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Retailers hit by late BE contracts

Retailers are this week facing disruption after carmakers deliberately delayed issuing new block exemption contracts.

Kia and Hyundai are among the worst offenders, according to AM-online research, with agreements arriving on desks as late as September 22 – giving dealers just seven working days to sign up or face being unable to sell cars.

Hyundai's contract contained strict new aftersales standards described by one retailer as a “nightmare” and “out of step” with the franchise.

Cost is a major issue. Citroen dealers face training costs of about £200 a day per repairer with each retailer expected to employ a consultant technician needing 20 days' training a year to support authorised garages.

Although many retailers have seen draft block exemption contracts via their carmakers' intranet sites, critics say they have not been allowed enough time to thoroughly study the final documents – often 60 to 70 pages of legal jargon – before this week's deadline.

Other retailers, however, are happy with their agreements. Richard Roberts, managing director of Trident Garages and head of the MG Rover dealer council, says the new system will have little day-to-day impact. “Getting our agreements early gave us stability and took away some of the uncertainty about what effect revised block exemption would have,” he says.

Nigel Clegg, Livery Dole managing director and head of the Mitsubishi dealer council, says: “The rolling two-year contract that only allows agreements to be terminated for a genuine reason gives retailers more power. Before, a disagreement could mean the end of their career.”

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