cost efficient, then you should be relook at your biz model.

And if no one is able to clarify this warranty or left unchecked, then no point so many ding dong. Like someone said in earlier post, buy with your wallet. willing buyer who knows PI car will hv to pay adoption fee and similarly higher premium for those from AD to enjoy warranty.

Im sure some brother here must be a lawyer who can better advise.

 

[DriveAllDay]

Re: Munich Automobile => AD responsibility

DriveAllDay, you claimed that Stuttgart made 90K off a Boxster that you paid only 80K for. How do you know that? Where are the facts?

I know it because

1. I self-imported the Boxster into Singapore, so I know what i am paying. The OMV was 80K. Add to it the duties and COEs and expenses I have the fully loaded price bringing the car into Singapore.
2. The selling price of cars from Stuttgart, until recently, is completely transparent. You can spec the car online, and the final selling price will be shown. From one motoring you can find the equivalent OMV, duties, COEs, and registration fees. The difference between the two is the gross margin = 90K.

THESE are the facts.

Now, I would appreciate a little more tact and courtesy in your questioning...

 

[satines]

Re: Munich Automobile => AD responsibility

Hi

The ONLY reason AD in Singapore ask for adoption fee is to protect their OUTSIZE PROFIT MARGIN.

By OUTSIZE I mean when PROFIT MARGIN is HIGHER than SELLING PRICE of the same car in another country.


Let the healthy discussion begin

Fully agreed. Hence also the reason they choose to give up earning money from post-sales services of non AD cars, which indeed are profitable, but the crazy margin from selling the car is even more attractive.

 

[titanic]

Re: Munich Automobile => AD responsibility

DriveAllDay, with due respect, you do not know what Stuttgart's final selling price is. It is something between Stuttgart and the buyer. So you are making assumptions, not pure facts. Get this straight.

 

[DriveAllDay]

Re: Munich Automobile => AD responsibility

DriveAllDay, with due respect, you do not know what Stuttgart's final selling price is. It is something between Stuttgart and the buyer. So you are making assumptions, not pure facts. Get this straight.

Yes I do. I have a quote from them before I went the self-import route.

The published price and final price were indeed the same at the time of my purchase. Stuttgart found it too transparent, and subsequently remove prices from their website a few months ago. Go check Porsche websites around the world -- Singapore is the one of the very few countries without prices. They used to have the prices, but no longer.

Perhaps it is you who have to prove your skepticism and facts, and explain your challenging and unfriendly tone.

 

[pongster]

Re: Munich Automobile => AD responsibility

DriveAllDay, with due respect, you do not know what Stuttgart's final selling price is. It is something between Stuttgart and the buyer. So you are making assumptions, not pure facts. Get this straight.

Titanic, thought this thread is for healthy communication... R u from a rep from AD?? can see that u r only retorting what DriveAllDay wrote...

If u have any facts, then u shd juz dish it out n put it into a debate...

So can we know what do you know about AD? please share

 

[twotencents]

Re: Munich Automobile => AD responsibility

I am of the view that authorized distributors represent the manufacturer and should be responsible for warranties promised by the manufacturer. Unless it is clearly stated that the warranty is only for the territory where the product is sold.

Take for example cameras. If you purchase a DSLR body from Japan, it clearly states that the warranty is for Japan only, the same goes for some cameras purchased from USA.

However this should not stop an authorized distributor or service center from servicing my camera if problems should arise. They should just charge whatever is the prevailing rate for such service and not tag any loading etc.

I think servicing does contribute a large portion to ADs bottom line and it seems a poor business decision to turn away customers no matter where they bought the car from.

 

[Rocky99]

Re: Munich Automobile => AD responsibility

U can take the info here as a rough guide.

http://www.onemotoring.com.sg/publish/onemotoring/en/lta_information_guidelines/buy_a_new_vehicle/car_cost.MainPar.0047.File.tmp/Car_Cost_Update.pdf

We can all learn from one another.

 

[Rocky99]

Re: Munich Automobile => AD responsibility

Of course, if price not there, just go for a test drive.

 

[ClemZ]

Re: Munich Automobile => AD responsibility

It is interesting to note that BMW North America has issued a recall and also a 10yr warrenty on HPFP failures while BMW Canada, Germany and even Singapore has not done so. Hence i guess the respective Master Franchises have the so called right to run their business models as they see fit, or subject to the governing laws of the countries they operate in. I guess BMW NA is faced with a tough Lemon Law hence they have no choice but to offer such a service.

maybe for a start, we should start to lobby LTA/Govt for a tougher Lemon Law to protect consumers, irregardless of PI or AD.

 

[satinGHOST|r!der]

Re: Munich Automobile => AD responsibility

While I can understand that AD have higher overheads and costs, I feel that when you look at the price they are asking is just ridiculous.Even in times like this where the COE price is exorbitantly crazy, the only things most ADs are doing is increasing the price lumpum (Mind you much higher than the increase of COE prices from month-month). I just find it stupid given that they are not able to adapt to challenging times and take a cut from their already fat profit margin in order to sustain sales.

Also, blame our Singapore market being too small for anything to be done about it. In other countries, customers are way more price sensitive dollar-dollar and as such all they need to do is drive to another dealer for a better price. Even if they do buy the car from another dealer, they can send the car to any dealers they want and warranty will still be recognised. And mind you this is just for a few couple of thousands; no where near what we can save (In the tens of thousands) by going for Parallel Imports. In this context, I feel that warranty should be recognised. The topic of adoption fee in my opinion is inevitable. However, at the price, it's just ridiculous.

