Published on October 12th, 2019 | by Daniel Sherman Fernandez0
How some car brands are forcing owners to bankruptcy!
As nearly new cars sit in service centres waiting to be fixed and resale values drop beyond finance values, this will get worse.
There was a time not so long ago when Malaysian car owners were served with just a 2-year warranty and 1-year service. Today, we have 5-year warranties and up to 3 years’ service. However, breakdowns are increasing and some car warranties have loop-holes in them. Some car manufacturers will offer great discounts at showroom level leaving dealers with below minimum profits and then make back the ‘lost’ profits in after sales when car owners are ‘forced’ to pay for non warrantied parts (better known as consumables) at 250-400% margin mark-ups.
For example, when the car battery has failed after 12-18 months, to keep the warranty alive, the car owner must buy a new battery at 3 times the normal price from the authorized service center. So, a RM380.00 battery is sold for RM1,150.00 at the authorized service center. Same brand, same type, same size battery. Now, if the car owner were to go and purchase and install a new battery outside of the authorized service center, the official car warranty will be deemed void and some car manufacturers will use this to ignore later serious gearbox, engine, safety systems recalls and issues.
There are also complaints of authorized car workshops not servicing cars properly (or not servicing at all) as we uncovered some months ago. We ran an article where a new car owner who went in for his first FREE service did not get a lubricant and oil filter change and was asked to drive away with the old lubricant and oil filter intact. We informed the dealership and action was taken against the service mechanic and the workshop manager. However, we then received dozens of emails from readers experiencing the same deceit and this came from almost half a dozen reputable car brands.
So, what happens to these vehicles months later when the engine oil gets thicker and the filters work partially? New direct injection and turbocharged engines are the first to suffer as they are sensitive to bad maintenance.
Car owners then come in to complain about underperforming engines and service advisors in authorized service centers will fill in lengthy forms claiming new engine parts, or even whole new engines and the car manufacturer ends up replacing a whole engine costing between RM20,000 to RM45,000 on some cars. Owners are left without their cars for weeks or even months waiting for these repairs.
Who losses? The car manufacturers are losing money, brand loyalty and long term repeat customers. The car owners are losing money and patience (this is why service centers now need plenty of food and beverage options to keep car owners happy while waiting and when they need to make numerous repeat visits).
Who gains? Service centers that charge back labour costs to the car manufacturer and of course, spare part manufacturers.
When will this end?