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NFDA calls dealer councils to action over BER changes

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Dealer councils have been contacted by the National Franchise Dealer Association urging them to alert their networks to the potential changes to manufacturer contracts being issued now incorporating changes to Block Exemption regulations.

Sue Robinson, RMI NFDA director, said: “Manufacturers must appreciate that a dealer council has a duty to its network to represent their interests fully. Obtaining proper advice helps fulfil that duty.

“The European Commission has created an expectation that manufacturers should operate in a transparent manner with their dealers and adhere to minimum standards of behaviour in their commercial relationships, as set out in a published code of conduct.

“We are urging all dealer councils to lobby manufacturers for such a code that would make the relationship between dealers and manufacturers as fair as possible.”

Robinson said some dealers may feel they have no choice but to sign a new agreement which do not reference a proper code of conduct to support “efficient, fair and transparent commercial relationships”.

“However it is important that dealers are made aware that it is reasonable for them to state – in any covering letter returning such agreements – that it expects its manufacturer to take account of all European Commission guidance on code of conduct to support transparent and fair dealings in due course.

The new Block Exemption regulation – article 330/2010 – is due to come into force for new vehicle sales franchises on June 1, 2013 with the expectation of far-reaching termination of networks, many with full two-year notice periods.

In February dealers were urged to lobby UK and European politicians for an industry code of conduct designed to protect consumer and dealer interests.

The NFDA warned it was necessary to counteract increasing manufacturer “abuse of power” over their retail networks (see story here).

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