[lamborghini]

Originally Posted by prkiran

Let's say someone buys the car and takes it to the service center for a part replacement, won't a company like Volvo have all sorts of machinery to find whether the part is original and covered under warranty or not? Why should this be different from someone buying a pre-owned luxury car which is still under warranty?

The way I see it, by not buying from an authorised dealer, the car is sort of like a grey market import. Volvo India has no control over the PDI and there could be a lack of appropriate checking to ensure the car is 100% up to their standards before it is sold to a customer (who probably bought it for less than what Volvo India charges).
Therefore, if there is a warranty claim, for whatever reason - it would be expected that they will not honour it. In fact - if it is one of the vehicles that was flooded - all the more reason to not honour warranty as they themselves are saying the vehicle is not fit to be sold as new to a customer.

It's like buying electronics in the grey market - don't expect the company to uphold warranty claims.

I'm pretty sure it was the same case with the private imports back in the 90s - the Landcruisers and the like.

In fact - coming to pre-owned; Volvo India offers their unregistered demo vehicles for sale with a full 2 year warranty starting from the day these vehicles are sold to the end customer. Very few (rather, are there any?) other manufacturers do that! Generally demo vehicles have a warranty starting from the day the vehicle was being used as for demos/TDs

[Turbanator]

still sell for such low prices? It should have shot up beyond the price of a new car IMHO.

We should not doubt entrepreneurial skills of used car dealers especially in this part of country And they must have picked from Insurance at total loss prices. Barcoded / plastic wraps are easy. There are only 4 private imports of XC90 as per Zauba data in Delhi and 3 of these are diplomatic imports. These days it's kind of impossible to cheat customs that too when it's going to be duty-free. Besides the assessable value of these imports is very high, landed costs at full value will be over 1 Crore. Over here XC90 is being sold at almost Zero discounts and it's hard to imagine if some dealer will sell in losses.

[hrsraghav]

Whenever one buy a used car, the whole history of the car is clarified. There is a case when car is sold at first by its manufacturer, and then sold to 2nd third or nth user. I don't think anyone can have any issue in it unless all the required aspects of warranty are honored (timely service etc..). So if one buy a brand new car from Volvo, then sells it to someone else, then will Volvo refuse warranty claims? Or rather can they refuse to do so?

I feel most likely the history is not being shared for these cars or it has some gap in between the manufacturing and first seller. By the response of Volvo it seems these cars weren't sold at all by Volvo to any of end users, and BBT got hold of them at some dirt cheap price (Flood theory seems most logical). However all is a speculation.
I expect a public clarification by BBT soon on this. With this segment of market they can't afford uncertainty, it just wont effect sale of those 3 cars rather every customer for any car over there will be a bit susceptible.
before going ahead.

[swiftnfurious]

Originally Posted by Zappo

...Now, if such a car has no illegal history attached to it and still ends up costing sizably less than what the manufacturer is selling it for then it also draws up some very interesting inferences about the kind of margin the manufacturer has put up. If so then it should not be a surprise that the manufacturer will try to discredit such an importer to preserve its turf...

I once had a discussion with an SA from Mercedes and he said the margin on MB cars are to the tune of 30-40% ! Now, this leads to another question - why would a dealer sell it to the BBT guys for a good discount when they can probably sell it to an end customer directly with better margins / lesser discount?

What's the kind of discounts the BBT team is managing if they have to sell it way lower than the Volvo dealers (assuming that's the only way these guys can woo potential customers), still managing decent margins on their end sales?

Kind of reminds me the prominent ads once Nikon & Canon had on their sites that the products bought through online shops (Flipkart & Amazon) may not be genuine & entitled for a warranty, though anyone bought it through this sites were able to register the product on the parent website!! The intention was to induce some scare to reduce the discounted sales through the etailers after complaints from their dealer's brick & mortar stores.

Edit:: If Volvo is bothered about not offering any warranty on the flood affected cars (assuming these might be from that batch), they might as well release a notice stating the VIN details of those many cars.

[Mad4bhp]

Originally Posted by Zappo

It should have shot up beyond the price of a new car IMHO.

They would have got the cars dirt cheap if they were indeed flood affected. Doing it up would not have cost them much. A 15-20 lakh difference is then possible and they would still have earned enough profit.

There should be a way to check if they were imported by Volvo or if they were individual imports. At least Volvo should be able to tell that. The only reason I see Volvo India publishing this ad is to safeguard their image. I too feel they are flood affected cars and Volvo India does not want to get into any mess with warranty claims.

That said, they service centers should still proceed and do the regular service. I saw an recent ad wherein Ford claimed that their cars allow less dirt/water to seep in.

