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Old 16th June 2017, 16:55   #16
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Default Re: Competition Commission fines Hyundai 87 crores for unfair practices

There is an absolute fundamental mistake here, granted that both the supporters of this move and those against it can come up with some valid points to support their rationale but I felt this was kind of nutty from the start.. as if the Competition Commission has no other important stuff to look after.

To start with this has nothing to do with competition at all, any move otherwise can result in adverse conditions for the buyers themselves.. imagine one customer having the ability to negotiate and lets say influence *wink wink* with the dealerships owner.. he'll get a car at upto Rs.20-30k lesser than someone who neither negotiates nor has any influence with the dealership. The dealers too will start to lose money with each sale as word gets by.. any champion negotiator can knock off tens of thousands on a Rs.20 lakh car and he can come to Team-BHP and write about it in the "Booked my car" thread.. then we all will follow suit with the same dealer or with other dealers for the same price. When profitability goes down the dealers will look to other ways to gain money, legal or otherwise or if they don't they will cease to exist.

I for one feel that car dealers never make enough money, the Mini dealership in Bangalore for example.. I've counted maybe 2 dozen Mini's in the city so far, they have a setup in a posh location off Millers Road where rent will be massive and they have guys in suits who need to be paid good salaries as well.. how on earth Navnit makes any money is kind of puzzling to me and even as a 3rd party I feel a 40-50% margin per car is fair for them given the low sales numbers. For another example Trident Hyundai has about 4-5 showrooms, all about 8-10,000 sq.ft plus, helmed by a team of 7-8 sales force and other managerial positions extra. Any business needs money else they will drill a hole in the economy.. famous examples being BSNL (bleeds by the minute, their rates are highest and its a vicious circle), same with Air-India, of course both being government owned will be bailed out using our taxes, examples like Kingfisher Airlines show what will happen when there is no bail-outs.. not necessarily to the heads of the companies who will retire still stinking rich but to those who're employed by them.

I hope CCI looks into the telecom industry which has become the epitome of consumer arm-twisting (where port-out numbers aren't given out purposely) and where rates are manipulated out of lies etc. I'm no fan of the auto-industry but hey, I'm still sympathetic to businesses that operate out of wafer-thin margins with tremendous capital outlay and risks that can drown them.. the car dealership is one such business.
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Old 16th June 2017, 16:58   #17
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Default Re: Competition Commission fines Hyundai 87 crores for unfair practices

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Originally Posted by Strangerintown View Post
....... if a large deep pocketed dealer was using its deep pockets to abuse market position and put other dealers out of business.
So, would it be safe to assume that some major dealership chain was using its clout in the corridors of power to bring in this nefarious ruling?

Last edited by shashanka : 16th June 2017 at 16:59.
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Old 16th June 2017, 17:11   #18
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Default Re: Competition Commission fines Hyundai 87 crores for unfair practices

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Isn't this a 'secret' practice with others also? My Alto was invoiced at 5K extra because of this issue (invoice amount was 5K more than what I actually paid, because otherwise Maruti would cut their dealership).
Interesting you should mention this.

A Maruti / Nexa sales advisor was just telling me how Maruti sends mystery shoppers to showrooms. This particular mystery shopper was a lady who arrived in a Honda City with a kid. She was interested in the Ignis Automatic. She left after an hour at the showroom (sales guy didn't have a clue that he was being tested), and after some time, the sales advisor received his evaluation.

Maruti keeps using these mystery shoppers to check on service quality and what discounts are being offered. Interactions are also secretly recorded (phone audio or video). If anyone offers a discount greater than what Maruti allows, that dealer has had it. They are very strongly disciplined.
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Old 16th June 2017, 17:22   #19
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I have a doubt. Is this penalty with respect to discount or for the usage restrictions of consumables in hyundai service centre as well??. If dealers are penalized for using same grade shell oil instead of hyundai own oil then it is indeed anti competition, isn't it?
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Old 16th June 2017, 17:58   #20
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Default Re: Competition Commission fines Hyundai 87 crores for unfair practices

I think it has to do with the way the trade for auto is structured. What we have is dealers/ distributors and not agents/ franchisees. Each arrangement may invite a different interpretation in the eyes of law. Maybe laws don't allow the supplier to control/ manipulate the workings of a dealer.
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Old 16th June 2017, 20:26   #21
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Default Re: Competition Commission fines Hyundai 87 crores for unfair practices

Surprisingly the powers that be have not got beyond the colonial mentality where the Government just banned/fined/arrest.

Ban tinted glass to stop crime against women��
Ban red beacons -officials now use orange/blue beacons
Ban Bars on National Highway- states change them to 'state highway'.
Ban sand -builders use granite dust and buildings collapse.
Ban registering classic cars
87 crore fine on a multinational that is offering discounts to customers.

I wonder which world do these people live in?
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