Cars do not take out guarantees – Newspaper Kommersant No. 172 (7373) of 09/19/2022

The government is discussing the proposal of the auto business to introduce a moratorium on the collection of penalties due to delays in car repairs. The law requires car manufacturers to carry out repairs under warranty within 45 days, but in practice this is often impossible due to shortages of components caused by sanctions and logistics failures. Automakers and dealers are afraid of bankruptcy due to huge penalties, which sometimes exceed the cost of the car itself. But Rospotrebnadzor considers the introduction of a moratorium unacceptable.

In early September, the Ministry of Economy sent to the Ministry of Industry and Trade and Rospotrebnadzor a proposal from the Association of European Businesses (AEB) to introduce a nine-month moratorium on the application of certain provisions of the law “On the Protection of Consumer Rights” (Kommersant has the document). AEB in its letter referred to the risks of losses and bankruptcies of automakers in the Russian Federation due to lawsuits related to non-compliance with the terms of warranty repairs.

The appeal says: if a defect is found in the car that has not been eliminated in 45 days, the consumer, by law, has the right to terminate the sales contract, replace the product or reduce the price. At the same time, for each day of delay in repair, a penalty of 1% of the cost of the goods, or 365% per annum, is charged. The AEB notes that in the event of an annual delay in the repair of a car worth 3.5 million rubles. the penalty will amount to 6.4 million rubles, and taking into account the fine – 10.5 million rubles.

Manufacturers can incur similar costs, according to the law, if the car was repaired for more than 30 days in each warranty year due to the elimination of various deficiencies. The situation may lead to the bankruptcy of manufacturers and dealers, and then consumers “simply will not be able to restore their rights,” according to the AEB.

The cost of cars is “comparable to the cost of apartments in new buildings,” the AEB emphasizes, recalling that the government has imposed a moratorium on the collection of penalties from developers for failing to deliver objects. At the same time, developers have a much lower penalty – 0.03% of the Central Bank’s refinancing rate per day (now – 0.225%).

The AEB did not comment on the proposals, the Ministry of Economy did not answer Kommersant. The Ministry of Industry and Trade confirmed receipt of the letter, saying that it was under consideration. They emphasized that Rospotrebnadzor is responsible for the implementation of consumer protection policy.

In Rospotrebnadzor, Kommersant was told that they were aware of the AEB proposals, but called them unacceptable. They believe that the implementation of the proposals will inevitably lead to the unfair use of the “moratorium on liability”, the mass refusal to repair vehicles, the decrease in the quality of customer service and the unpredictable delay in the repair period. Rospotrebnadzor believes that “under the current legislation, there are enough legal instruments to resolve situations related to the inability of automakers to fulfill their obligations to customers in the event of certain events that none of the parties can influence.”

The threat of fines does not solve the problem itself, Vyacheslav Zubarev, president of the Russian Automobile Dealers Association, believes: “A critical increase in such cases can lead to the bankruptcy of a dealer or automaker, which is definitely not in the interests of consumers.” In some cases, it is simply not possible to deliver spare parts within the time limits stipulated by law, he concludes.

There are positions that cannot be brought unofficially, as sellers refuse to deal with cars for the Russian Federation, fearing to fall under sanctions, says Roman Timashov, service director at Avtodom Altufyevo. “If the spare part is in the Russian Federation, the repair period is no more than a week. In case of absence, the minimum period is from a month, everything is very individual, ”he explains.

The most noticeable shortage of complex elements (for example, electronic components), parts for body repair, notes Alexei Gulyaev, Deputy General Director for Avilon Service: “Waiting for some positions can take one to three months.” “But the dialogue with brands is ongoing, the only question is the timing. Many brands go along when dealers find the necessary parts themselves and try to bring them in alternative ways,” he emphasizes.

The AEB proposal is justified, says Vasily Khokhlov, senior lawyer at the law firm Kosenkov and Suvorov. “The courts often formally approach such disputes without taking into account the circumstances that influenced the violation of consumer rights,” he explains. “There is also a separate category of plaintiffs who abuse the right to enrich themselves.”

However, Vladislav Kocherin, managing partner of the Kocherin & Partners law firm, notes that few are aware of the provisions of the law that allow for ten years to demand the correction of significant shortcomings or make claims up to the exchange of a car for a new one. “If the sellers had initially correctly fulfilled their obligations without tricks, then no penalties would have arisen and there would have been nothing to declare a moratorium on,” he believes, calling the moratorium’s action against developers inappropriate. “Sanctions hit supplies, but not us they were announced. Companies that cannot cope with the current market conditions and the requirements of Russian legislation should give way to those who can.”

But dealers emphasize that it is not only about foreign companies. “Importers who have suspended their activities continue to support in matters of warranty compensation. But the situation cannot last forever, and it can be assumed that the importers will not approve the next year’s budgets – then the dealers will be left alone with warranty claims,” adds Roman Timashov. That is, in fact, dealers will no longer be compensated for the costs of warranty repairs. “An additional financial burden in the form of legal costs can destroy the business,” he believes. “If official dealers leave the market, we can predict a decrease in the quality of services provided in the entire area.”

Autoretail wants to maintain customer loyalty, as service and repairs account for approximately 40% of the business’s profitability, says Ilya Ivansky, head of Fresh Auto’s service direction. In his opinion, adjusting the terms of warranty repairs and maintenance will create opportunities for this.

Olga Nikitina