Most sophisticated sports cars for example are all streamlined into standard production routines which means whatever cars Europe or American markets get, they are the same as Singapore. Example, ALL M3s AFAIK, comes only from Regensburg plants in Germany. It is what UK and even US gets, with LHD and RHD being the only exception plus minor cosmetic changes. So it comes from the same factory. So why should it not be warrantied? I feel that perhaps AD's could ask customers to pay for the price of the repair + parts FIRST and send in a report to Factory. Once approved, the customer can get his/her money back. But paying a FAT adoption fee to address small issues worth peanuts is just plain stupid. Somehow it feels like there is animosity within the same brand which IMHO is just ridicluous.

Moreover, some of the ADs in Singapore are just collecting FAT premiums like PML and they dont bother to increase the servicing capacity and quality. Most of us here know how PML is and would prefer to have the savings and go out to more competent workshops where most have very good experiece with. ESPECIALLY at this time.

At this time seeing how the COE is, I think AD's have to do something than thinking that just because they are the sole dealer (Being Singapore having 1 AD for each BRAND) they can market the price at whatever price and get away with it. There is a huge increase in people going through Parallel Imports because of the wide spread in pricing between the exact same cars. Infact, PI cars some slightly higher optioned for much less for some makes/models. Not to mention the concept of PI cars over the last few years have sat well with alot of consumers who are increasingly more comfortable sending their cars outside with the level of competency and knowledge of such workshops. Of course, there are PIs with bad reputation too. It is necessary to find out the reliable ones and undertake a study of who are the good ones in the market as well.

And most of the representative offices here like BMW Asia or Daimler do not really give a damn about the Singapore market because they govern other bigger markets like Hong Kong, China, Malaysia etc where they REALLY sell cars. Complacent? You bet.

 

[Racebred]

Re: Munich Automobile => AD responsibility

As I read this thread, I try to put myself in the shoes of an AD. These are perhaps the points of consideration they are thinking about.

Profit margin. It is natural for ADs in Singapore to have really fat profit margins, due to COE. Because the number of cars per year everyone can sell is limited by law, if they earn the same few thousand $ profits that other countries' AD earns, then they will be out of business very soon, and we will have no more ADs. If you work backwards from how much you would like to earn as an AD to be a lucrative enough business, then divide by the cars you are able to sell, then the profit margin will make sense.

Other overheads like advertising, manufacturer requirements (like a swanky showroom of a certain standard, certain service standards, additional requirements like launches, driver training, etc, all should take up a huge chunk of money. These are the overheads that PIs dont incur. If I may just digress a bit, I feel that PI's profit margins are relatively more disgusting. Because now many of them price it one quantum below AD, as opposed to pricing it as a cost-up approach, simply because they can. (instead of pricing it 'cost price + $10k' they price it 'AD price - $20k'.)

Why adoption fee then? The cleaner approach would have been to price each PI's servicing cost higher. (or from a neater approach, taking a leaf out of petrol companies, they could have a normal list price for all cars including PI, and then have a discounted price for AD cars) This would price in the natural bias they have against PI cars. However if you take the example to the extreme, then the biz model will fail to work. Imagine a future where 100% of all cars sold is by PI, and the AD sells 0. Even if they service all the PI cars at a premium, they still cannot make enough to sustain their costs. So to prevent that scenario from happening, they use a deterrent approach via adoption fee. It's in every businessman's blood to come out with meausres to protect your business. The above refers to service.

When it comes to warrenty claims, however, then that's where the international warrenty issue comes in. I believe as a PI customer you can still expect the AD to honour the brand's responsibilities. It's only fair from a macro point of view, since the costs are recouped. The only factor to consider is usage of resources that could otherwise be applied to your own AD customers in times of scarcity. You can also expect a Lexus RX300 customer to be infuriated with Lexus if all their hoists are fully booked for 2 months at a stretch by 200 Harriers. They would write in to complain to Lexus for sure. However I feel it's wrong to turn a PI customer away for warrenty claims. What they can do is to place you on lower priority, so that you wait longer for your slot, and then wait longer to collect car, and perhaps have a pay first claim back later scheme.

Next question is, are PI and AD products the same, since they come from the same factory? Well, the product cannot be supervised by the AD, or come under the responsibility of the AD in terms of transport, storage, handling, PDI,etc then if a fault does happen arising from the ill-handling of the above, then as an AD you will surely be unhappy if you were to clear up other people's mistakes.

So with the above examples, and perhaps more, this naturally make the AD unwilling to take on PI cases. If it turned out to be a lemon, as it is a probable thing to happen, they might feel, well if i sold the car, I gam wan. If other people sold the car but i clear shit, i would feel indignant about it.

I dont take a stand, on who's right or wrong, but since this thread has raised some pointers from the angle of PI's rights, I thought it interesting to provide some counter viewpoints for discussion. What do you guys think?

 

[Mockngbrd]

Re: Munich Automobile => AD responsibility

Very thoughtful for a Monday morning

 

[kenntona]

Re: Munich Automobile => AD responsibility

My 335 coupe was PI and I have dealt with minor warranties with the workshop covering my PI. They, in turn, dealt against PML on those issues. Would I go to PML for servicing or warranty claims? Nah. Why should I when I could solve it against the workshop covering my PI?

I have already expressed my thoughts in the other Munich thread, not gonna elaborate further. Simple logic here:

(1) AD car => back to AD for warranty/maintenance within warranty period. Maintenance is subjective after warranty period...

(2) PI / Used Import car = >back to PI workshops => PI workshops to handle warranty/maintenance issues against AD within the warranty period.

Rest of the issues like margins.... quite irrelevant. The buyers are free to choose who and where they will buy from, with margins estimated from selling price and OMV declaration. That's the reason why PIs exist. One needs not buy from AD if fat margins are deemed obscene.