Fleet News

Competition rules maintain choice for fleets

The fleet and vehicle leasing sector should be happy with the new rules on how the various elements of the European Union vehicle sector can compete.

This regulation granting a ‘block exemption’ from general EU laws on competition, which usually ban formal collusion between manufacturers, retailers, repairers and customers, should reduce prices of purchases and repairs, while protecting leasing companies from having to yield their customer databases.

Special auto industry rules will instead continue to apply and the revised regime will enter into force in two phases – on repairs from June 1, and on sales from May 2013.

Both should stay at least 10 years.

The repair rules are designed to ensure independent repairers and parts distributors can thrive.

They stress vehicle makers may not withhold technical information from the independent aftermarket sector.

The new rules also stop manufacturers preventing consumers having vehicles repaired with alternative parts.

Importantly, the new system, said Marc Greven, director for legal affairs of the Association of European Automobile Manufacturers (ACEA), gives “the Commission more room for enforcement of these rules”.

BVRLA head of communications Toby Poston said this was critical for leasing companies and fleets, especially as cars are becoming increasingly technical.

“You have mechanics saying they need to be a software engineer these days.

"You can see how vital it is. It is easy to be anti-competitive if you don’t share this information.”

But by ensuring this information flows, choice is preserved, said Poston.

“There’s a premium in vehicles being repaired and maintained with an official stamp, but sometimes you can get just as good a job by using your local independent,” he added.

Retail Motor Industry Federation director Sue Robinson said: “The new rules will encourage the existing trend by fleets to have vehicles repaired and serviced by the independent sector.

“It will encourage more independents to maintain newer cars as it gives them increased access to technical data while ensuring that manufacturers cannot nullify warranties, where vehicles are serviced and repaired outside the franchised sector.”

Purchasing costs may fall because of the second tranche of the review.

This includes a new stipulation allowing manufacturers to insist on single-brand showrooms at dealerships, rather than the multi-brand dealerships encouraged by the old block exemption regulation.

Car leasing companies are also happy with the revised regime because under the new sales system from 2013, they will continue to be regarded legally as an end-user, under new supplementary guidelines.

This is important, because the Commission had discussed making standard EU competition laws apply in this case, which would have meant the motorists leasing cars would have been considered end users, enabling automakers to demand leasing companies provide customer details as a condition of supply.

Carmakers could then pitch sales to these customers direct.

Jay Parmar, BVRLA head of legal services, said his organisation had successfully campaigned against this.

“The status quo has been maintained, which is crucial for our members and for the effective operation of competitive markets,” he said.

If vehicle makers had the right to demand leasers’ customer databases that would “distort the market”, he added. “It would be an unlevel playing field.”

Vincent Rupied, chairman of Leaseurope’s automotive steering group, said: “The new regime recognises the vital contribution of automotive leasing to a constantly evolving market.”

At a glance

  • New EU rules for the vehicle sector will prolong the fleets’ and leasing companies’ block exemption from standard EU competition regulations
  • These last 10 years – from this June for repairs and May 2013 for vehicle sales
  • Until May 2013, the current vehicle sales competition rules will apply
  • Independent repair shops will be able to demand technical information from manufacturers
  • Leasing companies cannot be forced to hand customer lists to auto suppliers
  • Rules promoting multi-brand dealerships to disappear – distribution costs should fall
  • Fleets can use non-authorised spare parts if they wish
  • Auto industry welcomes EC recognition that it is competitive

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