New EC Automotive Competition Rules Are Welcome

Date

27 May 2010

Sections

Transport

FIA automobile clubs, welcome Commissioner Almunia’s decision today to retain sector specific rules to regulate competition in Europe’s automotive sector as of 1st June 2010. From the outset of the debate on renewal of the motor vehicle Block exemption regulation (BER) - EC N° 1400/2002, due to expire on 31st May 2010, FIA Automobile clubs, as defenders of affordable mobility and providers of breakdown assistance, have insistently called for continued sector specific regulation that is sufficiently robust and future proof to ensure safe clean and affordable motoring choices for consumer in the coming decade.

The new competition regime is built on number of elements: no operator will benefit from exemptions if they enjoy a market share of 30% or more; a so-called mini BER will address rigidities still existing in the repair and maintenance services aftermarket in particular, the distribution of spare parts market; a prolongation of Regulation 1400/2002 till 2013 for the new car sales market should give way to the application of the general vertical restraints regulation once manufacturers and dealers have agreed a restructuring of distribution chain; and guidelines, binding on the European Commission, identify practices in both the aftermarket and primary market (as of 2013) that will be henceforth considered anti-competitive and subject to further scrutiny.

In this time of economic crisis when motorists drive older cars requiring more frequent repair, FIA welcomes recognition of “the automobile clubs” and all “independent operators” as having a role to play in ensuring consumers’ rights to affordable, safe and clean personal mobility. The car, most Europeans’ preferred transport mode, is their second most important purchase after their homes. Unlike other white or hi tech goods, today’s cars (which are actually pc’s on wheels) must be maintained and repaired mandatorily in line with ever more stringent safety and environment legislation. As such affordable options must exist to suit all pockets.

Consumer confidence is key to sustaining Europe’s fragile automotive sector Warranties given with new vehicle purchases should not tie customers unfairly to the vehicle manufacture even for non warranty work thus effectively excluding customers from the aftermarket to the detriment of consumer choice and the independent repairers’ customer pool. That the Commission addresses this competition problem in the new guidelines is welcome but it must be properly monitored.

Given the complexity of cars on the road today, virtually no repair job even at the roadside, is possible without having access to the full range of technical information owned by the various vehicle manufacturers. Access to technical information by independent operators is vital if consumers are to benefit from vibrant competition, choice and lower repair and maintenance costs. Recognition of the importance of technical information and access to it by the independent after market in the Commissions guidelines without a hard core restriction in the mini BER will require close monitoring and enforcement of the rules to ensure that any abuse is swiftly and efficiently sanctioned.

With the planned phase-out of the current BER, consumer choice in the primary market (new car sales and distribution) will be limited to single brand showrooms. Multi-brand showrooms that exist today are destined to disappear. For the sake of affordable consumer choice, the Commission spend the next three years reflecting further on competition regulation in the primary market.

According to Wil Botman, FIA European Bureau Director General, “Sustained competition in a dynamic automotive sector that is extremely sensitive to economic and technological developments must be ensured by continuous monitoring and efficient enforcement of the rules at all levels if consumers are to benefit from a level playing field in which consumer rights to safe, clean and affordable choices are assured in the coming decade. For the sake of our 35 million members, FIA clubs will remain vigilant and hold Commissioner Almunia and DG Competition to their commitment to monitor and enforce the new rules in the interest of lower prices, better services and choice.”

ENDS

Notes for editors:

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.

The new sector specific rules on automotive competition are good for FIA members and all 270 million motoring consumers in Europe

For more information contact:

Sinziana Radu Gille Tel 02 282 0816 or s.gille(at)fiabrussels.com