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Old 30th July 2015, 11:50   #16
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Default Re: CCI fines Hyundai Rs 420 crore; Reva, Premier also face flak

Quote:
Originally Posted by maheshramaling View Post
1. But - here, I am not able to buy it from elsewhere. I am particularly talking about Mitsubishi/ HM & Skoda (to an extent) and might be the case of other manufacturers.

2. I am looking for abdul garage simply because of the restrictive trade practices by these manufacturers/ dealers and that's what i condemn. Greed for making money in short term using such malpractices - is the source for issue - not just in automobile industry but across the board.

3. If the dealers/ manufacturer had a fair trade practice of making the part available in all places at a reasonable profile margin - it's a win-win for everyone.
I have a few exception with what you have written:
1. So how does this ruling help you? As I have already written, Hyundai is not there for charity so they will recover the revenue lost and the fine from you only somehow later.

2. But you missed the entire point about price of spare + price of service from Abdul Garage turning out to be more expensive tomorrow, than the today's scenario of price of spare + price of service from Hyundai
(http://www.team-bhp.com/forum/indian...ml#post3765179 (CCI fines Hyundai Rs 420 crore; Reva, Premier also face flak))

3. Aha, so I was right, the public indeed does prefer moving towards Marxism. So what is your definition of reasonable profit margin?
100%? 50%? 20%? 5%?

Quote:
Originally Posted by Thebat View Post
Instead of calling the public as idiots at large I feel its a step taken in the right direction to give people more autonomy towards deciding where they want their cars to be serviced with person care rather than dealing with unresponsive aftermarket service personnel.
Yes, you are absolutely right if this is what you want.
But rest assured this scenario will not become cheaper than the scene today.

The problems is that while I am not against CCI's action, what I am appalled with is misunderstanding that people have with regards to prices.

Quote:
Originally Posted by catchjyoti View Post
But here in India Hyundai is not satisfied earning out of me during the purchase itself but wants to keep me as a captive during my entire ownership period. This is simply not done!!!
All businesses in this industry (and many others) operate on Razor-Razor blade model.
Which means the upfront sales of Razor (or car) is competitive and thus offered at lowest possible price perhaps at zero profit to create an "installed base".

The blades (or spares) are not under competitive scenario*, since you will anyhow turn to Hyundai only to buy the spares. Therefore the price of spares is usually 2-5 times what you expect (to make up for the lost profits).

You have a problem with that?
Simple solution: Next time when you buy a car, please ask a detailed price list of spares, and try to work out the total cost of ownership rather than only the upfront Onroad price. And make comparisons and decisions based on those.


* actually as long as local spares or unbranded spares are available, you have some kind of competition, but you as a buyer is so averse to buying the unbranded spares, that it creates a virtual monopoly

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Originally Posted by i74js View Post
Many of the members have speculated that the companies can jack-up prices, which may or may not happen as the companies are also operating under stiff competition.
Are you sure that they are operating under competitive scenario ONCE you have bought their products?

Last edited by alpha1 : 30th July 2015 at 12:01.
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Old 30th July 2015, 12:28   #17
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Default Re: CCI fines Hyundai Rs 420 crore; Reva, Premier also face flak

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Originally Posted by alpha1 View Post
I Are you sure that they are operating under competitive scenario ONCE you have bought their products?
You will have to interpret it holistically. There are several companies (say Skoda) famous for overcharging customers on spares and after sales service, have witnessed downward movement in sales and it is evident to everyone now.

Even companies understand that now with liquidity in the market, a single customer buys multiple cars and their single sale is not end to it; retaining existing customer is always easier rather than bringing a new customer onboard (you can seek views of any management expert here).

To me, all serious players confirm that they operate under stiff competition at every stage be it pre-sales or post-sales. and that is what we see once the a new launch stabilizes. Ecosport is now available with a discount (corporate discount + small dealer discount and basic kit); the same ford started offering part replacement (components of gear box instead of full gearbox) for Figo and Fiesta to bring down their repair costs.

Cheers

Last edited by i74js : 30th July 2015 at 12:30.
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Old 30th July 2015, 12:45   #18
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Default Re: CCI fines Hyundai Rs 420 crore; Reva, Premier also face flak

It is quite possible that competitors might be lobbying CCI to get such a fine imposed.
However, this is still step in the right direction. If a company can sell spares across the counter in one country, then it should be able to do the same in other countries as well.
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Old 30th July 2015, 13:29   #19
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Default Re: CCI fines Hyundai Rs 420 crore; Reva, Premier also face flak

I was thinking Hyundai was already selling the parts over the counter. Aren't they? Wonder how CCI came to the particular fine amount - imagine number of Hyundai's to be sold to generate that much revenue, leave aside profit. Can companies absorb that kind of dent in such a fiercely competitive market?

Also depends on what they really end up paying - it could be a long way before they end up paying something if not 420 crore.

On a lighter note the fine amount sounds just apt for the alleged deed.
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Old 30th July 2015, 19:17   #20
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Default Re: CCI fines Hyundai Rs 420 crore; Reva, Premier also face flak

Quote:
Originally Posted by alpha1 View Post
I have a few exception with what you have written:
1. So how does this ruling help you? As I have already written, Hyundai is not there for charity so they will recover the revenue lost and the fine from you only somehow later.

