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EC to reveal Block Exemption shake-up

The European Commission is likely to push for a more radical shake-up of Block Exemption than expected by the motor industry executives when it reveals proposals on January 30.

Initial reports suggest dealers will be given freedom to sell more than one marque from the same site, provided there is a degree of brand separation.

Manufacturers would still be allowed to select their dealers, but would not be able to limit their activities to one area. Dealers would be able to open showrooms and promote their services in different areas of the country, abolishing the existing territory-based retail structure.

The proposals, though, could lead to dealer consolidation, with larger groups acquiring smaller companies. This could spell an end to dealer representation in more rural areas, where volumes and profits can be lower, forcing customers to travel further to buy cars.

In a surprise move, the European Commission has warned that allowing supermarkets and internet retailers to sell cars could reduce consumer choice and lead to an increase in prices.

Its proposals are expected to state that manufacturers should be allowed to exclude online retailers and supermarkets from their dealer networks.

Analysts claim that supermarkets and high street brands would restrict their activities to higher volume cities and large towns.

The EC is also expected to scrap the requirement for dealers to provide servicing/repair facilities at the showroom.

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