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OFT’s ruling on Citroen ‘disappointing’ – RMI

A complaint concerning Citroen placing a minimum standard on showroom space for its franchisees has been thrown out by the Office of Fair Trading, to the dismay of the RMI.

The federation lodged the complaint in response to the carmaker’s demands for a minimum interior display of eight cars.

However the OFT has considered that this does not constitute an unfair demand under block exemption regulations, ruling that a manufacturer has the right to require its franchised dealers to have showrooms of sufficient size to display its full range of models.

Nevertheless, the ruling made it clear that this requirement must not impede a dealer’s right to multi-franchise a showroom.

Alan Pulham, RMI franchised dealer director, says he is disappointed by the outcome.

“In such circumstances, Citroen or any other supplier would have to moderate their demands sufficiently to allow showroom sharing to occur. This decision has important implications for many dealers considering their business plans for the future,” he says.

In August, AM reported how the OFT upheld a complaint from the RMI that Peugeot’s ‘Blue Box’ mandatory showroom branding illegally restricted dealerships from multi-franchising.

The carmaker was warned it could only recommend its retailers incorporate the branding, but compulsion would breach block exemption.

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