Consumers are the winners, as SMMT New Car Code of Practice is first to gain full OFT approval

27 September 2004 #SMMT News

Consumers are the winners, as SMMT New Car Code of Practice is first to gain full OFT approval


New car buyers can expect higher standards of customer care from car makers, with news that the Office of Fair Trading (OFT) has fully approved the SMMT New Car Code of Practice. The SMMT-sponsored Code is the first in any industry to gain ‘Stage Two approval’ and can now bear the coveted OFT logo.


Full approval comes after SMMT members demonstrated a commitment to tough new OFT criteria for all industry Codes. These were laid down by the OFT to tighten consumer protection and offer peace of mind to consumers dealing with a Code subscriber.


For car makers this meant new measures such as the regular monitoring of conduct and financial penalties for those who fail to deliver. The new Code also clearly sets out its stall by making a set of promises from manufacturers directly to car buyers. Key measures include ensuring the delivery of high quality products, offering water-tight warranties, availability of replacement parts, advertising and complaints handling.


The Code will be distributed to more than a million new car buyers in its first year of operation.


Christopher Macgowan, SMMT chief executive said, ‘Car makers have raised their game and created a Code of Practice with teeth. The Office of Fair Trading demanded a more robust Code and the industry has delivered. We are committed to this tough new regime which can only be good news for the consumer.’


Stage Two approval comes after the OFT awarded The SMMT New Car Code of Practice Stage One status in June 2004. This meant the industry’s draft Code had met all core OFT criteria and set it on the path to full approval.


The award of Stage Two marks the final step. It is given only after a Code subscriber has supplied the OFT with evidence that members are operating the Code’s principles in practice.


SMMT chief executive Christopher Macgowan added, ‘We are proud of this landmark achievement for the motor industry. Car makers have demonstrated that there is a genuine will to improve customer care and we hope this serves as an example to others.’


All volume car makers are signed up to the Code, as are the vast majority of smaller manufacturers. In total, 99.7 per cent of the 2.5 million new car market will be underpinned by the Code’s provisions.


Formerly, SMMT was signatory to the Code of Practice for the Motor Industry. Operated since 1976, this was jointly administered by the Retail Motor Industry Federation (RMI) and the Scottish Motor Trade Association (SMTA).


Notes to editors:

1. The Regulation and Compliance Unit (RCU) at SMMT will monitor the performance of Code subscribers via referrals made to its conciliation and arbitration service. A system of penalty points will be awarded to manufacturers where they breach any of the Code’s provisions.

2. In the event that a manufacturer accumulates 200 penalty points in any given three month period, the Independent Compliance Assessment Panel will sit to decide on financial penalties. Meetings must be attended by a company director of the car maker concerned. Fines of between £1,000 and £5,000 will be imposed by the Panel for each Code breach, with all proceeds donated to motor industry charity BEN.

3. At any time a Code subscriber may be reported to the OFT by the RCU for a ‘serious breach’ of any provision.

4. The RCU unit at SMMT must report to the OFT on a six-monthly basis, giving details of all Code subscribers’ penalty points tally. The OFT will also monitor the performance of individual car makers via random surveys to 250 customers of four manufacturers. This will also be undertaken on a six-monthly basis.

For more see: the New Car Code website

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