Fleet News

RMI seeks block exemption extension

CAR dealers want regulations governing the distribution of cars in the UK and Europe to be extended for a further five years when the present agreement ends on September 30, 2002.

But the plea for a five-year agreement - thereby extending the existing Block Exemption Regulations for the motor industry across Europe - is likely to fall on deaf ears.

Both the British Government and, more importantly, the European Commission which introduced the existing Block Exemption in 1995 and subsequently renewed it for two years, want change.

Retail Motor Industry Federation president John Bond-Smith claimed the present 'selective and exclusive distribution system for the supply of new vehicles' was 'the best means of ensuring maximum benefits for customers'.

Responding to his speech Alan Johnson, Minister for Competitiveness at the Department of Trade and Industry, said the Block Exemption had been criticised by the Competition Commission in its New Cars Inquiry report and, as the basis of European law was 'clearly in need of change'.

'The EC has already indicated that the present system does not meet its objectives. That is an understatement and we are committed to change. Proposals from the European Commission will emerge next year. It does not allow for new avenues of sale such as the internet. We must adapt to the changes taking place.'

The ending of the Block Exemption threatens the biggest shake-up in car distribution in history and it comes as the motor industry still tries to come to terms with the Supply of New Cars Order published by the Government on September 1.

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