Have you ever felt that you’ve been exploited as a car buyer? Some of us have been exploited so many times that we don’t let the small things get to us. But at times, it can be soul destroying.

One case involved a senior citizen who bought a new German car to experience hybrid technology. When he sent the car for the scheduled service under warranty, the technician discovered that the insulation of the wiring to the wiper had been gnawed through.

The technician said the entire wiring loom would cost RM27,000 to replace. “Repair by electrical tape” was not an option because he said this would void the warranty of the car.

Upon checking, the franchise holder of the car brand said such a situation was not probable. If the warranty had been voided, it would be the warranty of the wire loom itself and not that of the whole car. If the uncle hadn’t sold the car out of protest, we might have got some justice.

Consumer rights in Malaysia are much trampled upon because market distortions are the norm rather than the exception.

Under-the-table money

For instance, remember when we had to pay under-the-table money to cut the queue to buy a Proton car when it was launched in the late 1980s? Customers would talk about the quantum of the bribe rather than protest on principle.

Our automotive market is distorted by monopolies such as mandatory vehicle inspections where Puspakom’s market dominance is such that many vehicle owners prefer to get runners to do the job and grease palms to avoid harassment and delay.

So when Malaysia followed Europe and the US in the affirmation of consumer rights with the passing of the Competition Commission Act of 2010 and the establishment of the Malaysia Competition Commission (MyCC) in 2012, domestic trade associations were caught by surprise.

Lorry owners and school bus operators associations which implemented standardised rates were warned that they were abusing their dominant position. In fact, they were only trying to prevent undercutting and this was evident because members of the Pan-Malaysia Lorry Owners’ Association never managed to reach their ceiling rates in the pre-MyCC days.

Ban on monthly sales figures

The Malaysian Automotive Association (MAA) was also warned to desist from presenting granular data about monthly sales figures and top-selling models which was one of the reasons for its existence.

MyCC’s decision is contrary to international practice. In Australia for instance, automotive sales data and top-selling models are compiled by the Federal Chamber of Automotive Industries (FCAI) and issued monthly to the public.

Yes, we want our rights to be protected as a consumer, but we also want the relevant rights to be protected and we want a good balance so that the franchise holders who are delinquent are penalised while those who perform on their promise to car buyers are not made to suffer the sins of the unethical.

On this note, I attended the MyCC webinar on motor vehicle warranties and recommendations drafted by international survey group Ipsos Sdn Bhd.

With a few errors like listing VW as an assembler of commercial vehicles in Malaysia, it was a good initiative to encourage more competition and provide more choices to car buyers.

Warranties and repairs

But I thought the draft paper could have been more precise when discussing crash repairs without differentiating between cars under warranty and comprehensive insurance and old cars with third-party insurance, and servicing of cars under manufacturer warranties.

Secondly, the draft recommends that new car owners should be thoroughly briefed on their rights in the context of warranties. While this is a good statement, it’s also wishful thinking because most Malaysian car owners can’t even be bothered to read their owner’s manual, what more the actual warranty.

Premium car brands have even invested in special air-conditioned halls to entice customers to attend the hand-over briefing. Many just let the salesman tell them where and how to start the car, where’s the brake and how to adjust the mirrors.

About warranties implied and expressed, it’s true that most Malaysian motorists don’t understand that warranty extensions are underwritten by insurers. That caused a lot of tension in the past when insurers refused to entertain warranty claims on technical grounds that the car owner had not complied with the maintenance schedule, even if the owner had exceeded the interval by a few kilometres.

But this extended warranty is a non-issue today because cars are now sold with three to five years of manufacturer’s warranty and there’s no more space for warranty extensions. So we should just spend less time on this in the draft paper.

Unbundled warranties

The draft recommended that franchise holders unbundle the price of the car from the price of the warranty so that the buyer could choose the warranty package, from no warranty to five years, unlimited mileage. That’s a good suggestion but the consumer should beware. The government could waive excise duty on a car, but not on the engine parts.

BMW Malaysia unbundled warranties last Christmas and offered buyers a choice between three years limited mileage and five years unlimited mileage. What happened was that almost all buyers went for the five years unlimited mileage package where all consumables are labour costs borne by the manufacturer.

Ipsos’ recommendation that owners of new cars be given a choice to send their vehicles for scheduled maintenance to independent workshops without voiding the manufacturer’s warranty would be the most ambitious, if not the most controversial.

There are about 50,000 independent car workshops in Malaysia versus an estimated 500 car dealer workshops as stated by the Consumers Association of Penang.

Workshops and a question of trust

But why would the owner of a new car choose to go to an independent workshop if the car comes with a comprehensive warranty including free replacement of engine fluids and filters at the authorised service dealer?

This brings up the issue of trust, whether the owner of the car under warranty can trust the independent workshop not to upsell and recommend changes of parts which are not yet due for change. It’s easy to frighten a car owner who is not a mechanic.

One of my cars is a continental make which requires a certain brand and specification of a synthetic lubricant, and coolant (not to be diluted). I would choose to go to an authorised service dealer where all the required engine fluids are available and the technicians know exactly where things are and what to do, in a clean, organised and safe workshop environment.

On the other hand, I would go to an independent specialist workshop if the service dealer’s prices are illogically expensive. There is at least one premium brand like this in Malaysia and a pro-choice ruling by MyCC would be welcomed by owners of this premium brand.

On the whole, we must applaud MyCC for its endeavour to be inclusive and organising a series of webinars for stakeholders – the government, automotive industry, and members of the public.

Read the recommendation about the Lemon Law. Our wish is that more people can give their inputs to the draft report to prevent illogical conclusions such as warning off MAA from its previous public duty of publishing granular motor sales data.

TOP 10 AUSTRALIAN CARS IN APRIL 2021

VFACTS data sourced from the FCAI, compiled by William Davis and Alex Misoyannis.

The views expressed are those of the writer and do not necessarily reflect those of FMT.