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IM pulls plug on resellers

A row over warranties between car supermarket Motorpoint and International Motors could have serious repercussions for all resellers sourcing new cars from franchised dealers.

International Motors, the official UK supplier for Subaru, Isuzu and Daihatsu, has invoked the Block Exemption rule which states dealers are not allowed to sell new cars to resellers. Unlike some carmakers, which ignore such practices if it means selling more cars into the market, IM believes it damages the brand.

The row erupted after Motorpoint issued a statement claiming IM was refusing to honour warranties of new cars imported from the European Union to be sold by third parties.

In a statement to AM IM says: “To fulfil the requirements of the Block Exemption Regulations 1400/2002 (BER) relating to the selective distribution system, independent Subaru importers and distributors throughout the EEA are obliged to refrain from selling new motor vehicles to unauthorised resellers.

“Given the prohibition of such sales, Subaru importers and distributors are also obliged to refrain from applying warranty coverage to vehicles sold by unauthorised resellers. Subaru (UK) Ltd is subject to this.”

IM adds that if Subaru cars are offered for sale from stock and/or have not been imported “pursuant to a proper mandate from a customer”, then the retailer is acting as an unauthorised reseller in contravention of BER.

Subaru’s stance has been backed by its retailers. One dealer, who asked not to be named, says: “I support their stance. We are all affected by car supermarkets. No one can support a car they’ve had no profit on.”

He believes few UK Subaru retailers are selling cars onto supermarkets because “our targets are very realistic - we hit ours mid year”.

He adds: “We can, within reason, stock what we want, and there is no penalty if the target is not met.”

A Subaru spokesman is confident the stock being sold at car supermarkets has been sourced from mainland Europe given the volumes the UK network sells per year. “We don’t want to be portrayed as it just being sour grapes. We’re just adhering to the legislation and to the manufacturers wishes,” he adds.

However, Paul Winfield, sales director of Motorpoint claims all other manufacturers honour the warranties for the vehicles the company sells.

“Only Subaru UK gives us any problems. It is exploiting a loophole in EU regulations which does not do the brand’s image any good. I think it’s just sour grapes that they aren’t the ones selling the cars,” he says.

Motorpoint, which retails some 26,000 vehicles a year, estimates annual Subaru sales of between 500 and 600 vehicles across its four sites. Customers can expect savings of between £4,000 and £8,000 on list prices and receive 12 months’ warranty free. A one year extended warranty is offered for £299 and 2 years for £499.

All Subaru’s sold previously that were believed to be covered by the three-year warranty, are also being honoured.

The British Independent Motor Trade Association (BIMTA), which represents independent vehicles importers, doubts whether IM is acting on orders from Japan.

“We would be surprised if this position has been directed from the top of Subaru, as most responsible manufacturers provide an international transferable warranty for up to 24 months,” says its spokesman Richard Moore. “We know of no other manufacturer who has taken such a position.”

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