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Comment on EU block exemption review and service regulation

Friday, June 13 2008 :: Keywords: car servicing :: Permalink

An initial reaction to the current state of play in the run-up to the revision or abolition of the automotive block exemption: I'm inclined to agree with the European Commission's desire to simplify things, having found some of the 2002 Regulation's clauses irrelevant. It's clear that the 2002 block exemption gave vehicle manufacturers an opportunity to tear up old contracts and write new, sometimes more onerous ones. Also, that it has facilitated none of the retailing innovation or cross-border investment by dealers that the EC hoped for.

There has been no significant re-balancing of power between supplier and retailer. The consumer has benefited from more price competition, but thanks to oversupply, not regulation reform.

So why keep an automotive BER beyond 2010? Because franchised dealers prefer the devil they know is not a wholly convincing argument in favour. They enter franchise agreements voluntarily. The official argument for the original BER - that cars are dangerous, so safety needs the expertise of tied service and repair channels - wasn't even mentioned last time around, and has anyway been superseded by efforts to dilute these tied channels' monopolies.

This should be crux of the matter for the Eurocrats and ministers now considering the BER review report. CECRA and the other members of the European Right to Repair campaign have right on their side, because their members can offer consumer value which dealers' with their higher cost base can't usually match. Provided, that is, that independent repairers can access the requisite vehicle data and codes at a fair price as is assured (though not fully) by the current BER. Under current EU emissions regulations the 'right to repair' is only assured in respect of Euro 5 vehicles. That right must be extended to pre-Euro 5 vehicles if the BER is abolished, or the baby will be thrown out with the bathwater.

With independent repairers' rights to market access come responsibilities, which under the BER have been left to national regulations. Which brings me to the muted response to the new volntary Motor Industry Code of Practice (http://service.motorindustrycodes.co.uk/). To quote its sponsors, “It's a straightforward, cost effective scheme with no rigorous pre-entry audits or overblown costs … For garages who engage and comply with the code, nothing much changes.”

The same could be said for their customers. The code's low cost (£75 to join, £30 for the code itself and briefing material, and £175 for biennial inspection charges) may encourage more independent garages to apply than have done for the BSI's more costly PAS 80 Kitemark. But why the consumer bodies were ready to welcome so anodyne a proposition, given the weight of their previous verdicts on the misdemeanours of the garage trade, is not immediately clear. Maybe they couldn't face any more meetings on the subject.

Toby Procter
13 June

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