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MG Rover dealers left to carry warranty costs

MG Rover dealers are being left to shoulder the burden of customer warranty work, its administrators have announced this afternoon.

In a memo to the company’s dealer network PricewaterhouseCoopers tells dealers that MG Rover will no longer reimburse dealers for any warranty work done after "1.05pm on April 8", the time the administrators were appointed.

"Any warranties offered for vehicle sales after the appointment date will continue to be a matter for the dealer to consider subject to the fact that the Company will not be able to reimburse these costs. Hence, dealers and authorised repairers will need to make their own assessment in dealing with customers with respect to warranty," the PwC memo reads.

Historically MG Rover has reimbursed authorised repairers and dealers for the cost of valid warranty repair claims. Since the company went into administration MG Rover cannot honour this arrangement.

PwC’s position on sales incentives, rebates and re-earnables is the same.

"Again, the company is not in a position to meet these obligations and until further notice no incentive, rebates or re-earnables will be paid on sales after the appointment date."

Other obligations, such as AA Roadside Assistance packages, free service promotions, goodwill accounts and recall work reimbursement are being investigated by PwC.

"We acknowledge that these decisions leave dealers in a difficult position, but given the current financial position of MG Rover there is currently no other option. We will issue further communications to dealers in due course," PwC says.

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