AM Online

EC 'ready to experiment' from 2002

International Car Distribution Programme director Andrew Tongue says the new Block Exemption regulation would be “less prescriptive and more open to experimentation”.

Mr Tongue, who chaired the AM autumn conference, 'Beyond Block Exemption', thought a revolution in car retailing was unlikely as a result. “There isn't a category killer method of selling cars,” he said. “It is a low-cost system, and results are mixed. Those who succeed have the clearest view of their customers and what they want.”

There were misconceptions about the review. “It won't be scrapped – a regulatory vacuum is legally and ethically not an option,” he said. “Nor will it be renewed as it is.” An Arthur Andersen study on the economic implications of various options was with EC Competition Commissioner Mario Monti. It would be published (probably with EC recommendations) by the end of the year, followed by more consultations.

Mr Tongue said the EC's baseline position was: l There are serious deficiencies in the current system. l Objectives written into the 1995 renewal of the system have not been met.

  • There is growing evidence of transgressions by manufacturers, with a number fined and more under investigation.
  • The current regulation is not adapted to meet the future needs of the sector.

    The EC was almost certain to scrap dealers' rights to sell a manufacturer brand exclusively in a territory. The way manufacturers bundled sales and service channels was “also a major preoccupation with the competition regulators”, he said.

    This effectively disbarred internet sales channels, and possibly other agents, from entering the sales channel because of a lack of service facilities. (October 9, 2001)

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