FIA Response to the Commission Report on Block Exemptions
Publication date: 29 May 2008
European Commission’s Evaluation of the Motor Vehicle Block Exemption Regulation must safeguard Consumer Choice and affordable mobility beyond 2010
FIA clubs call on the European Commission to build on the existing motor vehicle block exemption regulation’s (BER 1400/2002) regulatory framework and deliver further improvements to safeguard consumer choice and rights in the automotive sector
As a leading mobility organisation, FIA and its member automobile clubs are committed to ensuring more sustainable mobility for the motoring consumer. With some 34 million citizens in membership, FIA clubs in Europe deal daily 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 their journeys.
FIA is committed to safeguarding consumers’ freedom to choose vehicles that are safe, clean and affordable to purchase and maintain. Motor vehicles are the preferred transport mode accounting for 80% of all trips and the second largest investment for the average household. Unlike other highly complex products, motor vehicles for reasons of safety and the environment must be maintained during their lifetime to meet stringent legally required standards, tested on a regular basis. This is a matter of life or death for both car owners and other road users. Over the life of a vehicle the repair and maintenance will cost as much as the purchase price if not more.
In looking to the future, the European Commission’s (EC) evaluation notes various options: renewal and extension of the existing motor vehicle BER is not preferred; a case is made for reliance on general vertical restraints BER (2790/1999) ; and in the absence of any BER, the reliance on articles 81 and 82 of the treaties. The current general vertical restraints regulation does not address issues in detail specific to the automotive sector (such as access to technical information needed for repair). Supplementary provisions for the automotive sector would have to be included. In the absence of hard core restrictions set out in a BER, reliance on the treaty articles 81 and 82 would mean going to court for each individual complaint, thus making complaints prohibitively expensive for consumers and operators who are often small and medium sized enterprises. The current BER sets out clearly which rules must not be broken.
“Faulty vehicles must be repaired as efficiently as possible and at affordable prices both for the labour and the parts used. Given that the average age of a car in Europe is eight years old (indeed in some countries the average age is 18 years), many owners are not prepared to pay the premium rates of the authorised repair network to maintain their vehicles. Thus European consumers must be free to have their vehicles serviced, maintained and repaired at a workshop of their choice, using parts of their choice and affordable for their pocket” said Wil Botman, Director General, FIA European Bureau. “Any change to the current regime must bear in mind the fact that repair and maintenance are key cost issues for most motorists. Let’s not forget that the justification of any BER is consumer benefit.”
Consumers want access to conveniently located repairers (ideally within a radius of 40 minutes from home) when they are in need of repair work. Evidently the more competition in the market from both the vehicle manufacturers and independent repairers, the more consumer choice can influence the quality and affordability. Without the BER and specific consumer safeguards, the cost of maintaining cars could increase and competition in the repair market looks set to be even further curtailed.
The Motor Vehicle BER remains the only regulation fully functioning Europe wide that safeguards key consumer rights concerning the purchase, maintenance and repair of motor vehicles. It has visibly improved consumer choice and prices with regard to the purchase of new vehicles. It has brought about multi-brand stores and even car purchasing over the internet. The mere existence of the BER has put a brake on many potential abuses of the competition in the automotive sector. Removal of the BER would require the implementation of a raft of other measures that should be already functioning by 2010 to secure all the protections contained in the MV BER covering consumer issues such as warranties and extended warranties, distance selling of vehicles over the internet, contractual relations between manufacturers and dealers, liberalisation of spare parts used for repair, legislation giving comprehensive access to data needed to carry out repairs etc. Effectively the current regulatory framework would be replaced by a legislative patchwork of measures which could weaken competitive market conditions. Surely, this is not what the European Commission means by “Better Regulation”?
Any review of the BER should ultimately seek to strengthen the competitiveness of all stakeholders in the automotive sector. Securing access to technical information is crucial. With the on-going development of in-car electronics systems and technologies, standardised open access to vehicle manufacturers data is crucial if independent repairers including the automobile clubs (members of the FIA) are to have a chance of competing and remaining in business to the benefit of consumers. Application of a general BER would give vehicle manufacturers the benefits of exemption from normal competition without the obligation of respecting specific conditions needed by independent operators and consumers.
Rather than getting rid of this specific BER more should be done to improve it giving greater legal certainty and clarity to consumers and operators alike. Warranties and in particular extended warranties as well as recalls still require further clarification and transparency
Mobility, competition and consumer freedom of choice are essentials for a fully functioning market. Until the sector specific measures contained in the BER are adopted and implemented in other legislation, the existing BER should continue and be improved
Notes for the Editor
Since 2002 the Motor Vehicle Block Exemption Regulation (BER) EC N° 1400/2002 has provided the regulatory framework for motor vehicle distribution and servicing agreements. Important for consumers and the automotive aftermarket, this Regulation contains provisions designed to safeguard choice and competition both in the distribution of new vehicles and the aftermarket servicing and repair of vehicles. Notably, the MV-BER has succeeded not only in achieving better price parity EU wide but also in assuring more equal access for market operators to vehicle manufacturers’ technical information needed to compete with the official networks in providing consumers with choice and competitively priced aftermarket services. This access covers training, diagnostic tools and test equipment, spare parts and repair information. All is not perfect but the situation is definitely better than before. This important piece of legislation is due to expire in May 2010
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