Fleet News

Crunch block exemption report due

A CRUNCH decision on the future shape of the new car market comes a step closer on Monday with the publication of an EC report into block exemption. A 127-page report has been drafted by the EC and is widely expected to be critical of the system, which allows manufacturers to organise a network of tied dealerships for the distribution of vehicles.

Manufacturers claim that block exemption allows them to ensure high standards of service for motor vehicles that are becoming increasingly complicated to work on. However, consumer groups argue it simply blocks competition and allows price fixing.

The investigation is in preparation for a full review of block exemption in 2002 and could lead to the system being scrapped. Early indications are that the report is highly critical of block exemption and Mario Monti, EU competition commissioner, is said to be against the current organisation of dealers. As the industry braced itself for the report this week, the ACEA, Association des Constructeurs Européens d'Automobiles, the European equivalent of the Society of Motor Manufacturers and Traders, threw its weight behind block exemption. It said the system 'has worked well and represents the best option from the standpoints of competition policy, the consumer, the dealer and the manufacturer alike.'

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