EU Revises Antitrust Rules For Car Sales, Repairs
May 27 2010 - 4:29AM
Dow Jones News
The European Commission Thursday revised its antitrust rules for
car sales and repairs, making it harder for automakers to dictate
where cars are fixed and which spare parts are used.
The commission, the European Union's regulatory arm, for years
has tried to open up the EU automotive market to more competition,
restricting pacts between car manufacturers and dealerships and
trying to encourage more sales across the bloc's borders.
The latest revision to the so-called "block exemption" for
automakers -- a kind of antitrust roadmap for the industry --
restricts exclusive agreements between automakers and authorized
repair shops. The rules also make it easier for garages to use
spare parts from independent manufacturers.
"I strongly believe the new framework will bring tangible
benefits for consumers by bringing down the cost of repairs and
maintenance that represent an excessive share of the total cost of
a car over its lifetime," the commission's top antitrust official,
Joaquin Almunia, said in a statement.
The commission estimates that repair bills account for 40% of
the total cost of owning a car. Over the past few years, it has
opened antitrust cases against four automakers, Fiat SpA (F.MI),
Toyota Motor Corp. (TM), General Motors Co., and the former
DaimlerChrysler AG (DAI), to ensure they give independent garages
access to the technical information needed to make repairs.
Under the new antitrust guidelines, an automaker with more than
a 30% share of a national market won't be able to force customers
to use authorized repair shops. Car manufacturers also will be
barred from making warranties conditional on having services like
oil changes performed at authorized garages. These new rules will
come into force on June 1.
For car sales, the commission revised its antitrust guidelines
to treat the automotive sector like any other business. The
commission's previous guidelines had tried to force automakers to
do more business with dealers that sell multiple brands, rather
than just one.
Automakers imposed new conditions in response to this rule,
forcing dealers to spend more on presentation of their brands. This
pushed up overall car distribution costs by 20%, according to the
commission.
Car manufacturers now will have more flexibility to organize
their sales networks, using both single-brand retailers and
dealerships that sell multiple types of cars. Still, automakers
with more than a 30% market share in a single country won't be able
to insist on single-brand dealerships. Also, manufacturers will
only be able to restrict dealers to exclusive sales arrangement for
five years. These new distribution rules will take effect in June,
2013.
The commission noted that if these sales arrangements lead to
competing brands being shut out of the market, it could subject
individual car manufacturers to stricter antitrust regulations by
excluding them from the industry's block exemption.
-By Adam Cohen, Dow Jones Newswires; +322 741 1486;
adam.cohen@dowjones.com
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