Fleet News

Manufacturers boycott Competition Commission hearing on new cars

LEADING fleet manufacturers boycotted en masse the Competition Commission's open hearing in its new cars enquiry, spurning the chance to defend the company car in public in the face of fierce criticism. With fleet and small businesses accounting for about 75% of all new car sales in the UK, inquiry chairman Denise Kingsmill regretted their absence.

She said: 'In stark contrast to the very good response from other parties we are sorry to say that very few car companies have accepted our invitation to attend.' Among industry chiefs spotted at Tuesday's first open hearing in London only Tim Tozer, managing director of Mazda Cars UK, appeared to be present which left the fleet case to be defended by the Association of Car Fleet Operators. It had to respond to strong allegations from the Retail Motor Industry Federation that the fleet sector completely distorts the UK market.

Alan Pulham, director of the RMI's National Franchised Dealers' Association, said: 'Fleets have managed to demand enormous discounts of up to 35%. These discounts have to be paid for and it has regularly been our contention that retail customers have been prejudiced through cross subsidy. The fleet industry has driven higher specification and higher discounts at the expense of retail customers and dealers.'

But ACFO director Stewart Whyte said: 'There is no business in the world where volume buyers are not rewarded with discounts. But discounts of 30%-plus are to do with clearing inventories and there is no way of achieving them on an on-going basis.' He also highlighted the responsibility of fleet managers to strike the best deals, not only on acquisition costs but wholelife costs.

The manufacturers left it to their representative body, The Society of Motor Manufacturers and Traders, to speak on their behalf at the all-day hearing. Deputy chief executive Roger King said: 'Government statistics confirm that the price of new cars in the UK is falling. Motor manufacturers support the moves towards greater price harmonisation, but this requires governments to pursue tax harmonisation and exchange rate stability with greater enthusiasm.'

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