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Carmakers protest as EC opens up market

Manufacturers were this week stung into making a fierce attack on EC proposals to reshape motor retailing throughout Europe.

Jean-Martin Folz, president of Acea, the European car manufacturers' trade body, said changes to Block Exemption rules which “have protected the industry from normal competition law for 20 years” would increase competition but fail to reduce car prices.

The PSA Peugeot/Citroen group chairman added: “Too radical a reform would have the opposite effects for the consumer and society as it would break the link of responsibility between manufacturer, dealer and customer.”

Mr Folz said Acea was against the EC's proposal to scrap rules that allowed manufacturers to limit dealers' activities to specific geographic areas. He said the proposal would hit smaller dealers which did not have the resources to expand geographically.

EC plans to remove the obligation on dealers to provide repair services – and to allow sales of more than one brand in the same showroom – were also attacked by Mr Folz.

RMI chief executive David Evans has broadly welcomed the EC proposals. He is a former president of Cecra, the European dealer and repairer organisation.

Changes to car distribution and retailing under new Block Exemption are likely to have a more dramatic effect on dealers in mainland Europe than in the UK where there has been significant consolidation. Jurgen Creutzig, president of Cecra, said: “If the proposal is passed unchanged, then thousands of the 108,000 franchised dealers will soon disappear out of the market.”

He said dealers faced a triple threat from the European Commission because the proposals would undermine existing contracts with carmakers, weaken smaller dealerships at the expense of larger rivals and open the market to new retailers.

Acea and Cecra, both fully consulted for more than a year, are unlikely to exert much further influence on the EC which is expected to approve the rethink.

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