Fleet News

Dealers remain 'vital link' in vehicle supply chain

THE dealership network should remain a vital link between manufacturers and consumers in future, despite a major European review of the dealership system that could change the shape of the industry forever. David Evans, chief executive of the Retail Motor Industry Federation, claims that many of the issues raised by the EU in its examination of block exemption, the system that allows the current dealership network to exist, did not find a problem with the dealer system itself.

Block exemption is the selective and exclusive distribution system that allows manufacturers to appoint their own dealerships, set standards and create territories. Evans said: 'The current system works for the benefit of consumers, dealers, independent repairers and manufacturers. It is better to improve what we have rather than risk the unknown. Shortcomings in the present regulation could be corrected, although effective monitoring and enforcement is needed.'

He argued that the current system allowed for qualitative selection of dealers, keeping sales and service together, territorial exclusivity and less economic dependence of dealers on manufacturers. He added: 'The system offers comprehensive product and service promoting brand image and ensuring warranty and vehicle recall arrangements. You cannot be sure an independent supplier will have the correct equipment to service your car, but you can be sure a franchised dealer has.'

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