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Surprise as Byers reveals draft order on car pricing

Plans by the Government to make it easier for dealers to buy cars from their counterparts in continental Europe caught senior motor industry executives off-guard.

Automotive Management has learnt the relevant clauses in the draft Order published by Trade Secretary Stephen Byers were revealed by Government officials at a meeting only three days earlier.

One insider complained: “It came as something of a surprise. This was a new idea which had not been highlighted by the Competition Commission and was not mentioned by Stephen Byers in his original response to the report or at any other meetings.”

The new clauses will make it unlawful for any carmaker to discriminate against a dealer who imports cars from continental Europe and then resells them.

More controversially, they also force carmakers to include imported and resold new cars in sales targets and bonus payments.

Industry legal experts say the clauses have been loosely drafted and are likely to cause confusion. Carmakers say bonuses could be paid twice, once to the continental supplying dealer and once to the UK dealer; there is no guidance on which warranty would apply; and manufacturer captive finance houses could be forced to provide subsidised finance for cars which have been bought at continental wholesale prices.

The issue of whether such cars would be recorded by the DVLA as imports or UK supplied is also unclear.

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