Industry calls for guidelines on ‘confusing’ car retail regulations

Date: 26/09/02

By Martin Banks

GUIDELINES should be issued urgently to car dealers to ensure that the long-awaited reform of the way cars are sold throughout the EU is properly enforced, says an MEP.

Conservative Malcolm Harbour claims there is still widespread confusion within the industry about the new rules, which come into force next Tuesday (1 October).

The reforms to the car block exemption scheme, unveiled by the European Commission in July, are designed to break the carmakers' stranglehold over retail sales.

From next week, dealers, whose commercial activities have previously been confined to a specific geographical area, will have the freedom to solicit or open for business anywhere in the EU.

They will also be able to open supermarket-style showrooms offering a selection of brands, rather than just one, as was the case until now.

However, Harbour, a former car engineer and sales director with UK carmaker Rover, has called on the Commission to issue guidelines to dealers to explain how the new system will work. Main dealers are in the dark about the implications of the reforms, he said.

'These are very, very complicated rules and we need to ensure that they will be enforced effectively.

'I have spoken to some knowledgeable people in the industry who are confused about what it all involves.

'If they are concerned, how are ordinary dealers feeling?

'Given that the new rules come into force in a few days, I am asking the Commission to make clear and easy-to-understand guidelines available to dealers as a matter of urgency.

'Details could be put on the internet or, perhaps, on a CD-Rom and should set out exactly what, for example, a small car dealer has to do if he wants to apply for a manufacturer's franchise.'

Harbour's concern about enforcement of the reforms is shared by BEUC, the European consumers' organisation.

Manufacturers will have a one-year period of grace to adapt, but BEUC's economic advisor, Dominique Forest, said: 'Our main worry is that some car dealers will decide it is in their interests to continue selling just one brand of car.

'Others may think it too risky to mix models.

'Of course, dealers are not being compelled to sell more than one make, but it will generally be in the consumer's interests if they do so.'

Guidelines should be issued urgently to car dealers to ensure that the long-awaited reform of the way cars are sold throughout the EU is properly enforced, says MEP Malcolm Harbour. He claims there is still widespread confusion within the industry about the new rules, which come into force on 1 October 2002.