Are the luxury cars any different. I mean, are they safe during floods in keeping the water away to certain extent.

[GrammarNazi]

I feel the problem is this :

Big Boys Toys could be privately importing them from foreign dealers. Since the premium charged in India by Brands is super crazy high, the car would cost massively less than what the Authorised Dealers sell them for here. Hence the scope for a reasonable profit even if sold at a lower price, albeit without warranty.

Authorised Dealers probably make heavy margins on Car Sales. The cars themselves are not very unreliable, so dealers get mostly low paying warranty work in the first 3 years. Cars sold through non-authorised dealers too are probably good, but they occasionally help ASC's earn in service & repairs even when the car is new. Volvo probably sells parts to dealers at low / "reasonable" rates to help the Authorised Dealers businesses be viable (as a luxury brand), & dealers make sizeable margin as non-warranty & post warranty service & repair charges in the cars sold through the Authorised route.

Now, the Indian law says that parts should be sold Off-The-Counter, so dealers may be buying parts for servicing / repairing these new cars & making hay. While Volvo hasn't even sold as many cars, so they don't know how they should allocate finances in stocking which parts. If service is bad, genuine Volvo customers would complain & that'd hurt the brand name & cause a dip in the sales in India through Authorised Dealers. So, service or repair experiences have to be good, with proper part availability at ASC.

This is very tough to achieve if the sales numbers of various models are unknown due to such non-authorised sales. Overall, this not just affects Volvo's profitability but also doesn't allow them to understand where the market demand stands. Hence Volvo may want to discourage such purchases, and this is done through public notices.

[reignofchaos]

Originally Posted by GrammarNazi

I feel the problem is this :

Big Boys Toys could be privately importing them from foreign dealers. Since the premium charged in India by Brands is super crazy high, the car would cost massively less than what the Authorised Dealers sell them for here. Hence the scope for a reasonable profit even if sold at a lower price, albeit without warranty.

I think you have pretty much hit the nail on the head. The real source of these cars at BBT is unknown and probably either flood damaged vehicles or parallel imports. As a result, the prices are probably lower than what Volvo India is charging for the same.

Authorised Dealers probably make heavy margins on Car Sales. The cars themselves are not very unreliable, so dealers get mostly low paying warranty work in the first 3 years. Cars sold through non-authorised dealers too are probably good, but they occasionally help ASC's earn in service & repairs even when the car is new. Volvo probably sells parts to dealers at low / "reasonable" rates to help the Authorised Dealers businesses be viable (as a luxury brand), & dealers make sizeable margin as non-warranty & post warranty service & repair charges in the cars sold through the Authorised route.

AFAIK, being a Volvo owner, the prices quoted by default on paper without negotiation are obscene. However the good part is that the dealers do offer massive discounts on the list prices - some without asking, more after some arm twisting. If they lose the ability to price their products as they like due to parallel imports, I'm sure they would be in a spot of bother.

Now, the Indian law says that parts should be sold Off-The-Counter, so dealers may be buying parts for servicing / repairing these new cars & making hay. While Volvo hasn't even sold as many cars, so they don't know how they should allocate finances in stocking which parts. If service is bad, genuine Volvo customers would complain & that'd hurt the brand name & cause a dip in the sales in India through Authorised Dealers. So, service or repair experiences have to be good, with proper part availability at ASC.

This is very tough to achieve if the sales numbers of various models are unknown due to such non-authorised sales. Overall, this not just affects Volvo's profitability but also doesn't allow them to understand where the market demand stands. Hence Volvo may want to discourage such purchases, and this is done through public notices.

Right now, there is no local stock of parts in India unfortunately other than wear and tear parts like filters, brake pads/discs and wiper blades. Any additional option or body panel etc is imported on order by the service center from Sweden. The lead time for these parts is in the order of 3-4 weeks depending upon the local customs babu.

What I do appreciate about Volvo over the German big three is that wear and tear parts are priced rather fairly even considering the import duties. The cost of servicing an entry level Volvo is not much more than that of a D segment sedan. Even repainting, accident repair labor charges are rather fair. So I'm sure that service centers don't make much money from either of these services. Anecdotal evidence suggests that the cars are in general more reliable than their German counterparts too and as a result, I'm sure there's not much warranty/repair work that needs to be done.

I'm guessing Volvo is just protecting their market since they are a small manufacturer and their visibility in India is already quite poor.

