New motor vehicle block exemption rules: Good for independent repairers but possible problems for car dealers
Posted, June 01, 2010 @ 00:00
New motor vehicle block exemption rules: Good for independent repairers but possible problems for car dealers
Brussels, 1st June 2010 -- A new 'Block Exemption regulation' for the motor vehicle industry - which comes into force today - offers greater choice in the after sales repair and servicing market. However, further changes proposed for the primary sales market will shift power away from local dealers, many of whom are small businesses, Malcolm Harbour MEP, European Conservatives and Reformists chairman of the European Parliament's internal market committee, warned today.
A Block Exemption Regulation effectively replaces standard competition rules across a specific sector. The new rules mean that car manufacturers will be required to supply independent repair shops with parts and technical information, and manufacturer warranties will not carry stipulations that restrict their choice in servicing and repairing their vehicles, meeting many of the concerns of the Right to Repair Campaign (R2RC).
However, the European Commission also intends to lift the Block Exemption entirely on the primary sales market which Mr Harbour says may see local independent retailers pushed aside as manufacturers reorganise their distribution systems. The lack of a sector specific regulation and the application of a one-size-fits-all regulation does not sufficiently protect local dealers - many of whom are small and medium-sized businesses . They will no longer be guaranteed technical information that enables them to meet customer needs. The commission's replacement non-legislative guidelines will not provide protection for dealers. Mr Harbour has also urged the Commission to make the new rules future proof, to ensure that independent repairers will be guaranteed access to the appropriate repair information for new generation green vehicles.
Mr Harbour has called on the commission to use the pending three year transitional period for the new exemption as a review period so that they can conduct a thorough reassessment of the rules to protect independent dealers and consumers.
He said:
"The new Block Exemption contains some positive elements which are welcome, yet the commission has failed to take a holistic approach to the whole motor industry. The new rules for after sales care will increase choice for consumers and allow independent garages to compete. Yet, in the primary sales market the commission has gone in the opposite direction, handing power over to manufacturers and reducing choice for consumers.
"The commission has treated the sales market and the after sales market as mutually exclusive, whereas the viability of many smaller independent dealers is their ability to both sell cars and to service or repair them.
"The commission's proposal was based on an economic assessment started in 2003 so no account has been taken on the impact of the economic crisis on the automotive sector. They need to take some time to review these proposals based on up-to-date information and then reassess whether the exemption should be reviewed.
"The commission has failed to provide the clarity and safeguards that independent dealers and repairers need, and which will provide consumers with greater choice."