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The Big Picture: Dealers risk losing benefits

The SMMT is awaiting the publication of the European Commission report into Block Exemption Regulation 2010 (BER 2010) before it decides its official policy.

The RMIF, meanwhile, has been lobbying for the past year and recently had its Block Exemption strategy ratified by its executive board.

Rewind eight years to 2000, and two years before the last Block Exemption revisions, and the position was reversed, with the SMMT at the forefront of negotiations and the RMIF sat back watching and waiting. Credit, then, to the RMIF and Sue Robinson, director of its National Franchised Dealers Association, for pushing the agenda with the likes of EC competition commissioner Paolo Cesarini.

However, while the NFDA is fighting on behalf of its members, elsewhere in Europe other retail trade associations are less well organised. In particular, CECRA, the European dealer umbrella organisation which wants to retain current BER, is becoming worryingly sidelined.

But the biggest threat facing dealers is the dealers themselves. Across Europe, they have a role to play in determining the outcome of BER 2010. It’s a role many are failing to fulfil.

“They are in danger of losing key freedoms that current Block Exemption gives them and that’s because they haven’t used them,” one senior industry guru told me.

He was referring to the flexibility dealers currently have over their contracts, particularly multi-franchising, opening additional outlets in any location and splitting the sales and aftersales operations by building authorised repairer outlets.

Across Europe, only a minority of dealers have grasped the opportunities created by BER 2002. They face resistance from manufacturers that in some cases amounts to bullying, but a few have stood up for their rights. More need to follow their example if they are to persuade the EC to retain existing benefits.

More worrying is the suggestion that the EC might end retailers’ rights to sell the franchise with the business to another dealer that already holds the franchise. “It has nothing to do with competition,” says the expert. “Dealers could be disappointed in 2010.”

If dealers are to gain greater concessions from the EC, they have to show they are using existing ones to instigate greater competition. We will find out if the EC is convinced when it releases its thoughts on BER 2010 in May.

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