Car dealers to remove warranty restrictions to allow independent workshops to compete

Posted on December 11, 2017.

SINGAPORE: Major car dealers have agreed to remove restrictions on warranties and related documents, announced the Competition Commission of Singapore (CCS) on Monday (Dec 11).

The commission said this in a press release after concluding its inquiry into the supply of car parts in Singapore.

In its findings, CCS said it was concerned about dealers requiring customers to service or repair their vehicles exclusively at the respective dealers’ authorised workshops, to ensure that the warranty remains valid.

“To address this, CCS has raised its concerns with the major car dealers and have worked with them to remove the warranty restrictions from their car warranties and related documents,” the commission said in the press release.

All major car dealers have agreed to make the relevant changes to the warranty terms by CCS, it said.

All agreed changes to the warranty terms for existing warranties and new warranties will be implemented by Dec 31.

CCS said such restrictions had deterred car owners from using independent workshops and thus the ability to compete effectively with authorised workshops.

The restrictions also allowed dealers to void warranties if the car had been service or repaired previously at an independent workshop.

CCS added that with the changes, car dealers are allowed to void warranties or reject claims only if the damage to be claimed under the warranty was in fact caused by the independent workshops.

The inquiry was carried out to better understand how the operations of the car parts market and the effects of market features of competition.

Another finding by CCS was that importation and wholesale distribution of car parts are generally competitive. Car parts can be obtained from a large number of suppliers located in Singapore and overseas, the commission said.

While there is limited supply for parts which are replaced infrequently or that belong to niche models, CCS said this is due to the small number of buyers and sellers in the market.

CCS also found that technical information, equipment and diagnostic tools are generally available. This is despite car manufacturers and their authorised car dealers not supplying such inputs to independent workshops.

“This is because independent workshops are generally able to gain access to viable alternatives such as those supplied by third-party equipment suppliers,” said CCS.



Source :  CNA/ad &