Replace ‘lemon’ Audi, DTI orders car dealer

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Replace ‘lemon’ Audi, DTI orders car dealer
In a test case, the DTI orders a car dealer to replace a luxury car bought by a complainant – or reimburse him

MANILA, Philippines – It’s a test case closely watched by the automotive industry. Now the Department of Trade and Industry (DTI) ruled that a complainant be given replacement for the defective luxury Audi 6 3.0 TD he had bought – or be reimbursed.

In a decision dated March 2, 2015 and penned by adjudication officer Ronald Calderon, the DTI found Audi Motorcars Incorporated and PGA Cars Incorporated (the local distributor of the German luxury automobile in the country) “jointly liable for the imperfections” of an Audi 6 3.0 TD, which was bought in May 2014 by Ricardo L. Nolasco Jr.

Audi/PGA should replace the “lemon” Audi with a similar one “in a perfect state of use or reimburse the amount paid, with monetary updating,” the decision said.

Due to multiple repairs, Nolasco returned the car to the dealership shortly after he bought it.

The car was brought for repair on June 17 due to a malfunctioning CD player. Airbag lights were also not working. The unit was returned two more times to PGA/Audi based on other complaints, including steering and suspension fault.

In September, Nolasco filed his complaint based on Republic Act No. 10642 or the Philippine Lemon Law, that strengthened consumer protection in the purchase of brand-new vehicles. He also cited the 1992 Consumer Act of the Philippines in his complaint.

This is the first case decided since the implementation of the Philippine Lemon Law.


This is not the first time that DTI decided on an issue under the Consumer Act, as most complaints are resolved at the mediation level.

But this Audi case went to adjudication, DTI Undersecretary Victorio Mario Dimagiba said.

Dimagiba clarified though that DTI did not use as legal basis the Philippine Lemon Law since the vehicle was bought in May, and the law was enacted in August 2014.

Thus, the Consumer Act was used as the legal basis, citing Article 100, “if the imperfection is not corrected within 30 days, the consumer may alternatively demand the options provided.”

“The net decision is favorable to the complainant,” Dimagiba said.

PGA previously said that the issues cited by Nolasco were “minor” ones that they immediately addressed, and stressed that the distributor is not selling a sub-standard car.

It was also reported that PGA wrote a legal motion requesting DTI to test the road worthiness of the disputed Audi, which was denied by Calderon.

PGA Cars is owned by Robert Coyiuto, Jr, who ranks 1054th in Forbes 2015 Billionaires’ list. The company  also distributes Lamborghini, Porsche, and most recently, Bentley. PGA opened its first motorcycle outlet in 2013. –

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