ITALY: EU thinks new car distribution legislation may be being abused by carmakers - report
The European Union is considering intervening to ensure that block exemption rules work as intended, a member of the EU's competition committee told Automotive News Europe.
The EU crafted the new regulations for carmakers, which took effect October 1, to increase competition and lower prices for consumers. But the EU is monitoring whether carmakers are using the rule changes to create franchise contracts that achieve the opposite effects.
"The introduction of excessive standards should not betray the spirit of the new block exemption rules," said Paolo Cesarini, head of motor vehicles at the European Commission Competition General Directorate.
Speaking at a round table on the new regulations at the Bologna motor show, Cesarini said it is too early to judge the overall outcome of the new rules.
The first indications, however, are not promising. Many dealers have complained that the terms of the new contracts are too costly and too difficult to meet.
The European carmakers association, ACEA, told Automotive News Europe: "It is our understanding that all ACEA member companies are applying the requirements set out in the new regulation. We cannot comment beyond that, as it is up to individual manufacturers to decide on how to implement the new rules and to make their choices with regard to distribution strategies."
Cesarini said one aim of the new rules was to increase the brand competition within a sales outlet. The resulting development of multibrand operations was supposed to reduce a dealer's economic dependence on a single carmaker.
The EU official said some carmakers used the change to establish new operating standards that are single-brand oriented.
Jaap Timmer, chairman of the European Opel dealers association, said the new criteria for Opel dealers do not make multibrand dealerships more difficult to operate.
"As for Opel and GM," he said, "we don't think this is a problem."
Cesarini said some automakers also used the rules as an excuse to drastically reduce their dealer networks. The competition committee will monitor whether the reduction in the number of sales outlets is surpassing any EU guidelines.
The EU official said the competition committee is considering ways to evaluate whether a carmaker's operating standards are unreasonable. The committee also wants to know whether carmakers are requiring higher standards from independent dealers than from company-owned dealers.