Fleets across Europe may benefit from increased competition among car manufacturers and suppliers, as the European Commission considers abolishing the sector’s exemption from EU competition law.
The motor industry currently enjoys significant exemption benefits, which some argue gives carmakers unfair advantages.
For example, the auto industry has special rights to retain formal links between manufacturers, dealers and repairers that would be illegal if practiced by other industries.
Now that exemption – known as block exemption – is coming up for review.
In a report released last week by the European Commission on how the current block exemption has been working, it concluded that the partial liberalisation reforms that came into force in 2002 have failed to boost competition and consumer choice.
Now the commission is consulting with the transport industry about reforming the system again, indicating that this could “lead the commission to take the view that the motor vehicle sector may be adequately covered within a general regime on vertical restraints”.
If the commission continues to take this approach and ends the block exemption for the industry, formal links between manufacturers and dealers would end and, it hopes, more competition would follow.
This could mean more car supermarkets and brokers, easier international sourcing of models, more multi-marque dealerships and possibly more authorised service and repair centres.
The BVRLA welcomed the commission’s report, particularly its suggestion that fostering more competition is the way forward.
”There is a healthy level of competition in the motor industry at present, which has led to an unprecedented level of choice for vehicle buyers and improved the quality of after-sales service,” said its director general, John Lewis.
“The BVRLA agrees that simplifying some of the sector-specific regulation imposed by block exemption will not hamper this progress.”
However, while the association is in favour of removing much of the red-tape surrounding motor vehicle distribution, the BVRLA, which represents the leasing and rental industry, said it remains concerned about a recent move by some manufacturers to “dilute the end-user status of leasing companies” by insisting on the compulsory provision of customer details if a leasing company wants to gain access to fleet terms.
“We believe this type of direct supply agreement could reduce intra-brand competition,” said Mr Lewis.