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Dealers urged to lobby for BER code of conduct

Dealers are being urged to lobby UK and European politicians for an industry code of conduct designed to protect consumer and dealer interests.

The National Franchised Dealers’ Association (NFDA) says it is actively lobbying for a code to counteract increasing manufacturer “abuse of power” over their retail networks.

NFDA director Sue Robinson said: “Having a proper code of conduct will be particularly useful after May 2013 when the industry moves from the sector-specific competition rules (con-tained in EC regulation 1400/2002) to a system of more open regulation.

“It will help limit the opportunities manufacturers will have to abuse their strong bargaining position with dealer networks.

At the moment, there is little incentive for manufacturers to agree a proper code of conduct and although the NFDA has lobbied the European Commission hard to endorse a solution, we are still a long way from achieving any compromise.

We need dealers to act with urgency as manufacturers are already planning their 2013 networks.”

The NFDA wants dealers to help generate momentum for the code through writing to their MPs and
MEPs.

Draft letters for MPs and MEPs are available for dealers to adapt and send.

The NFDA says effort to persuade vehicle manufacturers to open constructive discussions on the issue have been “largely rebuffed”.

The letters say: “It follows that the consumer and other benefits won over recent years could easily be lost, as manufacturers begin to re-impose their will and excessive restrictions over their retail networks.

"Consumers will lose out under the new rules – both in terms of new car purchases (where manufacturers will be able to restrict competition) and for repair and maintenance services.”

Threats posed to the gains made in the 2002 Block Exemption Regulation from 2013, says the NFDA, include:

* A return of ‘Rip off Britain’ when car prices were 30-40% higher than in Europe
* Significant harm caused by less model choice, restricted choice of local repairer, the need to travel further for sales and service and poor response to consumer demands and needs
* Higher prices for service, repair and parts
* “Patchy” quality for retail service and facilities to consumers.

Robinson said that while the NFDA cannot now amend the new EU rules, it can ensure – through an industry code designed to “plug the gaps” left by the new rules – that dealers are less restricted in the benefits they offer to consumers and feel able to invest properly in their businesses.

The NFDA has already proposed a suitable code of conduct, the European Franchised Code, but needs UK and EU political support to progress it.

The code would, the NFDA says, give dealers the commercial independence to be able to invest confidently, manage their businesses efficiently and respond effectively to consumer needs.

The Society of Motor Manufacturers and Traders said in a statement: "In 2008, ACEA, the European vehicle manufacturers’ association, developed a code of practice to ensure positive working relationships between dealers and VMs.

"The SMMT is keen to work with colleagues across the franchise networks, and is increasingly doing so, to provide a high quality, safe and competitive environment for consumers and importantly, make sure motorists are aware of the services and benefits they offer.

"With the existing code of practice and the desire for stronger working relationships between vehicle manufacturers and dealers, we’re confident that the competition regime post 2012 should not cause concern for dealers of consumers."

Draft letters:

Letter for MPs

Letter for MEPs

BER briefing note

 

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