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Exemption needs to apply across Europe

Work needs to be done to simplify the motor trade’s Block Exemption in 2010 and make it applicable across all of Europe, according to Professor Garel Rhys.

Rhys believes the European Commission is relatively pleased with the result of the 2002 revision, and said it doesn’t seem to be approaching the issue with pre-conceived ideas that things aren’t going well and that the consumer is being undermined.

Rhys hopes that 2010 will be a more measured process, conducted in a spirit of goodwill for the motor industry.

Speaking at the PKF Navigating the Road Ahead seminar in Northampton, Rhys said the investigations in preparation for 2010 must take note of the differences in the structure of the consolidated UK retail network, and the more fragmented networks abroad.

“In the UK, the boundary between the vehicle manufacturer and dealers isn’t too bad, it’s about right,” he said.

“We have various big dealer networks who are beginning to create a tail that could almost wag the dog, so to speak. But if you look at Italy and Spain it’s still a highly fragmented dealer industry. “And it might be believed that in Italy and Spain they need more protection for the dealer side of the equation.

“Perhaps dealers do therefore need further measures that you might not need in countries like the Netherlands or the UK, but that you might need elsewhere.”

Rhys said the European Commission should try to avoid being “over influenced” by carmakers: “If the Block Exemption is there then danger lurks for the ordinary dealer, because the regulation over the last 20 years, not just in this area, actually tends to favour the carmaker.

“The commission hasn’t perhaps been as forthright in trying to reduce the hurdles of increased standards that manufacturers put into place. That’s a barrier to entry in anybody’s language.” With the most consolidated dealer network in Europe, selling twice as many cars per outlet than the nearest country, the UK industry is different to the rest of the EU.

The British will have to be careful that its message is really one that is backed by the industry, he said.

“There has been an increase in the way that the standalone authorised repairer end of the market has grown, not just in the UK but elsewhere, and the European Commission is content with the early signs of that.

“The decline in independent repairs has reversed, and cars are increasing in price at a slower rate than inflation,” he said.

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