Brussels, 08/02/2002 (Agence Europe) - The Commission project concerning the distribution of motor vehicles has, though only just adopted, caused considerable reaction in the circles concerned. Thus, the European Automobile Manufacturers Association (ACEA) expressed its "deep concern" about the project, the clauses of which seem, it says, "inadequate, too far reaching and contrary to the aim set". "We shall continue to work (…) until solutions that are more reasonable than this proposal are found", said ACEA. More especially, the association considers that preventing makers from determining the number and the locality of their sales points would lead to a situation that is "unique in the world", with, as a result, a concentration of dealers in the most populated, most profitable areas, to the detriment of the small and medium-sized concessions, thus entailing price rises and lower supply, which run counter to the aims set. Furthermore, authorising the sale of several makes at these sales points would be to the detriment of the brand image and would prevent healthy competition among the different makes, ACEA continues. Regarding the abolition of the sale/after-sales/repair link, ACEA considers that the absence of this link will complicate follow-up with regards guarantees linked to the purchase of a new vehicle and will no longer satisfy consumers' demands. According to ACEA, the new system proposed by the Commission could mean that car makers lose their accountability towards consumers and towards society in general, with regards security and environmental protection.
Roland Gardin, President of the "Comité national des professions de l'automobile" (CNPA), in France, also mentioned the risk that the possibility given to every repairer to become an authorised repairer would favour the main distribution groups and destabilise the whole system. The German Automobile Federation (VDA), for its part, described the Commission's project as unacceptable: "the automobile industry categorically rejects this proposal (…) as the project is counter to consumers' interests and leads to the loss of thousands of jobs in the car sector, which is structured in SMEs", said its president, Thomas Gottschalk, in essence. The "Fédération belge de l'industrie automobile et du cycle" (FEBIAC) considers that "there is nothing to reproach the current system with, which makes reform absolutely superfluous". In addition to the price rise caused by a movement of concentration of dealers in some areas, the FEBIAC, also, fears a decline in security with the disappearance of the link between sale and after-sales. The European Committee for Motor Trades and Repairs (CECRA) is highly critical of the locality clause giving distributors the possibility to set up business wherever they like: "only distributors with the necessary funds will have the possibility to take advantage of this provision, but it is only a minority". Thus, CECRA calls for a localisation clause prohibiting distributors from opening up a sales point outside their territory. The European Consumers' Organisation (BEUC) is disappointed by the project but, of course, for different reasons. Although Commissioner Monti aims to "put the consumer in the driving seat", he has "not put enough petrol in the tank", says BEUC. He thus regrets that the project does not quite simply abolish the territorial exclusivity regime rather than leave the choice to makers between "an exclusive system close to the current system and a regime of selectivity within which there are grey areas". A choice which, according to BEUC, would allow makers to manoeuver in a way that results in a situation close to the present one. In an interview granted to Le Monde, Jim Murray, BEUC President, stresses that the maker who chooses selective distribution would still have the possibility of preventing his authorised dealer from prospecting abroad, by fixing discouraging sales objectives. Mr Murray, on the other hand, welcomes the fact that dealers may sub-contract the after-sales services. It will be necessary, however, to ensure that makers really do allow independent garages to have access to spare parts and to the information they need, he adds.
German Chancellor Schröder also leapt into battle by openly criticising the Commission's project which, he said, "will enormously penalise the German car industry compared to its rivals". "He who, in the name of competition, intervenes in a system that has shown its worth, must be not only aware of what he is defending but also of what he is destroying", he said in substance.
Divergent views at European Parliament, depending on political sensitivity
The proposals of the European Commission with a view to amending the competition rules on the distribution of motor vehicles are going along the right lines, Christoph Konrad, CDU member and Parliament rapporteur on the re-organisation of the automobile distribution market, told the press. They must, in fact, result in the disappearance of geographical restrictions, which are at the origin of price differences of up to 30%, he noted, considering that the motor industry is wrong to protest, as it was the motor industry itself that began the current restructuring. The EP rapporteur stresses that there are many advantages to the new system, not only for consumers but also for distributors, who may, for example, be able to buy original spare parts from the makers directly, and who will have the choice between selective distribution and exclusive distribution. Mr Konrad, however, does have reservation about the transition periods, which should, he believes, be longer than the Commission recommends. British Liberal Democrat Chris Huhne, for his part, considers that the project does not go far enough as it still gives the maker too much power over its authorised dealers, and does not give sufficient margin of manoeuvre to the sale of cars via the Internet and in supermarkets. The Commission is not yet the best friend of anyone wanting to buy a car, he stressed.