Around one of the BMW dealers. Clients of the BMW Independence center claim that they cannot receive paid cars, although they are physically located at the dealer’s site. The seller, in turn, refers to the lack of a title and the inability to issue cars to buyers. Dozens of victims talk about their claims on social networks, and some of them are ready to take extreme measures. As a result, the Russian office of BMW made an official explanation on Thursday, September 14.
The case of Muscovite Gleb Pimenov, who for two months could not pick up the paid BMW crossover, received great attention. “We paid for the car on July 25, the delivery date was August 15. The car is parked at the dealer, they swindled the money, but they didn’t buy the title from the importer BMW Rusland Trading,” explained Pimenov’s friend on Facebook.
As a result, a disgruntled car owner blocked the main entrance of the dealership with his pickup truck. “Friends demand immediate redemption of the car and guard their new car in the parking lot so that it does not get taken away. Today the dealer simply didn’t open,” wrote Pimenov’s associate. After a number of publications in the media, the dissatisfied client finally received his new car.
Another story with the same dealer almost ended in damage to expensive property. The dissatisfied client and the lawyer spent several hours in the salon, demanding the keys to the car and calling the police three times. Losing his temper, the client first surrounded several cars with wooden sticks, and then tried to get into the purchased car by breaking its glass, but was stopped by his friends. As a result, the management of the salon still issued the car, and with all the necessary documents.
The official representative of the Russian office of BMW, Vasily Melnikov, confirmed to the website correspondent that Independence indeed did not transfer the money to the importer. “At the moment, a situation has arisen where customers pay for cars, but we don’t see this money and therefore do not issue title cards. In fact, we did not receive any money. Now “Independence” does not fulfill the obligations that the company representing our brand should fulfill,” he explained.
Later, the Russian office issued an official statement in which it noted that negotiations are currently underway with the dealer to find a way out of the current situation, providing for various scenarios, “even the most drastic ones.”
Representatives of the BMW Independence dealership admit that there is a problem and say that the company is trying to find a way out. “We continue to attempt to engage in constructive dialogue with the BMW dealership in the interests of our customers. We are doing everything possible to provide customers with cars of this brand in the near future. Until today, cars were issued as planned according to the terms of the contract. We hope that in the near future, together with the importer, we will be able to offer customers a solution to the current situation,” Independence responded to the site’s request.
At the moment, says Melnikov from BMW, the shipment of new cars to the dealer has been stopped. Moreover, the importer has begun removing vehicles that were provided to the seller and is also considering options for removing customer vehicles to ensure their safety. “We do not recommend buying cars or having service work done at Independence and refer clients to other dealerships. We are looking into the issues that customers have and trying to minimize losses,” said a BMW representative.
However, the importer still cannot directly force the dealer to give customers already paid for cars, he says: “Legally, Independence has obligations to the clients from whom they received money and to whom they agreed to issue cars. This responsibility lies with the dealer. We are a third party, we ship the cars if we see that the payment has gone through.”
There is also no talk of deprivation of dealership yet, according to the BMW office: “This procedure at least lasts several weeks. Any dealership is protected from potential inappropriate actions of the representative office. In this case, this is another legal entity that we do not have the right to influence. We are currently considering options for what to do next.”
Independence has closed all its car dealerships: on Monday it became known that the company had ceased to be the official representative of the Audi and Volkswagen brands. They were the last ones to cooperate with the dealer. Before this, several other importers broke contracts with Independence. The company reported that it decided to cease operations because it could not agree with creditors on debt restructuring. The dealer worked in the market for 25 years, he had showrooms in Moscow, Yekaterinburg and Ufa.
The serious financial difficulties of Independence became known at the beginning of the year; its debts were estimated at 6 billion rubles. In September, several dozen customers of the dealer complained that they could not receive paid BMW cars. The German manufacturer prohibited the company from selling its cars, and gave the cars to deceived customers at its own expense. In October, a similar situation occurred with Volvo customers, and the brand deprived Independence of its dealer status. Later, Jaguar Land Rover, Mazda and Mitsubishi broke their contracts with the company. Ford and Peugeot plan to terminate their contracts by the end of the year.
In recent months, Nezavisimost has been negotiating with its main creditors - Sberbank and Gazprombank. A plan was discussed in which banks could become shareholders of the company. But on Monday it became known that Gazprombank filed bankruptcy claims against Independence structures for more than 2 billion rubles.
How will the closure of Independence affect its clients and the market as a whole? The dealer refused to disclose how many customers had already paid for cars and still had not received them. According to the company's administrative director Sergei Chadin, this is an insignificant number. He expressed the hope that all automakers will meet the dealer halfway and issue cars to customers at their own expense: “For some of the customers, a decision was made to find funds and terminate contracts; work is underway with the rest. In particular, for Audi it was a favorable decision; the importer supported us. We are really looking forward to Mazda, they are coordinating the position with the headquarters in Japan. We are working less favorably with Volvo, negotiations are still underway. “Volkswagen must resolve this issue with the help of importers.”
