The importing of vehicles by independant dealers (grey imports) has always been a sensitive issue for manufacturers, franchised dealers and consumers alike.
Now it looks like the Office of Fair Trading have been asked by these independants, to see whether they can stop carmakers from banning these grey imports coming into the UK.
So far Mitsubishi & Toyota have threatened to take legal action to stop these independants from selling cars imported from outside the EU. Cheap versions of pick-ups and cars are coming in from markets such as Japan and Thailand.
Mitsubishi has already forced one UK trader to return several pick-ups to Thailand as part of an out-of-court settlement and is confident European trademark law supported its position. Toyota has also written to importers demanding they stop.
Now the British Independant Motor Trade Association is in talks with the OFT about competition law. It believes Mitsubishi is abusing its position as an official importer. “Mitsubishi’s tactics will not go down at all well with the British public and the company is putting its reputation at serious risk,” says Richard Moore, general secretary.
Customer Protection
Actually it’s because of reputation that the manufacturers are taking action. Mitsubishi says it’s determined to protect its customers being mis-sold products. “Customers may be misled about the origins and standards of vehicles which they purchase from non-franchised dealers,” says Jim Tyrrell, managing director of Mitsubishi UK. Toyota says that the latest Hilux was imported from Thailand before it went on UK sale last month.
Like For Like (Our View)
While these independants have a right to make a profit, customers have a right to know what they are buying. Manufacturers own the right to protect their reputations, its dealer network and most importantly its brand. We feel it is precisely for this reason that likes of Mitsubishi & Toyota would want to stop these independants in the first place. Franchised dealers invest heavily in providing top notch facilities where as some independants sell off their own door steps with little support or loyalty to the customer.
Consumers need to be sure they are getting value for money and where a franchised dealer is competing against an independant, they are getting a vehicle that is like for like. Is the specification the same? Is the warranty still valid? This is where the situation becomes complex and is mis-leading because an independant may be selling a vehicle which has sat in a field in Thailand for 2 yrs, be out of warranty in the UK and therefor will have an adjusted price advantage over the latest UK model. And is the customer aware of exactly what they are buying? In most cases its unlikely.
Franchised dealers have to invest in training, showrooms and aftersales facilities and meet up to high standards set out by the manufacturer in order to sell their products. This is the only way a manufacturer can protect its brand, customers and reputation in a more measured way.
The UK car market is largely based on the customer being able to part exchange their own car in order to offset the price of a new one. The market place for a second hand grey import from Thailand would be vastly smaller than one bought and serviced in the UK, this inturn would have an effect on its value. Franchised dealers are more regulated and tend to stay away from grey imports due to history and warranty issue’s and its just not worth the aggrevation in the end. There may be a market for a grey import in the private sector, but its price would have to reflect its history and most people would have a part-exchange to off load anyway. It’s also an unregulated market place where the customer has little or no protection. Besides, a grey import which had a £2000 price advantage over the latest UK model, would be worth at least £2000 less when part exchanged and so the customers no better off financially and all of a sudden is faced with the hassle trying to sell it.
And so it’s back to the independant dealer who won’t even invest in the franchise and aftersales facilities in the first place, so they are hardly going to re-invest in the customer or part exchange in the long term. And if they do, you can bet it will be on their own terms and not the value’s set out by the industry which is there to protect them.