OCP finds no flaws in vehicle delivery and advance booking fee issues

The team visited around eight authorized vehicle dealers to verify complaints from the consumers

With complaints on social media from the aggrieved consumers against authorized vehicle dealers in the country for taking an abnormally long time to deliver pre-ordered vehicles and having to pay large upfront advance booking payments, a team from the Office of Consumer Protection (OCP) investigated on the issues emerging from the aggrieved consumers.

The OCP’s investigation, however, revealed that the manufacturing and shipping of vehicles were disrupted by the Covid-19 pandemic and such delays were beyond the control of the vehicle dealers.

While generally, the COVID-19 pandemic is understood to have disrupted the global supply chain for goods, an OCP official said there is a need to ascertain whether these delays were actually caused by the supply disruptions. “With some complaints, it is also important to find out if the advance booking payments are abnormally high,” he said.

The team found that the vehicle dealers had to deposit 100% advance to the manufacturers at the time of order. In light of this, the booking advance amount appears reasonable,” states the investigation report.

Another probe was on the terms and conditions of booking vehicles, which many claim were favorable towards the vehicle dealers, particularly concerning delays and cancellations.

“While they do not directly contravene consumer protection rules and regulations, the OCP has to explore ways and means to get the dealers to improve terms and conditions for the benefit and confidence of the consumers,” states the investigation report.

The report recommended that the OCP needs to carry out more awareness programs on the need to insist on terms and conditions and fully grasp the nuances of the terms and conditions, before signing the contracts.

In addition, for each brand of vehicle, there is only one authorized dealer in the country. Such monopolistic market conditions deprive consumers of the choice of dealers, thereby losing out in terms of price and the quality of service.

“While it would be ideal to have multiple dealers in the country for the benefits of consumers, it is understood the small size of the market does discourage manufacturers from appointing more than one dealer,” the report stated.

The report stated that the Department of Trade (DoT) could further explore ways to put in place multiple dealers through negotiations with the manufacturers.

Meanwhile, the OCP team visited the following dealers to verify if consumers’ complaints are true – Samden Vehicle, Thunder Motors, Zimdra Pvt Ltd, Singye Agencies, Bhutan Hyundai Motors, Dhejung Motors (Honda), STCBL, and the Shingkhar Pvt Ltd.

According to the OCP on factors causing delays in delivery of vehicles, generally, it is understood from most dealers that supply has been impacted mainly as a result of a decrease in the production of vehicles – which in turn is understood to be impacted by factory shut-downs, erratic supply of raw materials, including chips and further disruptions in shipping.

The manufacturers had notified the vehicle dealers (OCP verified emails received from the factory) about the delay in delivery. Subsequently, the dealers had intimated to individual customers (OCP learned it was done via emails and some through telephone calls).

According to the OCP, vehicle dealers also pointed out that the online registration system operated by the Department of Revenue and Customs (DRC) at Phuentsholing for import registration was open for two hours only twice a week (which according to them was not adequate, leading to further delays).

“The DRC corroborated that this issue persisted during the initial stage but now daily import registration facility is available,” states the report.

 The DRC also confirmed that during the nationwide lockdown, the import of vehicles had stopped and this would have also contributed to the delayed delivery of vehicles to the consumers. Keeping in line with the prescribed COVID-19 prevention protocols, goods clearance at the border were restrictive.

The OCP found that Clearing and Forwarding Agents (CFA) take a longer time to clear the goods; since the protocols permit clearance of only two trailers per day per vehicle dealer. This too would have an impact on the timely delivery of goods to the final consumers.

“It was found that the vehicle dealers have to make full payment at the time of placing the order to the manufacturing company by opening either an OD Facility or CD Accounts or through Real Time Gross Settlement (RTGS) remittance,” states the report, adding that the OCP verified this from the vehicle dealers by getting access to their official transaction records.

With regards to the impact of the pandemic on the timely supply of vehicles, the OCP found that dealers were affected in different ways based on the types and sources of the vehicles.

Regarding the terms and conditions about the cancellation of order, the OCP studied the terms and conditions of various dealers related to the order of the vehicles to see if there are any contraventions to the CPA, 2012 and its rules and regulations.

The investigation report stated that the terms and conditions were clear and does not directly contravene their rules and regulations, though most provisions in the contracts are designed to protect the businesses’ interest and do not seem to be highly favorable to the consumers.

Kinley Yonten

from Thimphu