The end of the clause will permit dealers to open additional sales outlets or delivery points anywhere in Europe. Dealers will have to comply with the relevant qualitative criteria for the activities they choose to conduct, although few carmakers have yet to release details about their standards.
“Outlets do not have to be a full showroom, they could just be a sales or handover business,” says Andrew Tongue, project manager at the International Car Distribution Programme (ICDP).
He believes dealers might consider options ranging from opening a display outlet in the foyer of Tesco to using low-loader trucks as mobile sales outlets. “The aim is to permit experimentation. If it works, no-one will complain,” he adds.
Some plcs and strong regionals are expected to open showrooms to target businesses perceived as weak. This raises an issue over sales targets, which has implications for bonus payments. Will, for instance, the two outlets share the sales target for the region, or will each receive an individual target?
Additional questions have been raised over open points. Dealers might seek to fill an open point with a delivery facility rather than build a full-scale showroom, and carmakers would be able to do very little about it.
“Manufacturers would be obliged to accept the lower standard facility or open their own outlets,” says Tongue.
“There would be no overnight revolution, but a gradual weakening of network control.”
Location clause applies only to manufacturers with selective distribution networks and those with more than 5% market share by country, although the European Commission clumps together brand groups, for example, VW, Audi, Skoda, Seat and Bentley under the VW Group, and Jaguar, Land Rover, Aston Martin and Volvo with Ford. Few will miss the cut.
“The principle is that if you are a small carmaker you will not be able to exert a high level of control or influence over dealers,” says Tongue.