WARRANTY REPAIRS CAN RUIN CAR DEALERS IN RUSSIA

WARRANTY REPAIRS CAN RUIN CAR DEALERS IN RUSSIA

WARRANTY REPAIRS CAN RUIN CAR DEALERS IN RUSSIA
The Russian government began discussing the introduction of a moratorium for representatives of the automotive business. The proposal was made by domestic car dealers, according to whom, court costs and penalties associated with delays in the repair of vehicles can bring entrepreneurs to bankruptcy.

According to the Association of European Businesses (AEB), which proposed the introduction of a temporary ban on the collection of penalties provided for by consumer protection legislation, the situation with car repairs after February 24, 2022 turned out to be very tense. 

The sanctions that have hit the Russian economy and supply chain disruptions have caused a shortage of components in the automotive market. Many parts turned out to be almost impossible to legally purchase, and prices for a number of spare parts have increased significantly.

Russian legislation provides 45 days for a car manufacturer or dealer to repair. Otherwise, the client can terminate the transaction by asking for a refund or a replacement of the goods. The penalty is calculated at the rate of 1% per day of the cost of the purchased car. In practice, this means that for a car purchased for 3.5 million, the dealer may be forced to pay a penalty of 6.4 million (or even more than 10 million, if penalties are taken into account)

According to Kommersant, the AEB's proposal to impose a moratorium for a period of 9 months on the application of certain articles of the law "On Consumer Protection" was received by the Ministry of Economy. From him it was sent to other departments: The Ministry of Industry and Trade and Rospotrebnadzor. Representatives of the latter, apparently, oppose this method of reaction.

According to the employees of the supervisory authority, the refusal to repair a car, even if temporary, can reduce the level of customer service. In addition, it is now difficult to predict how much the repair period may be delayed in this case.

According to the agency, the position of the AEB cannot be called acceptable, given the existence of existing mechanisms in the legislation that can resolve conflicts between customers and car dealers.

In turn, business representatives call the situation threatening to all participants in the relationship. The ruin of car dealers may be unprofitable not only for entrepreneurs, but also for buyers, who in this case will find themselves alone with the problem. 

As an example of a way out of the current situation, the AEB points to the moratorium imposed by the authorities against developers who do not have time to hand over real estate objects within the stated deadline. At the same time, the amount of the penalty for them is only 0.03% per day of the refinancing rate set by the Central Bank.

ArtPhoto_studio  Freepik

20.09.2022