Brussels, 16/07/2002 (Agence Europe) - The adoption of a new regulation on car distribution which will be on the table at the European Commission this Wednesday, is expected to be discussed before its definitive adoption. The draft was presented by the European Commission last February but did not receive unanimity during adoption procedures because of opposition from Commissioners Liikanen, Barnier, Lamy and Verheugen. They said that the draft sought too radical a form of liberalisation in a sector that was already reeling from the economic crisis (see EUROPE 6 February pp 9-10). After a period of consultation with the main parties concerned at the EP (who exercise a consultative but unbinding recommendation), competition services put the finishing touches to the initial version, without, as indicated by an official last week, fundamentally overhauling it. Tomorrow the abolition of the "localisation clause" will be the main focus of debates. The localisation clause has been much talked about over the past months and should allow car manufacturers to closely monitor the geographical implantation of its car dealers. The abolition of this clause foreseen in the draft voted on in February has reportedly not been changed in the final version by Commissioner Monti concerning the deadline for getting rid of it, despite the worries of the EP, which had requested a postponement. The abolition of this clause will allow car dealers to open other sales outlets outside the area of their normal activities. It will also thus enable competition to be exercised freely.
Europe understands that most of the Commissioners today support (to varying degrees) Mario Monti's proposal, with the Commissioners most in favour of the changes proposed by the Commissioner being Nielson, Patten and Wallström (who are likely to give him full support). Commissioners Bolkestein and Byrne recommend even more liberalisation, abolishing the clause on 1 October 2003, on the grounds that consumers should be able to take advantage of the benefits of the reform as soon as possible. Commissioner de Palacio is expected to ask the College to take greater account of the amendments set out in the EP's Konrad report (calling for an extension of the localisation clause until 2005, along with a review clause). President Prodi, along with Kinnock, Fischler, Busquin, Solbes, Reding, Schreyer and Diamantopoulou are reported to be calling for a compromise with tight surveillance of the market once the clause is abolished in order to avoid the emergence of anti-competition behaviour, or alternatively for a further extension of the transition period. Less crucially, Commissioners Liikanen, Verheugen and Barnier want more clarity about multi-branding (the option for car dealers to sell cars of different makes in the same garage). The foreseen measures in this connection stipulate that the manufacturer would pay all the costs of the dealer following a sales policy specific to the make in question. The Commissioners are reported to favour scrapping this clause on the grounds that it is up to the parties themselves to decide, in their contract, who will cover these costs.