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Old 27th February 2007, 10:36   #1
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Default BMWs master strategy for India - Controlled cost of ownership

Theres a saying - "Its easy to buy a car. To maintain it is the real challenge". This is especially true for high-end cars like the Mercedes-Benz where service costs range between 15000 - 40000, and part failures run into six-figure bills. Recently, the air-con compressor on my C220 failed and the cost of repair was 1.1 lac rupees. Luckily I had 3 months of warranty coverage left. But I can tell you I am concerned about the post-warranty period.

I know of plentiful people who could buy a C / E Class without thinking twice, but yet opt for Honda Accords and Skoda Lauras after hearing of my C180 experience, astronomical service charges and the fear of part failures after the 2 year Mercedes warranty is over. BMW appears to have done their homework well, what they are offering is comprehensive maintainence packages for 5 years!! The standard warranty from BMW India is 2 years / unlimited mileage (just like M-Benz).

Buttttttttttttttttttttt while Benz does not offer any extended warranties, BMW offers:

1. Coverage for 5 years / 60000kms = This includes warranty coverage, servicing costs, parts replacement, labour etc. etc. At about 1.5 lac rupees. This ALSO includes brake pads. The only two things excluded are the tyres and battery.

OR

2. Coverage for 5 years / 100000 kms = Similar to the previous but the price is yet to be decided.

While 30,000 p.a. may sound like a lot to some of you, this is peanuts compared to Benz ownership for 5 years. There are also talks of including an optional package which would include any denting / painting work required on the car in this 5 year period. Also, the service interval for BMWs is 12000 (or 20% more than the Mercs). Mercedes finally has competition, and I can tell you.....their extended warranties will arrive sooner than you think.

P.S. The new Beemers come with iPod integration as standard!

Last edited by GTO : 27th February 2007 at 10:39.
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Old 27th February 2007, 10:43   #2
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This looks like a wake up call for Mercedes now. They should be out with their extended warranties by the time the locally manufactured Beemers hot the road and that too at competitive prices. The stage is set for the battle of the two German giants. I wonder where Audi will figure among these two.

If these cars were reliable in the first place the warranties would not matter much. Looks like they know their product well.
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Old 27th February 2007, 10:50   #3
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This package is also available abroad on all BMW & Mini cars & is very, very popular among customers. Simply because it makes a lot of sense as they take care of everything that needs to be replaced during normal usage apart from a few things like tyres etc. and at the cost that these packages are offered the deals are too good to resist.

If BMW is introducing this package and the contents & terms are the same vis-a-vis Europe then they could be well pulling out their Ace to counter Mercedes. Primarily because it makes sense for the consumer as the 30k p.a. cost is peanuts as to what a Merc today costs to service. My friend's C180 just had another Fuel Pump change for about 1.5L! If this was in BMW's package then it would have costed him Zilch!

And it makes a lot of sense for BMW since it ensures that their cars come to their authorised workshops only & thus regular business is assured. Also Ipod link has been standard on BM's abroad for quite some time.

P.S. Just to make it clear to everyone I'm very biased towards BMW's/Porsche's over any other brand.
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Old 27th February 2007, 10:51   #4
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Default Can FIAT do this?

After reading this, thought that Fiat can emulate this. Instead of giving huge discount of 60-80K on Palio.They can give 5years Total Maint Plan like Ford. This will generate confidence in prospective customers. I will definitely buy Palio 1.6 at 5.24L OTR in Mumbai with 5 year TMP!
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Old 27th February 2007, 11:59   #5
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Quote:
I wonder where Audi will figure among these two.
Superb point. Merc has their badge, and BMW has technology, badge and controlled ownership costs. Where does that leave Audi?

Quote:
My friend's C180 just had another Fuel Pump change for about 1.5L!
Merc pumps are very sensitive to adulterated petrol, I know of too many similar failures.
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Old 27th February 2007, 12:30   #6
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If cash was a problem for the rich owners:

BMW India and ICICI Bank have announced their plans to start offering financing solutions to prospective Indian customers.
With this deal, BMW customers will now be able to avail a range of tailor-made financing solutions from BMW Financial Services. These would be offered and provided by ICICI Bank at competitive interest rates.



Source:
BMW India and ICICI Bank to offer financing solutions in India
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Old 27th February 2007, 15:20   #7
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Maruti and Hyundai seem to have lower failure rates than Mercs. Are these guys pricing their vehicles just for the brand value.

