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Dealers put spotlight on standards

The RMI Federation’s National Franchised Dealers Association (NFDA) has set up a working party to look at the burden of new legislation and, in particular, Block Exemption.

It hopes to gather evidence from dealers with a view to exerting greater influence with Government and the European Commission as it starts discussions to shape the next version of BER, due in 2010.

The working party contains a cross-mix of 10 retailers, including Pat Conway from Whitehouse, Ray Sommerville from Perrys, Sue Brownson of Blue Bell BMW and Richard Williams of Williams Automobiles. It meets for the first time this week to establish terms of reference and a work plan. Further meetings are likely to take place each quarter.

Sue Robinson, RMIF franchised dealers director, says a key focus for the working party will be the issue of franchise standards and audits. Feedback to the association has revealed widespread discontent about the number and type of audits carried out by carmakers at dealers.

Companies report more than 20 audits in the past year as each dealership department faces a separate appraisal. These audits directly affect the amount of bonus dealers receive each quarter.

“This is a real issue that has been dressed up with the Block Exemption regulations,” says Robinson. “We have spoken to the Commission and it isn’t part of Block Exemption – the manufacturers are using the regulations to focus on standards.”

The working party’s findings will be fed back to the European Commission and the Department of Trade and Industry, while anecdotal evidence of carmakers’ practices that fall outside the spirit of Block Exemption could be forwarded to the Office of Fair Trading for investigation.

“We need to get the Commission and the DTI to fundamentally understand the dealers’ side. The manufacturers’ lobby is strong and we need to get our voice heard,” says Robinson.

“We want to develop better communications with the manufacturers and get them to change their standards and the way they are audited.”

The London School of Economics is due to publish its report on the changing patterns of car distribution in February, which the RMI intends to discuss at a future working party group meeting. The academic study will feature statistics and feedback from the marketplace on the impact of Block Exemption.

#AM_ART_SPLIT# One member of the NFDA working party, who asked not to be named for fear of reprisals, says the standards dealers must meet are becoming “a nightmare”. He believes dealers need to take a stand under the auspices of the NFDA.

“We want to publicise the unfairness and take it to the OFT,” he says. “They don’t want to know about individual cases, but fronted by the NFDA they will take action.

“This working party will look at the injustices of what is against the spirit of Block Exemption and the NFDA will take evidence to carmakers and the OFT for clarification.”

Retailers suffer from the fact that, unlike in Germany and France, the UK has no dominant partner protection rules which would give them some defence against carmaker pressure.

The working party member also believes dealers should report examples of unfair practices to AM, which has agreed to compile a dossier for debate. “We can’t do this without the support of the NFDA and the media,” the dealer boss adds.

Emails and phone calls to AM have already identified a number of pressing issues, with dealers claiming the problems are deep-rooted.

One, who also asked not to be named, says: “In two years there will be no independents or owner drivers and the market will be controlled by the plcs. Franchises we hold are showing losses year to date and yet manufacturers still continue to want to change signage/standards.”

SMMT ‘recognises concerns of dealers’

The Society of Motor Manufacturers and Traders (SMMT), believed to be tasked by the DTI with playing a greater role in the retail and aftermarket sectors, says it recognises the concerns of franchised dealers.

However, it points to the DTI-funded National Consumer Council’s threat of a super-complaint for the motor industry – the servicing and repair sector has until March next year to agree a national code for consumer protection – as a key reason why carmakers tightly regulate their franchised dealer networks.

“Also, the What Car? report on the level of service for female customers shows the need for manufacturers audits and mystery shopping to ensure this type of experience is kept to a minimum,” says SMMT media manager Nigel Wonnacott. “The industry recognises dealers concerns but some dealers have some way to go to raise their game.”

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