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Carmakers warned about parts pricing

Carmakers' parts pricing policies could be subject to action under competition law, according to senior Office of Fair Trading official Stephan Pukas.

He told the Sewells Information and Research conference there was no question of a cartel on new car sales because no manufacturer held a dominant share of the UK market.

“There may be dominance from manufacturers in respect of spare parts,” said Dr Pukas. He warned that competition authorities could investigate manufacturers' practice of bundling free credit and target bonuses into their pricing of parts to dealers.

This practice could be caught by competition legislation because manufacturers might be seen as holding a dominant position in the supply of parts to their networks.

Dr Pukas said this territory was covered by the new Competition Act. Under the terms of the tougher legislation, manufacturers could be held to have a dominant position and therefore be caught by the competition law.

He said that merely holding a dominant position was not an abuse of the market in the UK because of the spread of new car sales.

Dr Pukas said Volvo had already been deemed, under EC law, to be dominant in the supply of spare parts. “Where EC legislation covers an issue, that takes precedence because of its supremacy,” he said.

“Where EC law does not cover the ground such as in a direct regulation then the UK is open to address any anti-competitive practices.”

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