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OFT backs Citroen in showroom size dispute

The Office of Fair Trading has backed Citroen in a dispute with the Retail Motor Industry Federation over showroom sizes.

Following an investigation into dealer showroom standards being demanded by Citroen, the OFT concluded this week that under the block exemption regulation the manufacturer had the right to require UK mainland dealers to have showrooms of a size appropriate for full range display.

Dealers’ contracts under the previous block exemption required showrooms to house six-eight vehicles. The new contracts require space for as many as 10. The RMI had argued that the new showroom requirement was "completely disproportionate to the size of Citroen’s market share".

The ruling did, however, make clear that this requirement must not impede any dealer's right to multi-franchise his showroom.

In response to the OFT’s ruling Alan Pulham, the RMI’s franchised dealer director, said today: "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."

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