Fleet News

EC chief hints at change to block exemption

THE Competition Commission's New Cars Inquiry report is set to play a major role in the European Commission's review of the block exemption, which was severely criticised by Europe's competition chief this week.

Mario Monti, EC Competition Commissioner, referred repeatedly to the UK report in a conference in Brussels that addressed the current selective and exclusive car distribution arrangements in the European Union.

He also said that his department had received 20,000 protest notes signed by British car buyers who feel 'they are being ripped off'. His speech was the clearest indication to date that the EC does not intend to renew the block exemption in its current form, when it expires at the end of September 2001. In a stinging review of the current block exemption, Monti questioned three assumptions on which it was based: that there is effective competition in the motor industry, that car dealers must provide after sales service and that franchised dealers are required to repair vehicles.

'A recent test case for the functioning of the internal car market is the UK,' said Monti. 'Prices for domestic buyers are very high in this member state if converted into Euros, compared to other markets with similar car taxes.' He conceded that currency fluctuations and the additional cost of manufacturing right-hand drive cars may be partly to blame, but attacked car importers for profiteering. 'UK prices could only rise to these actual levels because non-British manufacturers do not decrease their UK prices,' said Monti.

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