Local view for "http://purl.org/linkedpolitics/eu/plenary/2010-05-05-Speech-3-788"
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"en.20100505.78.3-788"2
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"Mr President, the current Motor Vehicle Block Exemption Regulation expires on 1 June this year, and we need to adopt a new regulation before that date. The College of Commissioners has placed this issue on the agenda of our meeting of 26 May.
In a competitive market such as the car market, competition law should not interfere with the balance of powers between the different contracting parties. To do so would be intrusive. We have to be proportionate when we interfere in how markets work.
In the process of consultation we also learned some other, maybe less positive things: unlike car prices, the cost of the average repair job has actually risen over the past years. Repair and maintenance is very important for consumers: not only for reasons of safety and reliability, but also because repair bills account for 40% of the total cost of owning a car. Unfortunately, the ability of independent garages to compete with authorised repairers is still impaired by a number of restrictions, including limited access to spare parts and to technical information. Therefore, our reform intends to allow independent garages better access to spare parts and technical information and to prevent them from being shut out of the market by other, newer practices. This will result in better-quality repair services and lower prices.
To conclude, I strongly believe the new framework will be more favourable to consumers. Our main priority is to increase competition in the after-sales market – in repairs and servicing – where it is most lacking. Although vehicle manufacturers may be in a strong commercial position vis-à-vis dealers, they compete fiercely with each other, and today there is no need to deviate, to preserve competition on these kind of agreements, from the Block Exemption Regulation for Vertical Agreements, which was adopted recently by the Commission and will also come into force at the end of this month. Indeed, the Commission, and in particular my services, DG Competition, will monitor the sector very carefully, and there should be no doubt about the Commission’s determination to enforce competition rules and take necessary steps if any serious breaches or shortcomings are identified.
The proposal that is now being discussed within our services and, in a few days, with our cabinets – preparing the collegial discussions – is the result of an in-depth analysis of the sector. The public consultation process started in June 2006. Three and a half years later, in December last year, the Commission published the draft block exemption and guidelines. Throughout this process, stakeholders, the European Parliament and the Member States have all been closely involved, and a lot of arguments have been taken into consideration. A number of debates, workshops and initiatives have also taken place, including here in Parliament. The latest took place on 12 April this year at the ECON Committee. What are the main conclusions of this long consultation process?
First, we learned something positive: that consumers in Europe enjoy vigorous competition in the car sales market. In our annual car price reports we have been reporting on 80 car models from around 25 manufacturers – and prices are not the only factor which tells us that competition is healthy. There is also more choice than there was 10 years ago, with more brands available for each type of car. In these circumstances it would be difficult to suggest that any carmaker would be able to exercise a dominant position, be it individually or collectively.
The current regimes contain sector-specific rules that made sense at that time (in 2002) when a wave of consolidation was expected in the vehicle sector. This consolidation period did not materialise, and instead what we have today is a very competitive market. By allowing more flexibility for the distribution of vehicles, the proposed changes will restore manufacturers’ incentives to reduce the cost of selling cars. Allow me to recall that distribution costs make up, on average, 30% of the price of a new car. By reducing those costs, manufacturers will improve their competitive position, with resulting benefits for consumers.
I am perfectly aware that there are some concerns about proposed changes relating to multi-brand sales and contractual protection for dealers, and both of you have mentioned these concerns. Let me stress that multi-branding exists – and will continue to exist – where market reality calls for it. This is the case in countries with very large dealers that have the capacity to distribute several brands – for example in the UK – and it is also the case in sparsely-populated areas, where it makes economic sense for the dealers to sell different brands from the same site.
This was the reality before the current block exemption was adopted in 2002, and it remains the reality eight years later, but then, as now, single branding was the most common distribution model. What we have observed is that carmakers have increasingly resorted to other forms of distribution, including manufacturer-owned outlets.
The evolution of distribution in Germany, for instance, is symptomatic of this trend, with 67% of cars sold through dealer networks, as opposed to 90% before the Regulation came into effect in 2002. Nonetheless, we have responded to concerns expressed during the consultations, including the consultations that took place here in the Parliament, and a number of safeguards have been introduced with regard to multi-brand dealerships.
Let me also underline that we propose a transitional phase, during which the current regulation will be in force until the end of 2013 for the car distribution market, to allow sufficient time for dealers who invested in multi-branding to amortise their investments.
Concerning the reason why we are proposing to do away with clauses granting contractual protection to dealers, it is simply because competition law is not the appropriate instrument to address eventual imbalances between contractual parties. These issues, as was discussed when we were preparing Regulation (EC) No 1/2003, belong to the sphere of commercial law."@en1
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