SMMT New Car Code of Practice drives OFT awareness campaign

07 December 2004 #SMMT News

SMMT’s New Car Code of Practice will be the centrepiece of today’s launch by OFT to promoteits new Consumer Codes Approval Scheme to the public. The motor industry code was the first to receive full approval from the OFT in September and is now being used to promote the message that you can ‘buy with confidence’ from companies that display the OFT-approved logo.

Commenting on today’s launch, SMMT chief executive, Christopher Macgowan said, ‘We are fiercely proud to have been the first industry to gain full approval for our Code of Practice. So we are delighted that the OFT has chosen the motor industry to raise awareness of its wider codes of practice campaign. Car makers have demonstrated that there is a genuine will to improve customer care and we hope our lead is followed by others.’

Full approval for the SMMT Code came after SMMT members demonstrated a commitment to tough new OFT criteria for all industry consumer codes. These were created by the regulatory body to tighten consumer protection and offer peace of mind to consumers dealing with a code subscriber.

For carmanufacturers this meant new measures such asregular 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. Measures include ensuring the delivery of high quality products, offering water-tight warranties, and provisions relating to the 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. In addition, consumers will be made aware of protection offered by the new Code through an advertising campaign that includespetrol pump inserts.

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

The award of Stage Two was the final step in the codes process. It is given only after a code subscriber has supplied the OFT with evidence that members are operating the principles of a code in practice.

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).

The SMMT New Car Code of Practice and Brief Guide can be viewed at

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.

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