2. But you missed the entire point about price of spare + price of service from Abdul Garage turning out to be more expensive tomorrow, than the today's scenario of price of spare + price of service from Hyundai
(http://www.team-bhp.com/forum/indian...ml#post3765179 (CCI fines Hyundai Rs 420 crore; Reva, Premier also face flak))

3. Aha, so I was right, the public indeed does prefer moving towards Marxism. So what is your definition of reasonable profit margin?
100%? 50%? 20%? 5%?
I am not sure if this is marxist or leftist or rightist! My point is - I am unable to get a spare or get a repair done in a place which is more or less have become a monoply by these auto manufacturers. In some scenario's - there is a abdul garage but in some cases - I will be forced to stick to OEM dealer for spares/ repair. If abdul garage is becoming costlier in the longer run - I will look for john or vishnu garage, if they offer better service at a reasonable price (in this scenario - cheaper than OEM!).

You may be right that the OEM might charge me more in a different way to recover the fine amount - but that does not mean they should not be penalised for the malpractice they have done.

Around your comment on reasonable profit - if one doesn't know and start fixing arbitrarily, this is when the need for a watchdog like CCI or MRTPC comes into picture. Today Skoda, Mitsubishi - have good product lineup however small it might be, but people are not going near them because of such practices. May be for Hyundai or other who follow such trade practices - this is not far away.
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Old 30th July 2015, 21:39   #21
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Default Re: CCI fines Hyundai Rs 420 crore; Reva, Premier also face flak

Quote:
Originally Posted by alpha1 View Post
1. So how does this ruling help you? As I have already written, Hyundai is not there for charity so they will recover the revenue lost and the fine from you only somehow later.
Firstly, lets not call making a profit in the future as a recovery on a fine applied in the past. Hyundai's balance sheet this year will have a outgo due to the fine which will likely bring the profit percentage down. But they were not in the market to earn a fixed profit percentage to begin with. Their goal (like every other corporations) is to maximise their profit every year.

And if they want to increase their pricing, well Hyundai is welcome to try that really. If they can get away with it, its because customer still saw value in the purchase at the higher price.
But every time there is a price increase Vs the competition they start to become less attractive and their image of a VFM brand starts to slowly take a hit.

Quote:

* actually as long as local spares or unbranded spares are available, you have some kind of competition, but you as a buyer is so averse to buying the unbranded spares, that it creates a virtual monopoly


Are you sure that they are operating under competitive scenario ONCE you have bought their products?
Not sure if you have understood the reason for the fine so I will give it a try. Others are welcome to correct me if I am wrong. There are two main problems here:
1. Manufacturers mandate service via authorised service centres which are only allowed to sell branded parts. If the customer replaces something outside his warranty is void. Think Manufacturers are within legal boundaries on this one as it is quiet common (Phones, TVs, etc).

2. Manufacturers don't allow their dealers (by contractual means) to make their parts available over the counter. So there are no local/unbranded spares allowed by Manufacturers in the market. This is the anti competition practise.

If I as a user am consciously taking a decision to forgo my warranty because a spare/service is priced exorbitant(in the A.S.S), I should be allowed to do so. Or after my warranty has expired I should have an option to get my car repaired/part replaced from my friendly neighbourhood garage. Manufacturers are being anti competitive by only making spares available via its ASS and at the same time not allowing non branded/local spares in the market. This is what the fine is for.
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Old 31st July 2015, 17:56   #22
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Default Re: CCI fines Hyundai Rs 420 crore; Reva, Premier also face flak

Quote:
Originally Posted by maheshramaling View Post
1. I am unable to get a spare or get a repair done in a place which is more or less have become a monoply by these auto manufacturers.

2. but that does not mean they should not be penalised for the malpractice they have done.

3. Around your comment on reasonable profit - if one doesn't know and start fixing arbitrarily, this is when the need for a watchdog like CCI or MRTPC comes into picture. Today Skoda, Mitsubishi - have good product lineup however small it might be, but people are not going near them because of such practices. May be for Hyundai or other who follow such trade practices - this is not far away.
1. You are still bowing to the monopoly of Hyundai. You are buying the spare part material from Hyundai.

2. If you are ready to pay for increased price of spares no one has any problems. My post was about people who feel that this move will make their lives less expensive.

3. The first line is Marxism way of doing things via license raj. The second line, incidentally, provides the better way of solving such issues: lower sales.
Since people were bothered by the high price of spares from Skoda (and their irresponsible behaviour), they stopped buying Skoda vehicles. You don't require MRTP or CCI or any other Govt agency to step in (except the courts).
If Hyundai's action was truly not appreciated by customers till now, the customer's should've stopped buying their vehicles.

Quote:
Originally Posted by ashua View Post
1. But every time there is a price increase Vs the competition they start to become less attractive and their image of a VFM brand starts to slowly take a hit.