Muscovites will hardly feel the departure of Independence from the market. Cars of the brands that were presented at the dealer will still be available for purchase, noted Dmitry Chumakov, CEO of the marketing and sociological research agency Vector Market Research: “Most of Independence’s business is still concentrated around the Moscow region. There are quite a few dealership centers here for each car manufacturer. Yes, in terms of after-sales service, there will be worse representation in a certain region or area of the city; you will have to travel to neighboring areas. But, nevertheless, from the point of view of the representation of cars from various foreign manufacturers, including those included in the Independence portfolio, there will be no significant damage to car buyers.”
Competitors have already begun to look closely at the Independence salons. For example, Avilon has already become interested in the Belaya Dacha center, which sold BMW, Kommersant writes.
Volvo about a month ago switched with Independence to an advance payment scheme, but is receiving customer complaints about delays in car delivery, and Mazda customers are waiting for cars longer than the average for the brand’s dealer network, the companies told RNS. Earlier, BMW reported that Independence was violating the deadlines for transferring purchased cars to customers and, to ensure the safety of the cars, the company was removing them from the territory of the dealership center.
“Approximately since August, we have been working with the dealer on a prepayment basis, i.e. We ship the cars to him after receiving full payment for the cost of the car to Volvo Cars. We are aware of customer complaints regarding late delivery of vehicles by Independence. At the same time, we also know that many customers who contacted us with complaints received their cars with a delay,” the Volvo Cars press service told RNS.
“Unfortunately, delays do occur in isolated cases, but the company’s management is doing everything possible to prevent such incidents in the near future,” a representative of Independence told RNS.
Now Volvo has one dealership on Yaroslavskoye Shosse in Moscow. “In July, by decision of the Nezavisimost Group of Companies, Volvo Car dealership centers on Leningradskoye Shosse in Moscow and Yekaterinburg were closed,” the company said. The company is now negotiating with the dealer “on further steps to stabilize the situation with the delivery of cars to customers.”
Mazda customers wait longer than usual for cars, but customers agree to wait by signing agreements with the dealer, Marina Zanarevskaya, commercial director of Mazda Mtotr Rus, told RNS. “The average time for issuing cars to customers after signing a contract at the Mazda dealer - the Nezavisimost company - is longer than the average for the Mazda dealer network. However, this is initially reflected in contracts with clients, so the dealer is correct in fulfilling contractual obligations,” she said.
In July, one of the Independence centers on Leningradskoe Shosse in Moscow, where Volvo, Jaguar and Land Rover were present, was closed, as well as two centers in Yekaterinburg. The remaining Jaguar and Land Rover center is now operating, a representative of JLR's Russian office told RNS.
Now Independence, in addition to Jaguar, Land Rover, Volvo, Mazda, BMW, sells Audi and Volkswagen cars. The brands' press services did not respond to RNS's request. Independence also services Ford, Mitsubishi, and Peugeot cars.
“The management of the Independence group of companies regularly meets with representatives of importers, including a meeting with Volvo today. During this meeting, a plan for working together to normalize the situation was discussed. The company's activities continue, we are in constant communication with all participants in the process - importers, clients, partners. We issue cars every day and provide maintenance services,” said a representative of Independence.
As Kommersant has learned, competitors are beginning to dismantle the dealership centers of the troubled Nezavisimost Group of Companies: the Belaya Dacha center, which sold BMW, may be taken over by Avilon. BMW notes that they never received money from Independence for the cars they sold and give them to customers at their own expense. Other concerns, including Volvo, have had similar problems with dealers. At the same time, Gazprombank has already announced that it intends to bankrupt the problematic dealer.
The Avilon holding may take over the Belaya Dacha BMW dealership, which is now part of the Nezavisimost Group of Companies, industry sources told Kommersant. Avilon works mainly with premium and luxury brands; it already has BMW in its portfolio - a center on Volgogradsky Prospekt. Independence has two BMW dealerships. One of Kommersant’s interlocutors says that Independence rents the building of the center in Belaya Dacha. Another Kommersant source notes that we can talk about both renting and purchasing a legal entity along with the unresolved obligations of the previous owner. Another Kommersant source noted that there are no plans to hold a tender to select a new BMW dealer.
The Nezavisimost Group's portfolio includes Audi, VW, BMW, Jaguar, Land Rover, Volvo, Ford, Peugeot, Mitsubishi. Investment group A1 owns 49.95%, the rest belongs to Roman Tchaikovsky.
In mid-September, Vedomosti reported that Independence did not fulfill agreements with BMW, which led to the suspension of the dealer’s work with the brand. According to the automaker, the dealer violated the deadlines for transferring already paid cars to customers because he did not buy the title from the importer. Independence insisted that they intended to fulfill their obligations to customers, and also claimed that they continued to conduct a constructive dialogue with the BMW representative office. On Wednesday, Independence announced that the dealer and BMW have resumed issuing cars to customers, having resolved “all technical issues,” and customer service is contacting customers to agree on dates. A Kommersant source familiar with the situation notes that up to a hundred clients encountered the problem, about half with full payment. He did not rule out that the importer would file a claim against the dealer.
