Fleet News

European vote casts doubt over future of block exemption changes

MEMBERS of the European Parliament have voted to delay the introduction of elements of the new car distribution block exemption rules until 2005, and tabled a series of amendments to the proposed new regulation.

The non-binding vote casts doubt on the September 30, 2002 deadline for introducing new rules to govern the relationship between car manufacturers and their dealers within the European Union.

The European Commission has proposed major reforms to the current rules to enhance competition in the new car market and facilitate cross-border trade. The EC also wants to see keener competition in the service and maintenance aftersales market.

MEPs, however, want to delay until 2005 rules that would allow dealers to advertise outside their exclusive sales territories. However, EC competition commissioner Mario Monti said he would not accept this amendment.

The European Parliament also wants to ensure that if franchised dealers choose not to provide service facilities then they should only be permitted to subcontract this to garages that are close by. Furthermore, MEPs have called for two year termination notice periods for dealers, and for manufacturers to pay compensation to dealers who invest heavily in showrooms and workshop facilities, but then lose their franchise.

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