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Consumers give massive boost to Block Exemption

The findings of a recent opinion survey carried out by market research company Taylor Nelson Sofres (TNS) for Peugeot-Citroën and Renault suggest that the majority of European are satisfied with the current franchised dealership system for motor vehicles.

The survey comes as the European Commission is reviewing the rules for operating these franchised dealership systems - Block Exemption Regulation 1475/95. The regulation, which is due to expire in September 2002, exempts from normal competition rules the motor car distribution and servicing agreements that underpin the franchised dealership systems in EU member states.

The Commission will be holding a hearing on the future of block exemption on 12 February.

The TNS survey, which was carried out in the five main European markets (Germany, France, UK, ITALY and Spain), shows that 83 per cent of consumers thought that the current system was best suited to the demands of the car market.

96 per cent of respondents regard it as important that manufacturers select their dealerships and garages carefully as consumers strongly value the link between sales and after-sales services offered by franchised dealerships.

Competition between the carmakers and between dealers is regarded as being strong - both on industrial as well as distribution levels.

Differentials between retail prices for new cars are most strongly felt by British consumers, but only 20 per cent of European consumers found them abnormal or unjustified.

Most interviewees therefore seem to prefer improvements to the current European motor distribution system rather than a wholesale change. Other distribution channels like multi-brand dealers, independent chains or the internet were named as better alternatives by only a minority.

The reasons most quoted were the price advantage and better comparison between models that these channels were seen to offer.

A summary of the TNS survey is available at www.sofres.com/compress.

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