On May 26, the European Commission is bringing in new competition rules for agreements between carmakers and their authorised dealers, repairers and spare parts distributors.
The existing EU Motor Vehicle Block Exemption Regulation (MVBER), which dates from 2002 and covers agreements concerning the distribution and servicing of vehicles in the EU, is due to expire at the end of May. Currently it exempts from EU competition rules arrangements for the distribution of new cars and their subsequent servicing.
In July last year, the European Commission set out its policy for the future legal framework for vehicle sales and after sale service agreements after the expiry of the current Block Exemption Regulation on 31 May this year.
The Commission split the issue into the primary market (vehicle sales) and aftermarket (repair and maintenance services and spare parts distribution).
For the primary market, it said existing provisions would be extended for three years so, from 1 June 2013, new car sales would come under general competition rules on vertical arrangements.
The exemptions affect arrangements between undertakings in the automotive industry that improve production or distribution of goods while allowing consumers a fair share of the resulting benefits.
Now the Commission has proposed that because consumers are benefiting from competitive conditions in the European market, those markets should no longer be subject to a sector-specific regime and instead be brought within the ambit of the general block exemption for vertical restraints.
At the same time a tougher approach is being proposed for car repair and for spare parts because the Commission views those markets are structurally less competitive.
Speaking before the European Parliament on May 5th, Commissioner Joaquin Almunia said: "I strongly believe the new framework will bring tangible benefits for consumers. Our main priority is to increase competition in the aftersales market, in repair and servicing, where it is most lacking, and where European consumers spend a substantial slice of their budget."
According to the ACEA, the European Automobile Manufacturers’ Association, which represents the common interests of 15 major European manufacturers, the decision is welcome.
“ACEA by and large agrees with the Commission's analysis and supports the decision,” spokesperson Sigrid de Vries told Automotive Logistics News. “However, there is no need to wait another three years before implementing it.”
ACEA acknowledged that the markets for vehicle distribution and servicing has intensified and that the functioning of the internal market in the automotive sector has improved considerably in recent years.
“We therefore share the Commission’s view that there are at present no real indications of market failure or actual or potential consumer harm in the automotive sector that would distinguish motor vehicles from other economic sectors,” said the association in an official response to the new rules.
There was similar acceptance from the Society of Motor Manufacturers and Traders (SMMT). Spokesperson Nikki Rooke said the SMMT was “pleased that the Commission has confirmed the competitiveness of the new car market and supports its intention to simplify the current regulation into a more flexible regime and the need to ensure a smooth transition from the current regulation.”
For the aftermarket, the general block exemption would apply in conjunction with specific sectoral regulation from 1 June 2010.
“SMMT welcomed the Commission's commitment to finding an optimum solution for the aftermarket that protects the interests of the independent aftermarket and their access to the parts and information required to service and repair vehicles,” said Rooke.