Fleet News

Fleets to feel effects of block exemption change

FLEETS will finally start to feel the full effects of changes to the way new cars are distributed and serviced later in the year, experts predict.

The lower costs and wider choice under revisions to the car distribution block exemption, which aims to bring a free market of servicing and repair, have yet to be seen to any great degree. The changes officially came into force in October 2003 but it is not until October this year that car dealers can open subsidiaries within any territory in the EU.

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

This potentially could mean fleets being able to ‘shop around’ for savings, in areas such as servicing.

DTI Secretary of State Patricia Hewitt was asked what effect the changes to block exemption had had on the UK new car retail market and on car repair and servicing.

In a written Parliamentary answer, DTI Parliamentary under-secretary Gerry Sutcliffe replied: ‘Since the introduction of the Commission regulation, the UK new car retail market remains the same in terms of how and by whom new cars are supplied to consumers.’

He added: ‘The full effects of these new freedoms will not be felt before October 2005, the date when car dealers can set up subsidiaries and warehouses within any territory within the EU.

‘The new freedoms will take a considerable time to work through.’

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