Fleet News

Ford boss hits back at Byers' new car pricing orders

THE boss of Britain's biggest fleet supplier has savaged the Government for making fleets the scapegoats in the row over car pricing. In a hard-hitting attack, Ian McAllister, chairman and managing director of Ford of Britain, warned that fleet discount structures could end up being decided by the courts under an order released in Trade and Industry Secretary Stephen Byers' response to the Competition Commission's New Cars Inquiry.

 

The Government document, entitled 'The supply of new cars order 2000' states that it will be illegal for a supplier to discriminate between fleet customers and dealers which buy stocks of cars outright.

While the draft Government order does not specifically attack fleet discounts, its confusing design and uncertain aims could lead to fleets paying more, according to McAllister, who lambasted the order as confused and imprecise.

He said: 'The concern is that some words can be interpreted differently, particularly once you bring the law into it. The Government has said that fleet discounts will fall and smaller dealerships will go out of business. They know that will happen. Big dealerships will dominate the market place and net fleet prices will rise, but that is what the Government expects.

'It will unravel the dealer network and we could see five or six PLCs dominating the dealership market. The tragedy is that the Competition Commission never attempted to say what the market should be like, they just said what it should not be like. They then said the market would provide the answer.'

He said: 'We just want this behind us, so we can get on with selling motor cars, but because the order is so imprecise and confused, the courts will have to decide its meaning. If a dealer complains, the OFT will ask the manufacturer to explain itself and if the OFT does not like the answer, it will go to judicial review. That is not a way to run a business.'

Other leading manufacturers are 'confused and bewildered' by the new directive, with Vauxhall claiming that Byers is introducing new measures - such as those intended to prevent suppliers from deterring dealer imports of cars from other European Union states - which were not mentioned in the original report.

Vauxhall's executive director of sales, marketing and customer care, Ian Coomber, in a letter to dealers said: 'Vauxhall is concerned that additional provisions, which were not recommended by the Competition Commission report, are being introduced at this late stage.'

According to Volkswagen UK's head of fleet Vince Kinner, the German car maker's legal department has highlighted a number of areas which are either unclear or ambiguous: 'Until those areas are clarified it is going to be difficult to respond,' he said. 'One area in particular is confusing, and that is whether manufacturers are obliged to declare absolute or average fleet discounts. It's just not clear.'

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