Sunday, June 17, 2007

More people in India having trouble with Honda?

Here are some examples that I came across on the Internet of people being harassed by Honda car dealers. Goes on to show that HONDA DOESN'T CARE.

Saturday, June 9, 2007

Why you should *not* buy a Honda car in India

Hi Readers,

Don't get me wrong.
Honda cars are good. In fact, they are excellent. I am a proud owner of a 1 year old Honda City ZX (CVT) myself. And I love my car. The problem, however, is that Honda-Siel Cars India does *not* seem to love me or my car. Here's why.

To cut it short, Honda after sales service in India is horrible. Especially, if you have owned a different company car before, *you'll feel like shit* the way you will be treated when you take your Honda car for servicing in India.

Actually maybe I am over-reacting. All the while I have owned my Honda car (a little over an year) I have always taken my car to the same dealer -- Ring Road Honda (Peera Garhi) -- for six-monthly servicing and for accident insurance claim and repairs. Therefore whatever I write here is greatly influenced by my experiences with Ring Road Honda. Maybe other Honda dealers are better. But something inside me tells me this is not the case. Let me explain why.

As per my knowledge, Honda presently manufactures and sells more than one hundred thousand cars (that's 1,00,000) in India annually. More than three-fourths of its cars are sold in Metros like Delhi, Mumbai, Chennai, Bangalore and Kolkata. Out of the cars that are sold within these metros, more than half of the cars are sold within New Delhi alone. And yet, the number of Honda dealers in New Delhi is just four (actually for quite a few years, there were only three Honda dealers in New Delhi -- the fourth one was added quite recently).

Therefore, going by the numbers, Honda must be selling close to 35,000 cars in Delhi annually. Note that this is just an estimate -- this number might not be entirely accurate. However, if you are a resident of the New Delhi (or NCR) region, you will agree with me that one out of every 7 cars in Delhi is nowadays seems to be a Honda City. In my office in Noida alone, more than 100 employees own a Honda car (we have about 600 employees working in my company).

Now if we take out the newest Honda dealer (Courtesy Honda) out of the picture for a moment (Courtesy Honda are about 4 months old in New Delhi), then approximately 30,000 Honda cars are being sold by three dealers (Ring Road Honda, Prime Honda and South-End Honda) collectively. This averages out to about 10,000 new car sales per dealer per year. This is a *huge* number. In fact this is an *extremely huge* number. Does this number give you an idea of the annual income of each of these dealers? Let us try and figure it out.

Let's assume that each dealer makes a net profit of Rs. 1,00,000 per car at the time of sale. Add to this another Rs. 10,000 per year (in the form of cost of servicing and repairs). This brings us to an unbelievable figure of Rs. 1,100,000,000 (= 1,10,000 x 10,000) per year, which is the income of each of these three dealers from the new cars sold annually. The figure above does not yet include the money these guys are making from the servicing and repairs of the cars they sold the previous year, and the year before that, and the years before that.

So, you would ask, how would the above discussion imply poor after-sales service of Honda cars in India? Here's why:

