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Car owners can soon use independent workshops without voiding warranties

SINGAPORE — The stranglehold on the lucrative repairs and servicing business wielded by car dealers here has been scrapped by the competition watchdog, which is making them honour warranties without tying buyers down to authorised workshops.

Car owners can soon use independent workshops without voiding warranties

The stranglehold on the lucrative repairs and servicing business wielded by car dealers here has been scrapped by the competition watchdog, which are making them honour warranties without tying buyers down to authorised workshops. TODAY file photo

SINGAPORE — The stranglehold on the lucrative repairs and servicing business wielded by car dealers here has been scrapped by the competition watchdog, which is making them honour warranties without tying buyers down to authorised workshops.

Car owners now face having their warranties voided by sending their vehicles to independent workshops or paying two to three times more at authorised workshops. At its intervention, all major dealers accounting for nine out of 10 cars on the roads here have agreed to remove this condition, which crimps independent workshops’ ability to compete effectively, said the Competition Commission of Singapore (CCS) on Monday (Dec 11).

By Dec 31 this year, the dealers will revise existing warranties in force, as well as new warranties, so owners can freely choose the workshop to visit, the CCS added.

The dealers that have agreed to do so are Alpine Motors (Chevrolet), Borneo Motors (Toyota, Lexus and Suzuki), Cycle & Carriage Industries (Citroen, KIA, Mercedes Benz and Mitsubishi), Eurokars Group of Companies (Porsche, Mazda and MINI), Kah Motor Co (Honda), Komoco Motors (Hyundai), Motor Image Enterprises (Subaru), Performance Motors (BMW), and Tan Chong Motor Sales (Nissan).

Volkswagen Group and Premium Automobiles, which deals with Audi cars, was the only major dealer here that placed no such restriction in their warranties.

The CCS rooted out the anti-competitive practice as part of its inquiry into the supply of car parts here.

Information provided by the major car dealers showed that the proportion of customers that send their cars for maintenance and servicing at authorised workshops hovers around 90 per cent during the period of warranty. But only 40 per cent, at most, continue to do so once the warranty ends.

Car owners have been held to ransom because dealers imposed a condition that warranties can be voided “if the car has been serviced or repaired at an independent workshop”. With the change, these car dealers may void car warranties or reject claims only if they manage to establish that the damage or defect to be claimed under the warranty is in fact caused by the independent workshops.

CCS chief executive Toh Han Li said the removal of the warranty restrictions will facilitate “a more competitive market for car repairs and servicing”, which could in turn bring “more choices for car owners, and opportunities for existing and new independent workshops”.

The CCS, however, said it “did not have concerns” with car dealers recommending the use of their authorised workshops or promoting the merits of using them, which may cover technical expertise and use of original equipment parts.

Car dealers would only be crossing the line if they “cast negative aspersions” on the capability and integrity of independent workshops beyond advising car owners that they will have to bear the cost of any defect, damage or malfunction to the car that is caused by servicing and repairs by third parties.

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