Fleet News

EC announces reforms to block exemption

NEW rules announced today will, it is claimed, see greater price competition in the new car market across Europe and reduce dealers' commercial dependency on car manufacturers.

The European Commission has made public after months of deliberation and wrangling the new rules by which carmakers will be able to distribute, market, sell and maintain their products under the renewal of block exemption regulations.

Key elements to the new rules include:

  • giving retailers the opportunity to sell more than one car brand in a dealership. Carmakers can only demand that their cars are sold within a brand specific area of a site. The multi-brand showroom is designed to increase dealers' commercial independence
  • allowing dealers to advertise in other market areas and even abroad, with the freedom to send mail shots and personalised emails to consumers anywhere in the European Union
  • allowing dealers to sell to independent retailers within their exclusive territory and also to sell to consumers or retailers outside their territory. Dealers can also set up secondary sales outlets within a region, country or in another European state
  • dealers can choose whether to repair vehicles themselves or sub-contract the work to another authorised repairer. Carmakers must allow independent repairers access to all technical information, tools, equipment and training. Consumers also have a choice of which spare parts are used to repair their vehicle.

    The EU believes the new rules will lead to 'more competition between dealers, make cross-border purchases of new vehicles significantly easier and lead to greater price competition. Consumers will be better informed and it will be easier to compare cars and associated services offered by dealers'.

    The new regulation comes into force on October 1, 2002 with a one-year transition period. Changes to the 'location clause', intended to ease controls on where a distributor bases its outlets, have been deferred until 2005.

    To view a Q&A on the changes to block exemption click here.

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