Fleet News

EC goes direct to fleets to explain block exemption

THE European Commission has bypassed car manufacturers and franchised dealers to explain its vision for car sales and servicing directly to fleets and private car buyers.

Last week the EC published a brochure on its new competition rules for car sales and servicing, known in the industry as the block exemption, to strengthen consumer expectations of the new system that came into effect on October 1.

The brochure 'is designed to provide the general public with information on their rights and obligations under the new, stricter arrangements which should result in greater competition in car sales and repairs,' said the EC. It pledged that the Competition Directorate would continue to monitor the motor vehicle sector to ensure the new block exemption rules are correctly applied, and said it anticipates greater 'competition, quality and choice in the maintenance sector'.

The new block exemption will give dealers greater freedom to open multi-brand showrooms, while independent repairers will be guaranteed access to technical information and training from manufacturers to allow them to compete with franchised garages.

The new rules come into play at a time when dealers are complaining about the way they are treated by manufacturers, according to a new survey by the Retail Motor Industry Federation.

The 2002 Dealer Attitude Survey shows dealer disenchantment both at the increase in manufacturer control and with the level of 'requirements and procedures placed on them by manufacturers'.

Alan Pulham, RMI franchised dealer director, said: 'Dealers feel the manufacturers are still not listening.'

The survey preceded the widespread termination of dealer franchises as manufacturers prepare new contracts that comply with the new block exemption rules.

However, DaimlerChrysler has finalised its UK dealer network following its controversial 'firing and hiring' franchise programme. Its new contracts, effective from October 2003, set out a clearly defined set of standards in preparation for changes to the block exemption, and will create a Mercedes-Benz passenger car network of 29 'partners', with a central retail point and 156 satellite servicing and sales centres.

All centres in London, Birmingham and Manchester are run by DaimlerChrysler UK Retail. Sister brands Chrysler and Jeep are represented by 57 dealers operating 93 outlets, while the Mercedes-Benz commercial vehicle network will total 104 centres.

The signing of the contracts means that the spectre of Mercedes-Benz cars sharing showroom space with any other marque has vanished.

Joachim Eberhardt, DaimlerChrysler UK managing director, said: 'The changes in regulations have led to a period of uncertainty and inconvenience for our customers, but we are confident that we and our retail partners will continue to be in the best possible position to work in a concerted effort to the benefit of all our customers.'

But Mercedes-Benz dealers that lost their franchises in the shake-up have claimed the move is anti-competitive and anti-consumerist.

  • For the EC's block exemption brochure click here.
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