Amid the SMMT's gloomy predictions concerning Block Exemption, it is time the industry thought about this from the viewpoint of the consumer rather than solely protecting its own interests. The consumer should expect and indeed receive a genuine free market with normal retail channel choices.
The statement issued by the SMMT in July painted a picture of apocalyptic proportions, warning consumer bodies to brace themselves for floods of complaints, following the dismantling of Block Exemption.
Lurking in the SMMT's crystal ball are dismal stories of a free-for-all market place, leaving room for unregulated websites and car supermarkets, plus horror stories of lost deposits and the sale of non-UK specification cars. This is not how it has to be.
Virgin Cars was launched more than year ago, armed with the philosophy of offering a better deal, great service and more convenience for new car buyers. We have saved customers more than £9m and believe we can still do better.
However, regulations set by the European Commission mean we can source new cars only through dealer networks, not directly from manufacturers, which increases our costs. If restrictions were lifted we could source new cars from manufacturers and UK consumers could benefit from improved efficiency and more competitive prices.
The debate on Block Exemption has become intertwined with the Consumers' Association 'Rip-off Britain' campaign but they are different issues. British car buyers are forced to pay inflated prices as UK manufacturers seek to protect the higher margin opportunity created through differential pricing and different vehicle specifications.
These pricing irregularities are independent of any differences caused by the Government's taxation strategies but are exaggerated by them. Virgin Cars would like an opportunity to retail all makes of cars in a single showroom environment, sourced directly from vehicle manufacturers.
Virgin Cars agrees with the SMMT's concerns of a free-for-all – this scenario would not be good for either the industry or the consumer. Legislation is needed to enable good operators and consumer focused businesses to work on, creating more competition and offer consumers competitive prices.
Tales of car buyers being misled into buying non-UK specification cars and losing deposits, along with misleading prices and poor customer service, are caused by opportunists running businesses without consumers' interests in mind. This highlights the need for car buyers to deal with a familiar, trust-worthy brand with a reputation for customer focus and that can be a traditional dealer, a car supermarket or a new car retailer.
An internet-based new car retailer can operate successfully outside the restrictive frameworks of Block Exemption, whilst providing an outstanding aftersales service. We appreciate the importance of working with franchised dealers, in order to give our customers aftersales technical support.
Relaxing Block Exemption could be the turning point in addressing the war cry of 'Rip-off Britain' – the industry needs to sit up and take note of the disillusioned British car buyer and the success of Virgin Cars is testament to this. The automotive industry should be making positive advances in taking legislation into the next century, with a move to encourage growth and competition in the new car market and increasing consumer choice in where they go to buy cars.
Following a successful first year, Virgin Cars has great hopes for the future, but we recognise that the most important step for the consumer is a call for change in the current legislation. Forget the scary stories and focus on the prospect of an industry lead by forward-thinking regulations, welcoming a well managed, consumer-focused business.