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Carmakers call for 'balanced' lemon law
Felipe F. Salvosa II, BusinessWorld (04 Mar 2005)

MANILA, PHILIPPINES: Automakers yesterday pledged support for a proposed law on "lemon" cars but said legislators must "balance" consumer protection with the interest of motor vehicle assemblers.

Elizabeth H. Lee, president of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI), noted the need for a "voluntary, orderly, expedient, and inexpensive" way of dealing with consumer complaints.

But she also a lemon law should define the rights and obligations not only of buyers but of sellers of vehicles as well.

"Strike a balance between the rights of both the buyer and the seller of motor vehicles. Our customers are not only patrons of our products, but are essential partners of the vehicle manufacturers and dealers," Ms. Lee said.

She also said warranties offered by CAMPI members were at par with global warranties, although age and mileage policies differ across countries.

The proposed law must also be "fair and reasonable," and appropriate to the "state of industry and market development," Ms. Lee said.

"Sellers must be afforded equal protection of the law. Indeed, as an unfortunate fact, there are cases of lapses from both buyers and sellers," she added.

Car assemblers have been reeling from poor demand and competition from cheap imported used vehicles. Industry sales dropped by 4.7% last year to 88,003 units from 92,336 units in 2003. But the industry expects 8% growth this year to 95,000 units.

Trade Secretary Juan B. Santos said a lemon law would add "more teeth" to the Consumer Act.

"At the same time it urges members of the industry to realize a sense of absolute liability on the public's safety and general welfare alongside marketing their products and services," he said.

"It will also lessen after-sales service for car distributors as complaints on defects will abate and redound to savings on replacements, particularly on defective servicing for the car firms," he added.

Mr. Santos had endorsed Senate Bill No. 1812, "An Act to Enforce Warranties on the Sale of Motor Vehicles and Imposing Penalties for Violations Thereof," and House Bill No. 775, "An Act Providing Protection and Remedies to Buyers of New and Used Motor Vehicles."

These bills entitle buyers of lemon cars to a replacement or refund if the seller fails to correct its defects.


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