Consumers vote to keep the motor industry block exemption

A report that focuses on attitudes to new car distribution

shows that consumers want to keep the industry’s ‘block exemption’. The findings

contradict the view that dealer networks have failed car buyers and that the

distribution system should be scrapped in 2002.

Published by Taylor Nelson Sofres, the report follows extensive

research in the five major European car markets, France, Germany, Italy, Spain

and the UK. In each country, consumers felt that selective and exclusive distribution

best suited the technical complexity of motor vehicles.

Strong competition between different makes of car was highlighted

as a key benefit of the current system. The convenience of dealer networks was

also felt to be important and over a third of buyers reported visiting at least

two dealerships of the same make to research and negotiate the best possible

deal.

Other findings show that the so-called ‘sales and servicing

link’ is highly valued. Franchised dealer services are seen as part of the overall

package when buying a new car. Consumers also recognise the role of manufacturers

in maintaining high standards of dealer selection, training and after sales

care.

Facts and figures:

1. 80 per cent of Europeans think that competition between
   
   brands is strong. In the UK the figure is 73 per cent. 76 per cent considered
   
   that competition has increased during the last decade.
2. 59 per cent of Europeans and 55 per cent of UK customers
   
   prefer to service within the franchised network after expiry of the warranty.
   
3. 71 per cent of all polled agree with the statement ‘When
   
   I buy a car I also buy the dealership for maintenance of the brand’.
4. 90 per cent feel it is important that there is a local brand
   
   specific outlet in case of problems when travelling locally and abroad.
5. 83 per cent polled agreed with the statement ‘Getting the
   
   maintenance or repairs carried out by a garage of the same make, it is for
   
   me an additional guarantee’.
6. 35 per cent of Europeans visited at least two dealerships
   
   representing the make they bought. 71 per cent of UK customers negotiated
   
   on price.
7. Consumers rejected new car sales through supermarkets. They
   
   felt less confident about their ability to match franchised dealer standards,
   
   reporting negative feelings for quality of aftersales service, repair safety
   
   and provision of technical information.

Commenting on the research, SMMT Chief Executive Christopher

Macgowan said, ‘These findings fly in the face of reports that block exemption

works against the consumer interest. Car buyers here and in the rest of Europe

recognise that competition is strong and are not afraid to bargain hard for

the best deal. They also understand the technical complexity of a unique product

that is best served by a well-trained, dedicated sales and aftersales network.

This report shows that consumers are keen for it to continue.’

* * * * *

Notes to editors.

1. Taylor Nelson Sofres Automotive is the fourth largest market
   
   research company in the world. www.tnsofres.com
2. Over 800 new car buyers were polled in each country.
3. The five countries polled represent over 80 per cent of
   
   new car sales in Europe.
4. Block exemption operates throughout the European Union.
   
   The rules permit selective and exclusive distribution of motor vehicles through
   
   franchised dealer networks. Similar systems operate in the US and Japan.
5. The current block exemption regulation, EC 1475/95, will
   
   be reviewed in September 2002.