The European Commission is in the process of reviewing the block exemption, the selective and exclusive distribution system for manufacturers that has been attacked as uncompetitive and could lead to sales and servicing operations being split up, leaving a potential gap in the market for fast-fit players. Ford has already moved by buying Kwik-Fit and several manufacturers now own a range of fast-fit businesses and dealerships, which they can continue to control even if block exemption is removed in 2002.
General Motors insisted the issue was only part of the equation behind its investment and that the real driver behind the deal had been to find fresh areas of profit for the firm. Its new company - which will start trading in March - will be headed by former FTM Tyrefit managing director Dominic Bateson, who left the firm after its owner Montinex was sold to Kwik-Fit. It will target the fleet tyre market through a network of between 500 and 750 independent suppliers, with services also including exhausts and batteries but not servicing.
General Motors insists the move will not affect Vauxhall's national network of MasterFit centres, claiming the new venture will run as an entirely separate operation.