Car parts proposals jammed

Date: 21/11/1996

By Simon Coss

PLANS to free up Europe's market in car parts are unlikely to move any further down the road before the end of this year, with internal market ministers caught between the competing interests of spare parts manufacturers and the motor industry.

The proposed moves to open the market are contained in a wider European Commission proposal on the protection of industrial designs in general.

As argument continues to rage over the issue, ministers will consider whether they should try to reach agreement on the rest of the proposal when they meet next Tuesday (26 November), but pass the troublesome car parts plan on to the Dutch presidency, which begins on 1 January next year.

However, the Commission will object to this approach on the grounds that it would obstruct the internal market. Because of this, it can only be adopted if ministers agree unanimously to do so and the UK and Austria have lodged objections to splitting the proposal in this way.

Ministers are divided on the car parts issue between those from member states with powerful motor industry lobbies (primarily France and Germany) who currently argue that carmakers should be entitled to legal protection for components they have designed, and others (led by Ireland and the UK) who say that consumers should have the option of buying replacement parts from a variety of suppliers.

If any movement is to be made, then it will most likely be Germany which breaks through the current roadblock.

Bonn has until now been sitting on the fence, caught between the mighty German car manufacturer lobby on the one hand and calls for a free market for the multi-billion-ecu spare parts industry on the other.

Until the Germans decide which way they are going to jump, the current gridlock is likely to persist.

“The German attitude is pathetic. They should have the courage to take a decision one way or the other. Either they support a liberalisation of the spare parts market or they do not,” said Rupert Hughes of the Campaign for the Freedom of the Automotive Parts and Repair Market (ECAR).

Under the Commission's current proposal, amended after criticisms from the European Parliament that the original plan was biased in favour of the car manufacturers, spare parts makers would be allowed to produce vehicle parts under licence, paying a “fair and reasonable” royalty fee each time a design was copied.

The entire car parts argument hinges around the question of what constitutes a design. Both sides agree that the product in question must be visible, and there is no dispute over engine components such as spark plugs or oil filters.

The problem arises over parts which can be seen, such as bumpers, wing panels, headlamp casings or radiator grilles.

The car manufacturers argue that they have spent time and money developing characteristic designs for such components which constitute distinctive elements of a unique product, and question why spare parts manufacturers should benefit from their research and development expenditure.

But the spare parts makers argue that the design principle only applies to the entire car, not a bonnet or a wing mirror. The customer buys the complete design concept rather than its component parts. Therefore, they say, spare parts should not be subject to design protection.

As consumers have to buy specific parts for specific cars - a dented wing of a Mercedes cannot be replaced by one from a Renault, for example - spare parts makers maintain that the carmakers are in effect demanding their own monopolies.