Second hand warranty, brand new quality

The Philippine automotive industry is a strange entity. With quirks and concerns unique to itself, it has spawned a buyer-seller relationship that is unlike any other in the world. For example, as it is common practice that barter in this market is often relegated to one-time transactions, nowhere else in the world are cars without warranties more sellable. As a result, the Filipino second hand car buyer is forced to take mediocre performance in stride — the necessary evil of obtaining less than brand new products. But should this necessarily be the case? Are not consumers and buyers — even of second hand products — deserving of a solid aftersales support network?

For the record, there are in fact a few local companies that are trying to address this problem. BMW Philippines is at the forefront of this Herculean effort. With an established pre-owned program already rolling on all fours, it comes as no surprise that BMW owners are for the most part satisfied with their vehicles’ performance and long term value — even if their cars aren’t exactly brand new. The BMW Certified Pre-owned Program has become so popular, in fact, that it has spawned an avid fan base — one that has come to expect only the best that BMWs can offer. It has also borne the BMW Premium Selection Program, which gives extended warranties to second hand cars that pass a comprehensive 100-point checklist, giving added value unheard of to second hand cars (check out www.bmw.com.ph for more details on this program). Necessarily, the price range of a used BMW hovers above that of any of its perceived rivals. With a solid backing from the authorized local entity where parts, service and warranties are concerned, this evident advantage is easy to understand if not altogether swallow.

So why isn’t anyone following in the obviously right direction, you ask? Perhaps the question ought to be when will they do so to the extent that BMW has? As it is, similar although not as rigid programs already exist in both Cats Motors and Viking Cars, local distributors of Mercedes Benz and Volvo cars respectively. Here’s how it works. Benz and Volvo owners who wish to sell their cars now have the option to go straight to the authorized dealers to have their cars appraised. The cars undergo check ups and, if they pass, are given the thumbs up (or thumbs down) by the distributor. If they so choose, the sellers may then leave their cars in the dealership under a consignment agreement. What this does is give value to the eventual buyer who not only gets the car, but the assurance of its performance on certain levels as well.

While Cats Motors and Viking Cars do not exactly have requirements as rigid as those set by the BMW Premium Selection Program, at least they’ve taken steps in the right direction. At least these three entities recognize the value they have to give to their clients — whether they be buyers of brand new cars or pre-owned vehicles. Viking Cars — wary of Volvo’s weak resale value image — has even taken this a step further with the introduction of a 5-year comprehensive service package that promises a more cost effective aftersales service experience (again, something that BMW Philippines initiated). Viking Cars is hoping that such programs will jack up the long-term value of Volvos as well. (Though I really don’t understand how Pinoys can place so much more value in the perceived prestige of a brand than in the safety package it provides. But then it really is so Pinoy to put form over function where their cars are concerned.) Either way, with their modest programs, these entities have at least shown their interest in adding value to their products and in doing so subsequently showing that they value their clients — even after the initial sale.

To a certain extent, a number of smaller and less affluent dealerships have come up with similar programs as well. Unfortunately, they are small in number. What would benefit the Filipino used car buyer, really, is a serious, industry-wide effort to put together a program in the mold of the BMW model where consumers do not only get warranties along with their used car purchases, but a steady parts and service support package as well. In an ideal, consumer-driven market, such attention to detail is naturally expected from those who provide products and services. Unfortunately, we’ve yet to learn what an ideal capitalist environment is here in the Philippines. In such an environment, the consumers are the kings of the hill, not the slaves of circumstance.