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Dealers holding on for contracts, says RMI

Failure by car manufacturers to finalise agreements prior to the introduction of the new Block Exemption regulation could leave dealers in a legal limbo, warned the Retail Motor Industry Federation (RMI) on the eve of the new regulations coming into force today, 1 October. Some franchised dealers are concerned that they have not yet received revised agreements from car manufacturers in time for the new regulation.

Matthew Carrington, RMI chief executive said: “Certain car manufacturers have been dragging their feet on completing negotiations, and even at this late stage, it is not clear whether all franchised dealers have new agreements finalised. This could leave a number of dealers in an uncertain legal position, as they will be operating under the new rules, using an agreement that conforms to the old regulation.”

He continued: “Car dealers may find themselves in the unenviable position of having to operate under two systems at once. Hopefully this interregnum should not last for too long. It is in the interests of the manufacturers as well as dealers that the agreements are completed as quickly as possible.”

However, even after the agreements are set, Carrington does not believe that sudden change is likely: “The new regulation will set in place new rights, as well as responsibilities for dealers, but it will be some time before we see any effect on the sector. For motor retailers, 1 October 2003 is New Year's Day. It may be a new era, but it will be some months before any changes become apparent.”

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