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'Carmakers have ignored letter of the law' - Maguire

"Many words have already been written about the likely changes to Block Exemption which are due to be published shortly. I do not intend to add to the speculation by attempting to second guess the European Commission.

But I do believe it is important the motor retail industry responds positively to any changes.

Like many of the challenges we face in business a new legal framework for our industry can present either an opportunity, or a threat. At Lookers we intend to seize the opportunity.

If there is a threat, it is to those in the industry who don't have their house in order.

There has been plenty of warning and it is there for all of us to see. Motor retailers who don't meet customer demands will have no future.

The European Commission is consumer focused – and will do what it believes to be right in the long term interests of the consumer.

A free-for-all would not benefit the consumer so I believe some form of legal framework will, and must, survive. Indeed, I would argue that if the present Block Exemption was policed properly there would be little need to change it. Unfortunately some carmakers have not only ignored the spirit, but also the letter of the law, creating much of the current pressure for change.

As a result, the manufacturers' grip on the franchised dealer network must come under scrutiny.

While certain minimum standards should apply it is not right that a manufacturer can not only tell me what type of showroom to build, but also precisely where to buy my materials (even down to floor tiles) – pushing up costs for me and my customers. Dealers need more freedom to manage their business.

The level of investment required to really get involved in manufacturer representation means five-year agreements are a necessity.

At the same time, there should be greater protection for manufacturers through a longer 'closure clause'.

Dealers cannot be asking for five years on one side, and look for six months on the other.

There has been strong pressure for the link between sales and service to be broken, opening up the market to independent repairers.

The independents will have to invest and may specialise in particular brands, while groups such as Lookers will be free to carry out fast fit and warranty work on a wide range of makes – even those we do not sell.

Any changes to the rules must avoid unfair competition. New entrants to the market should not be allowed to cherry-pick popular models, selling them quickly and cheaply without stocking a full range.

Franchised dealers would have to be treated in the same way and customer choice would be restricted.

In the future, customers will have a choice. Lookers has invested heavily in staff training and development, both in sales and aftersales.

We have a sophisticated and rapidly expanding Customer Management Centre to ensure our customers receive the best possible service.

We have already seized the opportunity. Those who put their house in order now will flourish because they will have earned their customers' respect and loyalty."



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