Motor industry welcomes block exemption report

12 October 2001 #SMMT News

SMMT today welcomes publication of a report commissioned by

the European Commission focussing on the future of new vehicle distribution

in Europe. The consultant’s report, published by Andersen

11 months before expiry of the current block exemption regulation, looks at

possible scenarios for the sale and aftersales care for new cars and commercial

vehicles in 2002 and beyond.

The findings confirm the industry position that an extension

to the current rules best supports consumers by promoting competition and protecting

their interests.

Competition is strong

Under the current system, competition between brands in Europe

is effective, according to the report. It points out that there are a large

number of different brands that operate in each segment of the European market.

In terms of competition between dealers, it confirms that a significant proportion

of sales take place outside dealers’ official territories, particularly in densely

populated areas. This clearly demonstrates the fierce competition between brands

and dealers.

After-sales servicing

Official networks co-exist with independent multi-brand repairers,

fast fit repair chains and other service players, according to Andersen’s findings.

They conclude that there is real competition in after-sales servicing. Consumer

satisfaction The report says that ‘satisfaction of consumers’ needs has reached

an equilibrium where reliability is achieved, choice and product innovation

are high, and where consumer prices are stable.’ In simple terms the current

system is delivering real benefits to consumers.

Lean distribution, lower costs

Cost will be taken out of the distribution network by long-term

stable relationships between manufacturers and their networks. This is the sustainable

way to reduce costs and improve efficiency. Short-term discounts through one-off

deals will not deliver long-term value for consumers.

Commenting on the findings, SMMT chief executive Christopher

Macgowan said, ‘We welcome publication of this report which recognises the benefits

of the current distribution rules. Block exemption is delivering for the consumer

and Andersen agrees. If it ain’t broke, don’t fix it.’

Note to editors:

SMMT has published a guide to the benefits of the current system

called Block Exemption the Consumer Benefits. It is available on this web site

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