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Scrapping of car repair restrictions comes into effect
The Competition Commission said yesterday it has accepted commitments made by the city's seven car distributors to scrap the warranty restrictions after the watchdog pointed out possible contravention of competition law.
Warranty restrictions had required car owners to repair their vehicles only at authorized repair centers.
The watchdog said the commitments came into effect yesterday and will remain in force for five years.
The seven car distributors are Cartel Motors, Dah Chong Hong Holdings, Inchcape International Holdings, Kam Lung Motor Group, Motor Image (HK), Sime Darby Motor Group (HK and Vang Iek Holdings.
The distributors also offered to make corresponding amendments to their warranty documentation and to communicate with existing customers on the changes within 90 days.
The removal of warranty restrictions will cover 17 car brands: Audi, BMW, Citroen, Ford, Honda, Jaguar, KIA, Land Rover, Lexus, Mazda, Mini, Mitsubishi, Nissan, Subaru, Suzuki, Toyota and Volkswagen.
The results came after the commission launched an investigation in March that revealed the seven distributors had imposed warranty restrictions requiring maintenance and repair services to be carried out at authorized repair centers, regardless of whether the maintenance or repair item was covered by the warranty.
As a result of the conditions, car owners who visited independent car repair shops during the warranty period risked having their warranty voided.
The commission said these restrictions might deter passenger car owners from using independent car repair workshops during the warranty period, which could in turn limit the ability of such workshops to compete with authorized repair centers.
"This might also reduce car owners' choice of service and ultimately lead to higher prices for maintenance and repair services," the watchdog said.
A two-week public consultation began on August 1 on the commitments offered by the car distributors and the commission decided to accept the commitments.
"We consider accepting commitments to be an appropriate enforcement outcome for the case, as it offers an effective, speedy and proportionate resolution addressing the commission's concerns in a targeted manner," said the commission's chief executive, Rasul Butt.
However, the commission added that it can withdraw its acceptance of commitments in certain cases, including where there has been a material change of circumstances or the person giving the committee has failed to comply with it.
It also reminded existing and potential car owners to check their warranty policy to understand the scope of the coverage and any exclusions before sending their cars for maintenance.
The watchdog said the commitments came into effect yesterday and will remain in force for five years.
The seven car distributors are Cartel Motors, Dah Chong Hong Holdings, Inchcape International Holdings, Kam Lung Motor Group, Motor Image (HK), Sime Darby Motor Group (HK and Vang Iek Holdings.
The distributors also offered to make corresponding amendments to their warranty documentation and to communicate with existing customers on the changes within 90 days.
The removal of warranty restrictions will cover 17 car brands: Audi, BMW, Citroen, Ford, Honda, Jaguar, KIA, Land Rover, Lexus, Mazda, Mini, Mitsubishi, Nissan, Subaru, Suzuki, Toyota and Volkswagen.
The results came after the commission launched an investigation in March that revealed the seven distributors had imposed warranty restrictions requiring maintenance and repair services to be carried out at authorized repair centers, regardless of whether the maintenance or repair item was covered by the warranty.
As a result of the conditions, car owners who visited independent car repair shops during the warranty period risked having their warranty voided.
The commission said these restrictions might deter passenger car owners from using independent car repair workshops during the warranty period, which could in turn limit the ability of such workshops to compete with authorized repair centers.
"This might also reduce car owners' choice of service and ultimately lead to higher prices for maintenance and repair services," the watchdog said.
A two-week public consultation began on August 1 on the commitments offered by the car distributors and the commission decided to accept the commitments.
"We consider accepting commitments to be an appropriate enforcement outcome for the case, as it offers an effective, speedy and proportionate resolution addressing the commission's concerns in a targeted manner," said the commission's chief executive, Rasul Butt.
However, the commission added that it can withdraw its acceptance of commitments in certain cases, including where there has been a material change of circumstances or the person giving the committee has failed to comply with it.
It also reminded existing and potential car owners to check their warranty policy to understand the scope of the coverage and any exclusions before sending their cars for maintenance.
