The European Commission has adopted an evaluation report into
block exemption regulation (BER) in the motor distribution and
repair sector, which found that the “conditions for competition [in
new car sales, and repair and maintenance] have improved in recent
years,” the Commission said.
BER was originally introduced in 2002, as a “safe harbour for
car and commercial vehicle distribution and servicing agreements,”
in response to certain of the vehicle distribution and repair
sector’s unique characteristics, which the Commission felt required
a “narrow block exemption with detailed rules”.
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However, while the latest evaluation report found that
competition in new car sales has intensified, this was said to be
as a result of “factors other than [BER], such as manufacturing
over-capacity, technological innovation and closer integration of
markets.”
In the repair sector, meanwhile, BER was found to have had an
effect, as Commission enforcement of the rules has given
independent repairers greater access to manufacturers’ technical
information, while the number of authorised repair outlets has
grown.
In conclusion, the report found that “the general framework of
the block exemption has had positive effects overall,” but that
some provisions – such as allowing dealers to run showrooms without
repair shops – were “unnecessary”, while some were even described
as “counter-productive”. “[Over]-prescriptive rules in areas such
as multi-brand vehicle sales and the opening of additional sales
outlets may have encouraged the introduction of more onerous
dealership standards, thereby making distribution more expensive,
to the detriment of consumers,” the Commission stated.
Competition can be encouraged “if less complex rules were to
apply to the sector”, the Commission said, with the “form and
content of the future regime” to be decided upon in the review
process’s next stage, which will ultimately shape the regime to
follow BER when the current regulations expire on May 31 2010.
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By GlobalDataThe Society of Motor Manufacturers and Traders (SMMT) said it
welcomed the Commission’s proposals on BER.
“The current regulation has contributed to positive consumer
benefits through healthy competition in all areas of the industry,
and the report suggests that the same results can be achieved by
using the general [regime on vertical restraints].
“The sector-specific rules contain complex and unattractive
options that simply are not used by businesses. The new EU
Type-Approval legislation makes certain aspects, such as access to
technical information for new cars, redundant,” the SMMT said.
Its chief executive Paul Everitt commented: “The motor industry
has come a long way since Block Exemption was first adopted and we
welcome the Commission’s desire to now simplify the
regulation,” adding that the SMMT was in discussions with the
Office of Fair Trading and the Department for Business Enterprise
and Regulatory Reform about the proposals.
The Commission’s report and press release can be found
here.
Motor Finance Issue: 44 – June 08
Published for the web: May 29 08 14:51
Last Updated: June 11 08 11:21