Secondly, do Mercs have the same failure rates in Eurpopean and other Asian markets? Hope they are not short changing Indians. Maybe with competition they will learn.
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Old 27th February 2007, 18:03   #8
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Quote:
Maruti and Hyundai seem to have lower failure rates than Mercs. Are these guys pricing their vehicles just for the brand value.
Well, an E-Class is a lot more complex than the Baleno. But you are right in a way. Lexus, with all its features, is still far more trouble free than the germans.

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Secondly, do Mercs have the same failure rates in Eurpopean and other Asian markets?
Yes, Mercedes fared very badly in recent JD Quality surveys. Way below the industry averages.
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Old 27th February 2007, 18:20   #9
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Quote:
Originally Posted by Dippy View Post
If these cars were reliable in the first place the warranties would not matter much. Looks like they know their product well.
I was wondering - it could be a reverse psychology working here. Say BMW know that their product will be largely trouble free. They cash in on the apprehension in the mind of prospective customers, for whom till date, the benchmark was the high Merc cost of ownership. To give relief to that apprehension they charge 1.5 L upfront. Considering they have a trouble free car, they make a neat packet.

This thought came to my mind, since BMW parts are surely pretty expensive. Can they realistically cover it within 1.5 L for 5 years , even considering they invest the money well ?

However, if quality is not up to the mark, then they'll be in a fix honouring those warranties.
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Old 27th February 2007, 18:33   #10
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Quote:
Originally Posted by GTO View Post
This is especially true for high-end cars like the Mercedes-Benz where service costs range between 15000 - 40000, and part failures run into six-figure bills. Recently, the air-con compressor on my C220 failed and the cost of repair was 1.1 lac rupees. Luckily I had 3 months of warranty coverage left. But I can tell you I am concerned about the post-warranty period.

I know of plentiful people who could buy a C / E Class without thinking twice, but yet opt for Honda Accords and Skoda Lauras after hearing of my C180 experience, astronomical service charges and the fear of part failures after the 2 year Mercedes warranty is over.
@GTO... being a mercedez owner do u think all the above is worth it? Its given that C class would be better than a camry and an accord but is it so much better that u sacrifice all the above n more just to buy a merc.
Or is it just the status, have money will spend. I have never sat in a merc let alone drive it, wanted a subjective view... thats all.
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Old 27th February 2007, 19:14   #11
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Hi extreme torgue,

Check this link out. It will tell you what I think of my car.

That said, I will agree that:

1. It is surely overpriced.
2. The upkeep cost is exhorbitant.
3. At that price, the problems are unjustified.

Butttttttttttttt my C220 plays a dual role as a personal car and as a car to transport certain foreign business guests. And I can tell you, it has more than paid for itself. A couple of times over.
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Old 27th February 2007, 21:24   #12
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BMW is really planning on making a bang entry into the Indian market. I love that BMW is offering the same services it has offered in the USA etc. regarding extended services and maintenance. Now if anybody could give me the contact number for BMW India it would be great since I need to inquire for extended warranty and service for the M5!!
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Old 28th February 2007, 01:38   #13
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Quote:
Originally Posted by iraghava View Post
My friend's C180 just had another Fuel Pump change for about 1.5L! P.S. Just to make it clear to everyone I'm very biased towards BMW's/Porsche's over any other brand.
1.5 L? are u sure? coz thats a lllooottt of money and dude ure partial to the BMW and Porsches till u hear what their parts cost. See, there are far too many mercs in India a comapared to the other brands so the parts availability in the grey market is abundunt as compared to BMW and Porsche, wherein u may get certain parts only but the rest u have to source it from the company directly, tahts where u get whacked. Not all parts are available in the grey market for the Bimmer or the Porsche.
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Old 28th February 2007, 08:48   #14
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5 years is a along time over and above the std 2 yr warranty. Most BMW owners will change their cars before 7 yrs.
1.5 Lakhs doesnt seem much for 5 years but BMW should consider coming out with a plan for 2 or 3 years for a cheaper price, that would be perfect.
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Old 28th February 2007, 09:21   #15
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Quote:
Originally Posted by Sahil View Post
5 years is a along time over and above the std 2 yr warranty. Most BMW owners will change their cars before 7 yrs.
1.5 Lakhs doesnt seem much for 5 years but BMW should consider coming out with a plan for 2 or 3 years for a cheaper price, that would be perfect.
Thats a really good point. But think of the second hand market. Imagine buying a 2 year old 3 series and using it for 3 years without having to worry about maintaining the car for that period.
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