Mainland Chinese get better terms than Hongkongers on luxury car warranties

Despite gripes about unfair treatment by global firms, HK offered worse deal from carmakers

PUBLISHED : Friday, 05 April, 2013, 12:00am
UPDATED : Friday, 05 April, 2013, 5:16am

The mainland media may complain about unequal treatment by global corporations, but when it comes to warranties from luxury carmakers, such as Mercedes-Benz and BMW, buyers across the border seem to be getting a much better deal than those in Hong Kong.

A Mercedes-Benz owner in the city gets just a two-year or 80,000-kilometre warranty - whichever comes first - on major components including the engine and gear box. Mainland buyers, however, get a three-year warranty with no cap on mileage.

The terms for Mercedes owners in the United States and Canada are even more favourable. Buyers there receive warranties for four years or up to 80,000 kilometres, according to dealers' websites. The Canadian warranties do not just cover major components but also wear-and-tear items such as brake pads and discs, for two years, while the US warranties cover the same for one year.

Warranties for Hong Kong buyers of BMWs are also the least favourable. A local BMW sales agent said buyers are given one year of warranty on major components. According to BMW sales agents across the border, buyers there get two years and unlimited mileage. According to BMW websites in the US and Canada, new cars there come with warranties of four years or 80,000 kilometres.

Zung Fu, the sole distributor of Mercedes-Benz in Hong Kong, said the warranty terms are decided by the carmaker according to the market environment. Its chief executive, Michael Lee, however, told the South China Morning Post that there is no free lunch, as car prices also vary between markets.

The basic version of Mercedes' ML350 SUV, for example, sells for 899,000 yuan (HK$1.11 million), excluding tax and insurance, on the mainland - compared with HK$699,000 in Hong Kong.

They are cheaper in the US and Canada, at US$54,941 (HK$429,000) and C$59,500 (HK$455,000) respectively.

Wesley Wan Wai-hei, a Mercedes owner and president of the Hong Kong Automobile Association, said the small size of Hong Kong's car market means carmakers usually get just one dealer for the whole city, resulting in lack of competition.

"Hong Kong cannot be compared with vast markets like China and the US," Wan said. "Unless the carmakers take over the sales and after-sales services from their dealers like Volkswagen did, Hong Kong car owners will still likely be subjected to high repair and maintenance costs."