… Customers also plan to make a similar move

Yangyel Lhaden

Dissatisfied with the dispute settlement committee’s (DSC) report that implicated Kuenphen Motors for not delivering specific electric vehicle (EV), the dealer has lodged an appeal with the Thimphu Dzongkhag Court against the decision.

The DSC asked the dealer to pay Nu 30,000 to all Neta V and MG ZS electric vehicle customers. The taxi operators, who claimed that the vehicles did not meet the promised specifications, filed complaints to the Competition and Consumer Affairs Authority (CCAA).

On May 26, fifteen MG ZS taxi operators filed a complaint with the authority asserting that the vehicles did not achieve the promised mileage of 419 kilometers (km) and that certain advertised features were missing.

Similarly, in April, 40 Neta V taxi drivers wrote to the CCAA highlighting that the EVs they received had a reduced range of 384km instead of the promised 401km, and they were charged more than the pre-booking price.

Owner of Kuenphen Motors, Thukten said that his appeal to the court was based on the fact that the DSC’s investigation report did not fully disclose all of their findings. He said that he had been wrongly charged and was prepared to pay what was rightfully owed, but not the Nu 30,000 based solely on the violation of the Consumer Protection Act ( CPA).

The taxi drivers said that the compensation offered did not adequately address the problems they encountered. They emphasise that the compensation was based solely on the violation of consumer protection laws and regulations, without effectively resolving the core issues. “This is why we are going to appeal to the court so that we can receive justice,” they said.

MG ZS taxi operators are seeking either refunds or the installation of the missing features as advertised by their dealer. On the other hand, Neta V taxi operators are looking for a refund of the extra amount they were charged beyond the pre-booking price, as well as compensation for the discrepancy between the promised 401 km and the actual 384 km range of the Neta V vehicle.

Both parties are required to file their appeals with the court by August 31, as per the DSC’s order. This allows them a window of 10 working days from the date of the DSC’s ruling.

Neta V case

While the DSC dismissed the claims related to price fluctuations after verifying the rates, Thukten said that he should only be accountable for the excess amount he charged to a few customers based on the standard price calculation format developed by CCAA. 

“I will only be liable to pay what I owe to my customers and recover money from those I have charged less,” he said. 

Thukten said that it was important to have a section in CPA to address allowable profit-margin for business establishments for relevant authorities to verify whether business owners have charged exorbitant prices to consumers. 

“In the absence of allowable profit margin, CCAA developed their own standard price calculation to calculate whether I have charged more to my customers but DSC has not revealed it in their investigation report,” he said.  

One of his reasons to appeal is based on standard price calculation which was not revealed in the investigation report. 

A CCAA official involved in the investigation said that electric vehicle customers paid only advance or equity amounting between Nu 50,000 and Nu 100,000 at the time of booking and as a result, the differential calculation was not relevant. 

“However, DSC accepted there were fluctuations in dollar exchange rate at the time of telegraphic payment dates and free on-board invoice and the pre-booking form clearly mentioned prices were subjected to change according to fluctuations in the exchange rate,” he said.  

The official said that the dealer appears to have misunderstood the decision of DSC. The compensation and charges from DSC were solely based on the first allegation on the supply of different variants of EV.

“Moreover, Kuenphen Motors accepted that the vehicles delivered to the buyers are 384km range vehicles. Based on this acceptance, it was confirmed that there are differences in specifications of the vehicle paid for and delivered such as in range, peak power and peak torque through the investigation,” the CCAA official said. 

The official also said that Kuenphen Motors, instead of taking remedial actions, had misinformed the buyers that the vehicle would achieve the indicated range over time. “Hence, the failure to inform regarding the change is direct contravention to CPA, 2012 and CPRR, 2015.”  

Thukten said that he was not the manufacturer and that he couldn’t be held accountable for delivering 384km vehicle when he worked according to the direction of the principal company. “How can I import 401km Neta V when an export version is 384km?” 

The CCAA official said, “As per existing law,  the onus is on them as authorised suppliers to inform  consumers regarding any changes in the specification of vehicles so that consumers can make informed purchase decisions.”

“If the dealer had informed regarding the change, the buyers would have the choice to either reject the goods or to switch to another brand,” the official said. 

The calculation of this compensation was determined by the DSC as empowered by the CPA, 2012. The compensation was for economic harm caused to the consumers as a result of misrepresentation by the business and not for price fluctuations as alleged, CCAA official said. 

MG ZS issue 

The DSC asked Kuenphen Motors to compensate Nu 30,000 to customers for failing to provide the MG ZS UK version. Thukten claims that he has never advertised the vehicle as UK and Sri Lankan versions. 

“The vehicle was advertised as MG ZS—Exclusive and Excite and we delivered vehicles based on these two versions. This issue came as a new issue from DSC,” he said. 

A complainant MG ZS taxi operator said that their issue was with the advertised features of MG ZS that were missing in the EVs delivered to them.

The CCAA official said that the dealer did not promote EV as either Sri Lankan or UK version but upon inquiry, the dealer said that the missing features of the vehicle were only in the MG ZS UK version and the ones that were supplied were the Sri Lanka version.

The DSC couldn’t figure out the exact price difference between the UK and Sri Lankan MG ZS electric cars because of the absence of a price difference between the two, according to the DSC investigation report.

A complainant MG ZS taxi operator said that if UK and Sri Lanka versions MG ZS existed, the CCAA should be able to find the price difference between the two. 

The dealer submitted cost sheets of the different lots of vehicles that were imported, and there was no difference in the costs in the cost sheets provided, the CCAA official said. 

“Then Kuenphen Motors was asked to submit the ‘total costs’ for the features that were available in the advertised version but not in the supplied ones; which they said they are not able to determine,” the official said. 

“In the absence of price difference, DSC as empowered by the CPA, 2012, decided to direct Kuenphen Motors to compensate the aggrieved consumers,” the CCAA official said. 

The committee also had difficulty in reaching a definite conclusion on the mileage issue. “As a result, the complainants’ claim of misrepresentation lacked substantiated evidence, and the committee couldn’t find it reasonable since the matter might be beyond the dealer’s control,” the DSC’s investigation report stated. 

Thukten said that regarding the range of EV, numerous induction courses and advocacy sessions were provided to taxi operators by Project Management Unit of electric vehicle since its inception in  2019. “The sessions covered how mileage and range of electric vehicles would fluctuate in our geography.”  

“There is circumstantial evidence that the dealer has made misleading representation and false advertisement, which has caused economic harm to consumers,” the CCAA official said.