[invidious]

This seems like a classic case of "Grey Market" products. I know someone based in the US whose entire business is built of "Grey market" products - as he pointed out, it is legal, maybe not ethical. For example, he would directly import a popular brand of Indian beer into the UK and US and supply them to Indian restaurants and liquor stores by undercutting the official distributor. He did this for all sorts of colognes, shampoos, soaps and other FMCGs. And all of it is legal. I am assuming the same principle applies to these cars. If they are legally imported, a reseller can undercut the main distributor and sell the Volvos at his price point. But Volvo is still not obligated to honor warranties as it does not know how the products were shipped and indeed if any parts were replaced. I doubt they can legally deny service though if the customer is willing to pay.

[AutoNoob]

I have a different view about the import of these cars.

In India, as per Import rules, import of used/ second hand cars is not permitted. Relaxations to this rule are granted by DGFT on case-to-case basis after thorough scrutiny and due approval from concerned ministry/ department. Such relaxations include - Diplomatic vehicles, used vehicle(s) of a NRI shifting back to India, vehicles imported for R&D purpose by OEMs or other agencies, display vehicles for AutoExpo etc. (not to be sold/ driven in India).

Now, in case the cars are new, there is already a registered importer for these cars (Volvo India), so others can't import the same.

So, since Volvo has disowned those, how BBT cars fit in the above rules, I fail to understand. Smells like some well-oiled nexus.

[v12]

Maybe the reason could lie here as mentioned earlier on the forum :

http://www.team-bhp.com/forum/indian...se-prices.html

http://www.team-bhp.com/forum/indian...aged-cars.html

[ajmat]

Ok folks, I spoke with the Volvo guys during my recent S90 drive. What is happening is that cash strapped authorised dealers are unloading stock to BBT who resell at prices well below the permissible discounts. Dealer wins in liquidating stock, BBT make some kind of margin.

It is nothing to do with XC90's from Thailand or similar (XC90's have a waiting list and dealers can sell each one of them). The same thing is happening for BMW 520d's so I understand. Manufacturers except Maruti/Hyundai have no leverage as they cannot find an alternative dealer to invest Rs 20+cr in a low volume dealership.

In the UK, car broker sites do the same thing. A lot of times to get around it, one buys a lot of cars to avail of a fleet discount and sells the pre-regd cars off. In the UK, people and finance companies are not too hung up on the "virginity" factor of being the first owner.

[Yeldo]

Originally Posted by ajmat

... cash strapped authorised dealers are unloading stock to BBT who resell at prices well below the permissible discounts...

Originally Posted by ajmat

... (XC90's have a waiting list and dealers can sell each one of them)...

I am sorry, but I am unable to make a connection.

If the XC90 has a waiting list, why sell it "below the permissible discounts"?


And if BBT gets its cars from Volvo's dealers, wouldn't it be more appropriate for Volvo to restrain such dealers and not go after some used car trader who makes no public claims to be an authorized dealer himself ?

[ajmat]

Originally Posted by Yeldo

I am sorry, but I am unable to make a connection.

If the XC90 has a waiting list, why sell it "below the permissible discounts"?


And if BBT gets its cars from Volvo's dealers, wouldn't it be more appropriate for Volvo to restrain such dealers and not go after some used car trader who makes no public claims to be an authorized dealer himself ?

As I stated, Volvo can sell every XC90 thet they import. There was speculation earlier in the thread that XC90's were discounted.

Restrainig dealers? Please see my quote below

Manufacturers except Maruti/Hyundai have no leverage as they cannot find an alternative dealer to invest Rs 20+cr in a low volume dealership.

[Yeldo]

Originally Posted by ajmat

... Volvo can sell every XC90 thet they import...

Oh, I did not get you earlier.

So Volvo allocate cars to various dealers and some of them sell their stocks to BBT and use BBT as some sort of a 'conduit' (for want of a better term ) to sell cars at at prices below prices permitted by the company.

Since it is not easy to go after their dealers given the size of investments and the low leverage the car company have on them, they target BBT.

Now it makes sense. Thanks!

[kraken]

Originally Posted by ajmat

As I stated, Volvo can sell every XC90 thet they import. There was speculation earlier in the thread that XC90's were discounted.

Restrainig dealers? Please see my quote below

Fairly new member here but if I can put in my 2 cents.
I think ajmat is on point here. There are cases of IT dealers (I know it's not even remotely linked with car trade, but business/ trading point of view) who sell the entire lot of laptops/computers at 1-2% profit to maintain liquidity. My speculation on the sale is, a lot of car dealers must have payments they need to honor and still have sizeable stock piling up. Selling it to large volume guys BBT ensures sale in number (rough figure brings it to 3 cars = at least 2.1 cr). Cash in hand and invoice entered, no pressure from Company nor are your cheques going to bounce. Win - Win situation.