The truth about Mercedes India-2: Absence of regulation

The truth about Mercedes India-2: Absence of regulation - Moneylife

YOGESH SAPKALE | 14/08/2012 07:58 PM |

After filing several complaints to various authorities including the Competition Commission, Cama Motors, which raised the stink on Mercedes Benz, asks if there any authority in India which can take a decision on such matters in customers’ interest

Ahmedabad-based Cama Motors, a highly reputed and one of the oldest dealers of foreign cars, has filed several complaints to the Competition Commission of India (CCI) against Mercedes Benz for wrong business practices in the country. In the process, Cama Motors says it gathered dozens of pieces of hard evidence that is awaiting an appropriate body to verify or deny them in an atmosphere of fairness, but so far it has failed to find any such body.

The dealer also filed complaints with Daimler AG, German Embassy in India, ministry of surface transport, ministry of heavy industries, US Ambassador to India, Federation of Automobile Dealers Associations of India (FADA), and Automotive Research Association of India (ARAI). Cama Motors has even filed some applications under the Right to Information (RTI) Act, 2005. But till today, there is a complete silence from all the authorities concerned on all the safety and other issues it has raised.

“Here we were approached as part of an investigations dealing with a narrow bandwidth of largely commercial issues, yet when we opened the eyes of the CCI to rampant malpractices which were possible using the same avenues that were responsible for the commercial issues being investigated, they have been less than interested,” Rustom Cama, executive director of Cama Motors, alleged.

In his complaint to the CCI, he alleged “rampant malpractices” of Mercedes Benz regarding its aftermarket practices. He said, “We have offered to quickly sum-up technical issues which would lead to the imprisonment of the entire management in Germany for accidental deaths and yet, barely a passing interest has been shown. On the last occasion, when, one of our customers whose son passed away in a car where the airbags failed, we received a letter saying that the data from his car has been destroyed, we begged the chairman of the CCI for an appointment but have received no reply. Here we are able to prove that the original airbag report is a fake and now the company says the data was destroyed since many years have passed!!!”

Moneylife has all the documents backing the claims made by Cama Motors.

Jyoti Jindgar


Mercedes Benz India, however, has refuted all the allegations made by Cama Motors. In an email response, it said, “We strongly refute all the allegations levelled against us. We find these comments highly defamatory, vexatious and frivolous in nature and Cama Motors (our estranged dealer) is trying to tarnish our image; as such Mercedes-Benz India will pursue suitable legal course of action. We would also like to mention that a defamatory suit has already been filed against Cama Motors in Ahmedabad for similar defamatory activities carried on by him.”

Mr Cama alleges that Mercedes Benz is aware of the “defects in brakes transmissions, etc” but carry out corrective action in secret “service campaigns” when the car are sent to the dealer/workshop for other work. Even here, customers have to leave their vehicles behind for “an unjustified period without explanation”, to allow all this ‘unofficial’ work to be carried out, otherwise they risk then missing out on a life saving procedure!!!

In this connection, a reader, Deepak Sancheti writes, “The problem is much worse with Mercedes. Their workshops do not have an inventory of common spares even for the current models. For replacement of something like a battery, your car may get stuck for weeks as the “workshop will source it from Pune”. For smallest of problems your car may need more than one visit to workshop as you may find after having paid the bill for repairs, the problem still persists. What is worse is when you send the car back to workshop; you will get other bill for another replacement of part for the same problem.”

“The car manufacturer does not have any control on dealers and workshops. So if you have any complaint against the workshop, there is nobody who would listen to you, be it the Indian Company or their Global HQ,” Mr Sancheti, who has worked with the capital market regulator and the income tax before starting his own corporate practice, added.

Mr Cama alleges that dealers are forced to sign one-sided agreements, which are “totally immoral and unethical” and include “non-disclosure pacts”. This leaves the dealer facing “commercial and reputational suicide”. Illegal activities were forced to be carried out by dealers with the name “additional customer satisfaction campaigns,” he said.

According to Cama Motors, there is a document where cars of the same series of chassis numbers have had their airbags replaced but such documents are maintained secretly by the company and such operations are carried out selectively by dealers secretly.

It said, in 2007, Manish Patel, who was driving an E class Mercedes in Ahmedabad, lost his life when all three airbags in the front row failed to inflate. Similarly, in March 2012, Nirmal Saraf lost his life when travelling in a Mercedes S class as the airbag failed to open. In this accident only one airbag was inflated, unfortunately it was a vacant seat.

According to Cama Motors, in case of Manish Patel’s death, the company sent one engineer, Lothar Shuzzare from Germany to inspect the car. After repeated attempts, Mr Shuzzare and Mercedes Benz gave some incomprehensible technical data on a single sheet and now the company is saying that the data was destroyed since many years have passed. And yet, the same person was dispatched by the company to inspect the S class vehicle in which Nirmal Saraf died.

While in the first case Mr Shuzzare inspected the E Class of the Patel family at the spot, in the second case he demanded the S class vehicle to be handed over the Daimler AG for a report. “His claim was that the technology of Mercedes Benz is analyzable only by their own people. He even mentioned that the police in Europe also have to come to Daimler for investigating accidents,” Cama Motors said.

It added, “This is the stand of a man who has already submitted a report of airbag performance of our customer’s car with fake data! The truth is that Daimler never releases the full code and knowledge of control unit software so that market ready, freely available and legal scanning machines can fully read and analyse the memories and other devices of the car”.

Cama Motors, along with Vimal Saraf and a representative of the Patel family on 19 April 2012 met the Additional Director General of CCI. However, there is not much progress.

The issues Mr Cama raises have deep implications. If a reputed car manufacturer can indulge in questionable business practices but a customer does not have anyone to turn to for redressal, it is high time to have proper checks and balances and more importantly a regulator who understands and can deal with today’s as well as future generations of automobiles.

“The battle between Cama Motors and Daimler AG is not contingent on anybody’s support or help and we will pursue our duty to its end. However the lack of regulation and the sorry state of this country where even the Monopolies and Restrictive Trade Practices Commission (MRTPC) Act seemed better than its replacement cannot be handled by us. I am sure that the CCI does not even see itself as the relevant body for the range of issues raised by us and the ministries concerned have the impunity to disregard facts in spite of using the RTI act,” Mr Cama concluded.