WRITTEN QUESTION P-0408/02

by Brice Hortefeux (PPE-DE) to the Commission

(11 February 2002)

Subject: Automobile distribution directive

The current system of distributing cars through manufacturer networks is applied in most countries in Europe and throughout the world, with the exception of a few states including the United Kingdom, which admittedly no longer has a national automobile industry.

How can one fail to see that this system still exists because of the benefits consumers derive from it in the form of keen price competition, the spread of innovation and, above all, the certainty that they can have their vehicles serviced and repaired by competent professionals at a nationwide network of agencies?

Is the Commission not afraid of jeopardising the system of nationwide distribution networks, thus endangering an aspect of economic life in the less populated regions and damaging the link between vehicle purchase and after-sales service which is a guarantee of safety for all consumers?

Does it not fear that consumers in rural areas will once again be put at a disadvantage vis-à-vis those who live in towns?

Is it not afraid, in more general terms, that a radical reform will hasten the already serious economic decline of rural areas, as happened when the number of service stations was halved?

Answer given by Mr Monti on behalf of the Commission

(7 March 2002)

The proposal for a Regulation on automobile distribution, adopted by the Commission on 5 February 2001, is the culmination of an in-depth process of analysis and consultation which began over two years ago. The report evaluating the present system, adopted by the Commission in November 2000, revealed that the block exemption allowed by Commission Regulation (EEC) No 1475/95 of 28 June 1995 on the application of Article 85(3) of the Treaty to certain categories of motor vehicle distribution and servicing agreements(1) had failed to achieve some of its objectives, particularly as regards the creation of an internal market (as evidenced by the persistence of large price differentials between Member States) and the benefits of the present system to consumers.

The Commission is conscious of the need to maintain a network of automobile distribution and after-sales service that provides good geographical coverage. The reorganisation of the link between sales and after-sales service, the measures provided for independent repairers and the promotion of multidealership will be more effective in preserving such a network than the system under the present Regulation.

On the sales side, multidealerships have the advantage of enabling consumers to compare different manufacturers' models. The proposed Regulation is also based on an approach which avoids unnecessary costs and gives dealers greater freedom to organise their businesses. The positive effects of this system can be seen in the Scandinavian countries, the main area of the European Union where multidealerships have so far been introduced. Because of the low population density, dealers have to sell several makes in order to be viable. In these countries, where huge areas are very sparsely populated, such economies of scale have made it possible to maintain and expand dealerships that adequately serve rural districts.

As regards the need to maintain a sufficient level of after-sales service, it should be noted that under the new regime dealers who wish to specialise in vehicle sales will be able to choose between providing after-sales service themselves and contracting it out to one or more official repairers that meet the technical standards set by the manufacturer. Dealers who contract out after-sales service must supply the consumer with details of the official repairer(s) before concluding the sales contract. This will ensure that, wherever they live, the clients of each distributor will be able to find at least one official repairer.

The proposed new regime also means that existing dealers, whose contracts would be terminated as part of the significant cuts in the number of dealers being made by certain manufacturers, can continue to operate as official repairers for their make of vehicle. The general level of technical expertise on the market will therefore be maintained, as will the existence of a dense network of official repairers, supplemented by independent repairers with greater technical expertise, helping to ensure a quality service and promote road safety through a system that continues to provide comprehensive geographical cover.

(1) OJ L 145, 29.6.1995.