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Mercedes-Benz's action to hurt grey importers

Jul 19. 2012
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By Kingsley Wijayasinha

The Na

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In its latest attempt to drive out grey importers from the competition, distributor Mercedes-Benz (Thailand) is ending service and warranty work for independently imported Mercedes-Benz vehicles, from 2013.

The disclosure yesterday comes one day prior to the opening of the Bangkok Used Car and Imported Car Show at Muang Thong Thani. Many grey importers are taking part in the event, which is expected to witness chunky grey Mercedes-Benz sales.

According to a leading grey importer taking part in the show, Mercedes-Benz cars sold by grey importers each year are as much as those sold by authorised dealers.

"This policy would make it difficult for small grey importers or those that are not legitimate, and they could be forced out of business next year," he said.

Last year Mercedes-Benz Thailand introduced a non-refundable adoption fee of Bt150,000-Bt500,000 depending on the model, for servicing and repairing grey imports produced after January 1, 2011.

The new policy will be effective for cars assembled, starting last month.

Many Mercedes-Benzes are sold through grey importers every year, and many of them come in for servicing and repair at authorised Mercedes dealerships as many smaller grey importers have no service facilities.

Mercedes-Benz used to accept grey imports for servicing and repair. However, it has decided to call it quits for new and upcoming models due to the "new technologies that require extensive training of the service of the authorised dealers and a direct access to know-how and certified machinery by the Daimler Group".

It also cited the consistent updating of product information that is "generally not available for parallel imported [grey market] vehicles".

However, a Mercedes-Benz expert, who requested anonymity, told The Nation that although Mercedes-Benz has a global warranty policy, almost all of the grey Mercedes come from the UK.

"European-spec vehicles run on Euro 5 fuel, which means that when you fill them with lower-quality fuels there’s a good chance the engine will malfunction. However, due to the high-quality nature of these vehicles, the problem usually shows up after the third or fourth year of use," he said.

"This is not good for the Mercedes-Benz image as it may lead to people thinking that the vehicles have problems, similar to recalls," he said.

But he also stressed that Mercedes-Benz cars can be serviced and repaired by any garage with the right product information and servicing equipment.

The European Union’s Motor Vehicle Block Exemption Regulation (BER) allows vehicle owners the freedom of having their servicing and repairs done at their chosen workshop, which may not belong to the manufacturer or the dealer, without losing the warranty, he said.

"The servicing and repair information must also be released by the manufacturer six months after the launch, so technically anyone can service the cars without losing the warranty," he said.

BER was introduced in 1995 and then updated at the end of 2002. One specific requirement of the regulations was that technical data and repair instructions should be made available to the independent motor trade, at a reasonable charge, so that car owners were not obliged to take their car to a franchised dealer for service or repair.

However, the parent company can legitimately refuse to honour warranties in Thailand for many grey imports as the cars were not serviced according to Mercedes-Benz global standards, the source said.

"I believe it is a safer investment in the long term to purchase the cars from authorised dealers and servicing the cars with them," he said.

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