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Dealers urged to maintain pressure over contracts

Carmakers and their dealer networks might be able to set up joint arrangements for self-regulation on such important issues as termination notices under revised Block Exemption, said Malcolm Harbour MEP.

In a live link from an EC studio in Strasbourg to the AM autumn conference, 'Beyond Block Exemption', the former automotive consultant said officials considering the changes were still interested in hearing from industry experts.

Conference chairman Andrew Tongue urged delegates to keep pressing for the changes they wanted.

Pendragon boss Trevor Finn, also a speaker, pressed the EC to introduce a rolling five-year contract. Franchised car retailers want longer contracts because of investment demanded by manufacturers.

Mr Harbour, who sits on an influential EC industry committee, encouraged dealers to continue to lobby. He said: “The name of the game is to encourage maximum competition and consumer choice, and to be against intervening in the market. The Commission wants a more permissive regulation. For example, the current sales/service tie-in may continue but will not be enforced.”

The policy review team had not been involved in either of the previous reviews and were genuinely open to and interested in a range of views, he said. Dealers could back the comprehensive recommendations put forward by Cecra, the European federation of dealer associations.

Manufacturers, through their European organisation Acea, and the Japanese manufacturers (Jama) were “not in agreement”. Acea wanted the regulation largely retained, while Jama hopes to see it scrapped.

But, he noted, consumer groups no longer wanted to see the regulation scrapped – instead they hoped to see improvements to help buyers.

Mr Harbour confirmed that with competition policy being the responsibility of the EC, the Commission would decide what the new regulation would be. There would though be debate with and possible opposition from the employment, environment and transport directorates.

He said the Commission felt it wanted to be seen to be responding to strong consumer interests. “The detail will be important,” said Mr Harbour. “So will the ability of manufacturers to restrict the number of dealers in their networks.”

The EC was interested in the stance adopted by the UK in respect of volume discounts for retail buyers.

Mr Harbour warned other countries were less politically sensitised to pricing than in the UK. Colleagues in other countries were more concerned about employment issues while he thought British MEPs were more sharply focused on the price issue.

MEPs from France, Germany and Italy were concerned about jobs issues, especially among small and medium-sized businesses, and it was the economic impact of various proposals for change that had been examined by Arthur Anderson.

Other commissioners also had an interest in the Block Exemption review, including those looking at environment and green issues, transport and the end of life directive, so there would be wrangling among commissioners over its final form, said Mr Harbour.

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