Exaggerated pressures. The new European automobile distribution system enters into force on Tuesday 1 October. What's this actually going to mean? In the immediate term, absolutely nothing. And Later? Will the car market be disrupted? Certainly not, except for the distributors themselves. Buyers will have more opportunities, not with regard to the choice of car (competition is already very sharp, a large number of models are available in all categories) but in the methods of purchasing: they will be able to, depending on certain conditions, to go to the large shops and different brands will be on offer and sold by single distributors (see our bulletin yesterday p 13). But buyers will have to make sure that they don't pay for this freedom of choice by having fewer after-sales facilities, repairs and spare parts. In all, this constitutes an adjustment, not a revolution.
Why then is there such a polemic surrounding this new European system? I think that the matter has swollen out of all proportion and on occasions, has been badly interpreted. Commissioner Mario Monti, in charge of the case, admitted that only in one previous case had there been so much political pressure, lobbying operations and press campaigns - this involved the getting rid of duty-free in airports on inter-community flights. The professional sectors affected, went to exceptional measures of mobilisation to protect their privileges (the range of their tax advantages enabled them to do this) and they were able to rally to their cause, by a number of arguments that didn't always hold water, a certain number of public authorities. But Professor Monti held out and the "duty-free shops" were re-organised and countries stopped losing considerable tax revenue.
Some strong points for a perplexed public. The car companies also used their "fire power" to block the project affecting them, and the authorities in one Member State (Germany) created the impression that they believed for a while, that the project would effectively damage the car industry itself. This is not the case and the large manufacturers permanently renounced any radical obstruction to the measures, limiting themselves to requesting some improvements (which they obviously have the right to do). Perplexities with regard to a total liberation of distribution were also expressed by political forces on the left (Bernard Marx, an economist at "Confrontations", the body presided over by MEP, Philippe Herzog exclaimed, "we consider that we're fighting for the consumer but we're fighting for the distribution giants"; the debate at the European Parliament confirmed this. The EP finally obtained some amendments one of which was relevant to the initial project.
The polemic, the opposing arguments, which at first glance appeared to be all based on uncertainties and contradictory attitudes at the very interior of a political tendency, undoubtedly upset the public, which didn't know what to make of it. I would therefore like to set out a few strong points.
1. The European Commission was obliged to intervene because although competition is practically perfect at a production level, it is left wanting at distribution and sales levels. The Commission was already acting and will continue to do so, in order to improve the working of the common market (see fines, sometimes very high, applied to firms creating obstacles) but it was also compelled to make the distribution system more open.
2. The starting point for the new regulation is that the particular nature of the car sector is now fully taken on board. The commentators strangely forget this essential aspect. And yet, what the Commission has approved is a new "exception by category" regulation (a formula that means that an economic sector is exempted from the integral application of rules of competition). Parallels with the car and the environment (air pollution), road and town safety and the economies of energy etc. are acknowledged and justify a special system. The European Consumers Organisation (BEUC) and certain political forces were calling for the complete suppression of all "exemptions". The Commission didn't want this: it made the rules of the previous regulation more flexible (in the sense of openings) but kept the principle by also taking on board the importance of the car sector for industrial activity and jobs.
3. The decision of the European Commission was preceded by a long consultation period with the experts and took on board their results. It kept 18 amendments (out of 29) requested by the European Parliament and agreed to extend the transition periods (notably for the "localisation clause") while remaining firm on arrival points, in order to end any legal uncertainties.
This affair also raised a number of institutional issues to which I will return. (F.R.)