On Thursday, BMW did not comment on the situation with the center at Belaya Dacha, but stated that they actually issue cars to customers at the site themselves, taking the financial risks upon themselves. BMW never received money for the cars from Independence, and two weeks ago a notice of contract termination was sent (effective October 1). Cars are issued after payment verification; five cars were issued on Wednesday. Independence told Kommersant that they were considering the possibility of terminating the contract with BMW due to “the constant unprofitability of the sale of brand cars and the lack of prospects.” Avilon did not comment on the situation, but noted that BMW is a profitable business for the company, and emphasized the interest in cooperation with the brand.
However, it turned out that Independence also has conflicts with other suppliers. On Thursday, Volvo told Kommersant that the dealer is not able to order cars, information about it has been removed from the website, and the company does not recommend that customers contact Nezavisimost. Volvo retains the option for the dealer to receive vehicles upon full payment. “We set a condition for the dealer to issue all paid cars to customers as soon as possible or return the prepayment,” the company says. In the coming days, Volvo will decide on further cooperation with the dealer. Jaguar Land Rover “Kommersant” only noted that “Independence” is an official dealer, but currently does not sell cars. Mitsubishi (they work on 100% prepayment) and Ford Sollers did not encounter similar problems. Peugeot said that there had been no complaints from buyers regarding the delivery of cars by Independence, but added that the contract with the dealer expires at the end of the year, and the issue of its extension is under consideration. On Thursday, GPB published notices of intention to file claims in connection with the presence of signs of bankruptcy against the Nezavisimost Group of Companies.
The financial situation of Independence has remained difficult for several years. In February, it was announced that shareholders would further finance the company (the volumes were not specified) and would replace top management. In 2015, Nezavisimost restructured its debt to Gazprombank for 2.6 billion rubles. (as Kommersant wrote, the loan was extended at least until 2019). A1 noted that they are in the process of negotiations with banks and “it will be possible to talk about additional investments only after their completion.” Previously, Interfax sources claimed that A1 refused to finance the dealer and would not interfere with its bankruptcy if one of the counterparties initiates this process.
A few days ago, a scandal suddenly broke out around one of the BMW brand dealers, the Independence company. Dozens of customers who paid for their cars were unable to receive them, despite the fact that they were on site at an official dealer. The noise began to grow, and representatives of the Russian office of BMW issued an official statement, where they confirmed the fact that the dealer had financial problems and assured that they were taking measures to solve the problem.
The scale of the problem became clear after the story of Muscovite Gleb Pimenov, who had been trying to pick up a paid BMW crossover for two months, was posted on Facebook. After unsuccessful negotiations with the dealer, Pimenov blocked the main entrance of the dealership with his car and, together with friends, guarded his new car in the parking lot so that it would not be taken away. This case was published in a number of media outlets, thanks to which the client was finally given the car. But, as it turned out, the Muscovite was not alone in his problem. There was a case where one of the clients, who could not pick up his car from the dealer even with the help of a lawyer, out of despair almost began to destroy his purchase right in the parking lot, but his friends who were nearby stopped him in time. He finally received the car, but disaster almost happened.
The official representative of the Russian office of the BMW Group, Vasily Melnikov, said:
BMW Group Russia confirms that the Independence dealership encountered a number of complex problems that led to the dealer’s failure to fulfill agreements and the subsequent stoppage of its work. Because of this, the delivery deadlines for purchased cars to customers were violated. Currently, negotiations are underway with the dealer to find a way out of this situation, providing for various scenarios, including the most drastic ones.
In order to make a decision as quickly as possible, taking into account the interests of customers as much as possible, BMW Group Russia asks everyone who is faced with a delay in the transfer of a car to contact BMW customer support. In this case, you must have documents confirming the purchase and payment for the car.
Currently, simultaneously with the collection of information in order to ensure a sufficient level of safety for vehicles owned by BMW Group Russia, vehicles are being removed from the Independence DC. At the importer's warehouse, complete safety and security of cars is ensured: cars assigned to clients of the Independence Group will not be transferred to anyone until the final investigation in the current situation.
The essence of the situation is that, having received money for the car from the client, Independence did not transfer it to the BMW Group, as a result of which the cars physically arrived at the dealer’s site, but the importer did not hand over the title without payment. Apparently, the financial situation of the company (which is not yet known for certain) is not in the best way, as a result of which there are virtually no funds to buy back the cars.
At the same time, other dealer divisions of the Nezavisimost Group of Companies - Land Rover, Ford, Audi and others - do not experience such problems; dealership centers operate as normal, although the company itself is undergoing an optimization process, which is why several have closed over the past year centers of different brands. However, they fulfilled their obligations to clients in full.
“We do not recommend buying cars or having service work done at Independence and refer clients to other dealerships. We are dealing with issues that customers have and trying to minimize losses,” said a BMW representative.
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“We do not recommend buying cars or having service work done at Independence and refer clients to other dealerships. We are looking into the issues that customers have and trying to minimize losses,” said a BMW representative.
