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The two main retailers are set to merge, after the former had been rocked by a wave of allegations of predatory pricing practices.
The move will see them merge with the third-largest domestic retail chain, as it prepares to take over the largest retailer in India’s retail industry.
It comes as the country’s two largest retailers, the costco and the cox, have been rocked to a halt by allegations of a culture of abuse.
A new partnership between the two has been announced as well, but there are also concerns over the future of the Indian retail industry, as the two major players are embroiled in disputes with consumers over their pricing practices and how they are managed.
In the last six months alone, the two retailers have faced allegations of unfair and discriminatory practices against customers, including charges that they unfairly charge for certain items and services.
While it is not clear if the new partnership will be able to address these issues, the two companies are set for a major shake-up after two of the largest retailers were pulled into the government’s anti-price-fixing scheme in May.
According to a government statement, the government is considering options to help both companies resolve the issues and will consider further steps to address the problems, including a possible merger or sale.
The company will be run by the Indian Retail Consortium (IRCC) and the government will provide a “sustainable, cost-effective” solution for the future, according to the statement.
The statement also revealed that the government would work closely with the company on how to transition from a market-driven model to a “community-based model”.
The IRCC has been working to address its issues with the two giants for a number of years now.
It is said to be the largest consumer protection agency in India and is part of a larger coalition of consumer groups to push the government to take more aggressive action to tackle unfair pricing.
At the end of last year, it had been forced to withdraw from the anti-fixation scheme after being accused of misleading consumers by suggesting that the prices were cheaper than they actually were.
The move had been criticised by some, including the country ‘s largest consumer group, the Consumers Federation of India (CFFI), who said that the move would leave the retailers with a “vacuum of options” if they did not take action.
In October, a group of consumer advocates, including consumer groups like Consumer Watchdog, launched a petition against the merger, calling for the government “to take all steps necessary” to address consumer concerns about unfair pricing practices in the country.
With the merger announced on Tuesday, the corporate governance body, the Ministry of Corporate Affairs, has also given the green light for the merger to go ahead, while the government said it would work to “sustainably” integrate the two companies into the new structure.
The deal is expected to be completed in the first quarter of 2019, the Times of Indian reports.