  1. Lack of competition: As I said, despite the huge volume of annual sales of Honda cars per year, there's only a handful of Honda dealerships around in each city. If a city like New Delhi, which accounts for the maximum sales of Honda cars annually has only three (actually four) Honda dealerships, imagine what would be the condition of smaller cities and towns in India. The existing dealers own all the service workshops, and they know that the customers are entirely out of choice no matter how badly they are treated. This makes Honda dealerships like Ring Road Honda (Peera Garhi) switch off their air-conditioners and fans in the sweltering heat of Delhi, even when the temperature outside might be exceeding 115 degrees Fahrenheit, just to cut down on their operating costs and maximize their profits. Unbelievable, isn't it?
  2. Lack of motivation: With each of the existing dealers making approximately Rs. 1 billion plus annually from the sales of new cars alone (see my calculations above), these dealers have no motivation to improve customer satisfaction. After all, due to the monopoly factor that I described above, they are going to get only a marginal return on the investment that they put in towards improving customer satisfaction. That's why they prefer to be completely indifferent towards their customers' problems and the inconvenience they have to go through to get their cars serviced.
  3. Lack of fear of law: We all know what a mockery the Indian legal system makes of the entire democratic setup in the country. Justice is a word that is relevant in only poetic context in India, not in real life. Supposing that a dissatisfied customer like me were to sue one of these dealerships for rotten customer care, the court case would drag on for zillions of years, and in the best case scenario, the court might impose a monetary fine on the dealer of a measly amount of something close to Rs. 5,000 as a punishment (if and when the case comes to an end). For a dealership that is making more than Rs. 1 billion in income annually, paying a fine of such a small amount is equivalent of taking a drop of water out of an ocean. The dealers know these facts as well as you and me, and therefore give a damn to what a customer thinks of them.
  4. Lack of fear of action from Honda-Siel Cars India company: Now here's where I feel the Honda company had a role to play, which obviously they are not doing. Theoretically, Honda-Siel Cars India Limited (hereafter referred to as HSCI) has a very nice feedback system in place for its customers to tell the company about their experiences with these dealerships. As a Honda customer, you are entitled to provide feedback on your service experience in a number of ways, including a web-based system. The intent of having a system like this in place is that people like me never have to go out on the web and write blogs like this one. However, the fact is, the company itself does not seem to be serious about taking action against the erring dealerships despite repeated complaints of quite severe nature that are made by the customers on a regular basis. There could be a mix of reasons for the company to behave indifferently towards its existing customers. However, the number one reason, according to me, is that as long as the number of new cars being sold annually remains high, thereby bringing a lot of money for the company, they will never feel motivated to keep their existing customers satisfied. In fact, they seem to love their dealers more than they love their customers. My personal experiences with HSCI is that they *never* respond to the customers directly, even in cases of serious issues. They will read your feedback; then they will (informally) talk to their dealer; then the dealer will offer you a (namesake) apology on phone and that's the end of the matter.
So the question that needs to be answered is, should you go ahead and buy a Honda car if you live in India? The question needs to be answered by you -- based on the two facts that I am going to summarize my article below in:
  1. The Honda cars are excellent.
  2. The Honda after sales service is pathetic.
Now the decision is up to you. You need to decide which factor you want to give more weightage to. To help you decide, I will quickly summarize what I exactly mean by "pathetic after sales service":
  1. Total lack of transparency in car service: You are never quite sure if all the checks were performed on your car as dictated by the technical requirements laid down by the company.
  2. Complete lack of customer care: When you go to get your car serviced, you will be made to sit in a shoddy lobby, even without fans and air-conditioning, no matter how high the outside temperature is.
  3. Extraordinary long time for simple tasks: Due to the overload of customers, each dealership takes their own sweet time to fix even simple problems. The last time I took my car for a simple denting-painting job (which would normally have taken 24 hours to complete), Ring Road Honda gave me my car back after approximately 20 days.
  4. Rampant corruption while handling insurance claims: No matter where which company you buy your car insurance from, the dealerships and the car surveyors act hand-in-hand to screw both you and the insurance provider to make illegal money. Each accident that you are involved in is an opportunity for the dealerships to make more money.
  5. Indifference towards the cars: Last but not the least, the way these dealerships seem to treat your car would make your blood boil. Imagine taking your 1-month old baby to the dealership to get her first free servicing, and getting it back all soiled and dirty -- with black grease marks all over the beige colored velvet upholstery in the interiors. And imagine this happening again and again, each time your car gets serviced.
That's it from my side. I was forced to make this information public, because of complete indifference shown by the dealer (Ring Road Honda, Peera Garhi) and the Honda-Siel Cars India company, even after tens of complaints that I made in written, through e-mails, through the Honda Cars India website, and verbally (on phone).

I hope at least some people who happen to go through this article will benefit somewhat from the information that I have provided here. If you feel like getting in touch with me to talk to me before making a decision, please post a comment on my blog with your e-mail ID or any other way you would like me to contact you.

Also, if you are in the same boat as I am, please do comment (and if possible, Digg) on my Blog. This will help getting our problem some visibility, and as a long thought, it might also help us get together in sufficient numbers and pursue a class-action lawsuit against HSCI for providing and encouraging rotten customer care through their limited, monopolistic dealerships in India.


(The author lives in New Delhi and works as a Computer Scientist with Adobe Systems India)

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