Fleet News

Rental and leasing firms want distribution system scrapped

CONTRACT hire, fleet management and rental companies want the freedom to buy vehicles direct from manufacturers and a variety of 'independent sources' as they call for the block exemption to be scrapped. The British Vehicle Rental and Leasing Association, which represents the bulk of the industry, made the demand as a response to the European Commission's evaluation report into block exemption, the selective and exclusive distribution system for new cars.

However, if the current dealer system was abandoned, the BVRLA said there must be assurances that drivers could be sure of high standards of servicing from new outlets. But the Retail Motor Industry Federation disagreed, saying: 'There should be some form of exemption from the normal rules for vehicle sales and distribution, mainly because of the specialist nature of the product.'

The present system, which expires in September next year, is being reviewed, with many pundits expecting the car industry to lose the battle to keep the system, which critics argue allows manufacturers to keep car prices artificially high. In a submission to the EC, the BVRLA, which has 778 members of widely differing sizes, who operate a combined fleet of 2.1 million cars, vans and trucks, said: 'Our members represent the biggest volume of purchases by any fleet sector. The BVRLA believes that a move away from the current system of distribution would benefit all participants in the distribution chain.

'A lean distribution system, led by the end-user, would result in less flooding of the car parc and would create a more competitive market for new cars, enabling new methods of distribution to have greater influence away from the traditional model of car distribution.' The association dismissed suggestions by the EC that the internet could be an additional method of distribution.

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