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EC General vertical restraints BER review is not for cars” says FIA Eurocouncil

Date

28 Jul 2009

Sections

Transport

Following the publication of the review of the general vertical restraints Block Exemption Regulation (VRBER) today, FIA calls on Commissioner Kroes not to apply the VRBER to cars but rather maintain a sector specific Regulation for the automotive sector.

The Review of the VRBER - EC 2790/1999 adopted today aims at introducing new rules when the current VRBER expires in May 2010. These rules will regulate sales and distribution competition in markets ranging from cosmetics to internet sales to consumer durables.

The FIA Eurocouncil is concerned that the specific competition policy framework created to govern the automotive sector, set out in the motor vehicle BER - EC 1400/2002 (MVBER) could ultimately also be replaced with the new VRBER’s general rules.

The FIA Eurocouncil’s support for the sector specific Motor Vehicle Block Exemption Regulation stems largely from the essential consumer rights it upholds both in the primary (sales and distribution) and after sales (servicing repair and maintenance) markets, which are not regulated elsewhere. Benefits for consumers include the right to buy a vehicle abroad and have it serviced in another country, the right to use independent garages without losing warranty claims and the right to use usually lower-priced non-original replacement parts for non warranty repairs.

According to Wil Botman Director General of the FIA European Bureau “A car is not a refrigerator or a laptop neither in terms of financial outlay, technological complexity or maintenance. At the same time competition in the automotive sector should be safeguarded to keep motoring affordable for all citizens. Reliance on the application of a general competition framework to the automotive sector would be absolutely dissatisfactory for motoring consumers.”

The competition policy framework governing the automotive sector must deliver affordable mobility to consumers via effective competition between all market players, competitive prices for vehicles and optimal consumer choice and benefit. In the after market given that consumers are obliged by law to maintain their vehicles in line with strict environmental and safety standards, breakdown repair and maintenance services must be competitively priced and capable of catering for all pockets. The framework at present does not yet guarantee that, but with the sector specific rules of the MVBER, the European Commission has moved ever closer to these goals. To cast these protections aside, and rely on a general framework regulation would be both worrisome, and the opposite of better regulation.

Notes for the Editor

The Eurocouncil of the Fédération Internationale de l’Automobile (FIA) as Europe’s leading organisation for motoring consumers -and its member automobile clubs - have as their priority, affordable, safe, clean and sustainable mobility throughout the 27 member States. Some 35 million citizens are members of European FIA clubs and they depend on them for a range of consumer services and advice including breakdown assistance. These motorists are the owners of 20% of Europe’s passenger cars. Across Europe on a daily basis, FIA clubs deal with members’ queries regarding where and how to purchase their vehicles and after sales servicing issues. Moreover, the clubs’ roadside assistance patrols answer to in excess of 10 million rescue calls annually. In the majority of cases, cars are put back on the road to complete the journeys started that day. Thus the FIA is well placed to respond to this consultation first and foremost as a representative of m! otoring consumers who total some 270 million across the EU.

The general VRBER does not contain the sector specific provisions of the MVBER which have contributed to improving the protection of competition in the automotive sector:

• Non-compete rules in the MVBER kick in at 30% where as (in cases in which the manufacturer holds a market share of less than 30%) they can be accepted up to 80% in the VR BER - which would not facilitate multi-branding;
• OE (original) parts suppliers’ ability to sell their products as spare parts to the aftermarket is specifically promoted in the MVBER, and to a greater extent than is the case in the VRBER;
• The MVBER breaks the ‘natural link’ in providing both vehicle sales and after sales services.
• Contract range is provided for;
• Article 5 of the MVBER contains specific conditions not found in the VRBER that uphold motoring consumers’ rights.
• Many of the hard core restrictions of article four, in particular article 4.2, are also not found in the VRBER;
• There is no specific reference made to the automotive sector in the VRBER nor independent operators such the “automobile clubs or "repairers"

For more information contact Sinziana Radu Gille, at Tel 02 282 0816 or s.radu(at)fiabrussels.com

http://www.fia.com/en-GB/Pages/HomePage.aspx

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