2. Manufacturers don't allow their dealers (by contractual means) to make their parts available over the counter. So there are no local/unbranded spares allowed by Manufacturers in the market. This is the anti competition practise.

3. Manufacturers are being anti competitive by only making spares available via its ASS and at the same time not allowing non branded/local spares in the market. This is what the fine is for.
1. The goal of a corp is not only to make profits every year, but (more important) to increase the shareholder value. So it is not possible that they overlook this fine as just a bad chapter in life and move on. However, you are right about the Total Cost of Ownership aspect. Many people DO make purchases based on that. But many people do not.
Anyway the market movement (sales) will speak what the market players (buyers and sellers) perceives and wants. I cannot be the judge.

2&3. Hyundai cannot stop unbranded spares from being sold in the market. Where have you observed that OEMs are not allowed sell the spares (for any particular manufacturer's make and model of vehicle) in the market? I know many spare parts shops where not even 20% of their stock is manufacturer branded!

Last edited by alpha1 : 31st July 2015 at 18:00.
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Old 31st July 2015, 20:22   #23
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Default Re: CCI fines Hyundai Rs 420 crore; Reva, Premier also face flak

I welcome this whole-heartedly, although I don't understand why Premier and Mahindra Reva were let off with a mere warning (instead of a fine). This is a continuation of the ₹ 2,554 crore fine on 14 other carmakers from last year:

http://www.team-bhp.com/forum/indian...ml#post3514505 (CCI vs Car Manufacturers : Restricting over-the-counter sales of spare parts)

At that time, Hyundai was not included in the list of 14 carmakers, as there was a case going on in the Madras High Court on the issue of open market availability of Hyundai spares.

I guess Hyundai lost that case, so the CCI is free to fine them now. I don't know if the other carmakers coughed up the fine or appealed against the CCI order.

Sensing that the sentiment was firmly against the restrictive supply of automotive spares, Hyundai began opening dedicated spare parts retailers across the country, though Mobis:

http://www.team-bhp.com/forum/indian...h-mobis-4.html (Hyundai begins Over-The-Counter sale of spare parts, through MOBIS)

-------

alpha1, I don't understand why you're not happy with the move meant to prod carmakers into ensuring the free and open availability of genuine spares.

While it's true that fines may not be able to put an end to the restrictive practices in the supply of genuine spares, these fines have had some effect on manufacturers already.

Ford have also opened dedicated spare parts outlets, on the lines of Maruti Suzuki and Hyundai:

http://www.team-bhp.com/forum/indian...are-parts.html (Ford India to start over-the-counter sales of spare parts!)

Genuine spares for some manufacturers are also available online on sites like 99rpm.

Apart from that, some (not all) dealer workshops also sell spares over-the-counter. This is true for Hyundai, Tata and I think Maruti Suzuki as well.

So while fines may not have the desired effect, I think it shows the CCI does want to end the monopoly on the supply of spares, and these fines are having some effect on the manufacturers.

I hope other manufacturers (especially the ones notorious for high priced spares that aren't easily available) are also forced to follow suit soon.

I see no reason why I should have give my car to a dealer workshop for an issue that I can fix by myself by just buying the required part (I have done this on a few occasions on Hyundai, Maruti Suzuki & Tata cars). Even if I can't do it by myself, the friendly neighbourhood "Abdul Garage" is always there to fix a genuine part that I purchase on my own.

It is a beneficial situation for customers whichever way you look at it.

Last edited by RSR : 31st July 2015 at 20:38.
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Old 14th August 2015, 16:46   #24
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Default Re: CCI fines Hyundai Rs 420 crore; Reva, Premier also face flak

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Originally Posted by RSR View Post

alpha1, I don't understand why you're not happy with the move meant to prod carmakers into ensuring the free and open availability of genuine spares.
I have never said that I am unhappy with free and open availability.
What I am unhappy with is the booing and cheering done by public without understanding the consequences.

CCI's move is not going to solve the monopoly situation.
You still have to buy parts from Hyundai India only ... ?
No?
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Old 15th August 2015, 03:13   #25
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Default Re: CCI fines Hyundai Rs 420 crore; Reva, Premier also face flak

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Originally Posted by alpha1 View Post
You still have to buy parts from Hyundai India only ... ?
No?
That applies to parts manufactured by Hyundai. But how many parts do they actually manufacture?
OEMs now have the option to sell the spares that they sell to Hyundai, directly to customers or retailers. This should bring the prices down.
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Old 16th August 2015, 14:18   #26
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Default Re: CCI fines Hyundai Rs 420 crore; Reva, Premier also face flak

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Originally Posted by rohanjf View Post
That applies to parts manufactured by Hyundai. But how many parts do they actually manufacture?
OEMs now have the option to sell the spares that they sell to Hyundai, directly to customers or retailers. This should bring the prices down.
That is not the CCI ruling.

The CCI ruling is that selling of spare parts from authorized workshops should NOT be attached to the installation and/or service offered by the authorized workshops.


The OEMs, unless they have an explicit agreement with the manufacturers, have always sold their parts via countless spare part shops across the country.

Last edited by alpha1 : 16th August 2015 at 14:21.
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