Strasbourg, 05/02/2002 (Agence Europe) - "We cannot allow a "fundamental piece" of the single market such as the automobile industry to continue not to be single", the Commissioner for Competition, Mario Monti told the European Parliament Tuesday afternoon when presenting a group exemption for the automobile industry that the Commission had just adopted in Strasbourg (for the details, see below). The aim of this regulation is to put an end to the "serious restriction in the concrete functioning of the current regulation", to ensure both genuine competition and a better choice for consumers, said Mr. Monti, giving an example: a Volkswagen salesman in Amsterdam will be able to open a showroom in the United Kingdom, and offer cars at Dutch prices, which are 23% below British prices. The Commission expects these proposals to have a positive effect on employment and small and medium-sized enterprises, Mr. Monti also remarked, announcing that he would inform the EP's Economic and Monetary Committee in a more detailed fashion (the CDU member, Christoph Konrad is the rapporteur on this issue) on 19 February. In addition, the Commissioner hopes that consultations with the representatives of the category could be concluded by summer.
Mr Monti then answered MEPs' questions on price convergence. Responding to a question from UK Conservative MEP Malcolm Harbour, he said that the Commission had resisted the temptation to become a price regulator since it was not their job to decide whether or not price differentials were appropriate, but added that the draft regulation aimed to attack the source of the problem. Answering a question from Christoph Konrad who feared that freedom of establishment would not be respected, Mr Monti said that if there had been a clause about geographical location, then effectively freedom of establishment might have been jeopardised, but there is no such clause. Responding to Karin Rijs-Joergensen (Danish Liberal) on the whether it was a good idea to propose a specific regulation rather than use the general competition rules, the Commissioner said that he was philosophically opposed to specific sectoral rules but without particular rules, the regulation on exemptions by category would have had to be applied to the automobile industry, but that is what the Commission wanted to avoid. British Labour MEP Arlene McCarthy asked whether it was true, as Mr Monti had told her in 1999, that car prices in the United Kingdom would come down if the UK joined the euro? John Cushnahan (EPP, Ireland) called on Mr Monti to approach the Irish authorities to get them to abandon their car registration tax that can cause price rises of around 50%. Mr Monti smiled and said that fortunately he was not responsible for tax (although he used to be, Ed) or EMU, but only for humble competition policy. He answered Ms McCarthy by saying that no supermarket had expressed the desire to regularly sell cars but that it would not be true to say that the draft regulation did not give supermarkets just such an opportunity as long as they met the criteria.
The new rules
The new rules envisage sizeable reform of the current regime in order to remedy the competition problems noted in the Commission's assessment report for the year 2000, and which should largely benefit car buyers within the EU, both with regards sales and after sales with an opening, in particular, towards new distribution techniques such as Internet sales. The main changes envisaged in the project are: 1) choice between "exclusive distribution" or "selective distribution": the automobile manufacturers will now have to choose between exclusive or selective distribution. Except for a black list of characterised restrictions, the Commission will leave it up to the manufacturer to organise the network as he pleases; 2) several makes: distributors will now have the choice of selling one or several makes, which will strengthen their commercial independence from their suppliers; 3) less restrictions for intermediaries: the restrictions imposed on operators speaking on behalf of consumers for the purchase of a vehicle will be lifted, thus facilitating the circulation of new motor vehicles in the single market to the great advantage of consumers who will more take advantage of prices that are less high in other EU countries; 4) possibility for distributors that are part of a distribution system to create a secondary sales point in another Member State to that where it is established. This measure as well as the previous measures will result in greater pressure on price differences that are often extremely high from one Member State to the next; 5) promotion of quality and choice in the repairs sector: dealers will now choose to carry out repairs themselves or to entrust them to a sub-contractor. Furthermore, both independent repairers and current dealers may become authorised repairers within the manufacturers' network without being compelled to sell new cars; 6) access to technical information: repairers hoping to remain independent of specific makes should be able to have access to information, tooling, and equipment available to those makers; 7) end of original spare parts monopoly: authorised repairers will no longer be able to envisage clauses aimed at only supplying repairers with original spare parts. The automobile manufacturer for its part will no longer be able to prevent repairers from obtaining spare spares of equivalent quality from other supply sources, except in specific cases; 8) strengthened commercial independence of dealers: The project provides for effective measures in order to prevent car manufacturers from putting up barriers on dealers that behave more favourably towards competition by adopting the new rules (sale of several makes, sale in other Member States). Thus, the maker should now clearly indicate in writing why it puts an end to a dealers' contract in order to allow its validity in the event of dispute to be assessed (See also yesterday's EUROPE, p.9 for procedure).
During voting at the Commission, unanimity was not reached on this draft regulation. Four Commissioners voted against and another abstained. EUROPE has reason to believe that the proposal by Commissioner Monti was the subject of two minor reservations on the part of Ms Diamantopoulou and Mr Busquin. Messrs Liikanen, Lamy, Barnier and Verheugen showed themselves to be more critical, mentioning concerns for the competitiveness of European industry compared to third countries.