WRITTEN QUESTION P-0676/99

by Angela Billingham (PSE) to the Commission

(9 March 1999)

Subject: Restrictive practices in the motor trade

In view of the recent case against Volkswagen AG, where it was found to be breaching EU competition rules by restricting sales to final consumers from other Member States, the large disparity in car prices in the European Union and the growing trend of cheaper grey imports sold direct to consumers by car sellers operating outside official dealer networks (mostly in the Far East), would the European Commission be prepared to make an earlier review of the distribution block exemption which is due to take place in 2001?

Answer given by Mr Van Miert on behalf of the Commission

(31 March 1999)

The block exemption regulation concerning car distribution (Commission Regulation (EC) 1475/95 of 28 June 1995 on the application of Article 85(3) of the EC Treaty to certain categories of motor vehicle distribution and servicing agreements(1)), entered into force on 1 July 1995 and will expire on 30 September 2002. The Commission would refer the Honourable Member to Article 11 of the regulation, which provides that the Commission evaluates on a regular basis the application of the Regulation, with a particular view on price differentials between the different Member States and on the quality of service to final users.

Since 1993, the Commission has monitored car price differences in the Community in its bi-annual report on car prices(2). This publication is based on the recommended retail prices, which the manufacturers submit as of 1 May and 1 November respectively, to the Directorate-General for Competition for their best selling models across the Community. It is true that the Commission has found high price discrepancies between the United Kingdom and the other Member States, which have been partly due to the strength of the Pound Sterling, rather than to changes in recommended list prices.

A growing price transparency, as promoted by the Commission's regular car price reports and the introduction of the euro, is increasingly inducing customers to acquire their vehicles in those Member States where prices and other sales conditions are most favourable. These developments are important market-related factors contributing to a better harmonisation of prices throughout the Community. The Commission has undertaken further initiatives (ex-officio proceedings against certain car manufacturers, telephone hotlines) to ensure this freedom for consumers.

Article 11 of the regulation obliges the Commission to draw up a report on the evaluation of the regulation before 31 December 2000. This report, whose preparatory works will commence in the course of this year, will include the experiences of the Commission and the opinions of associations and experts representing the various interested parties, particularly consumer associations. It is the Commission's intention to ensure that, by is procedure, all elements contributing to the application of the regulation, will be taken due account of, before deciding on any future legal framework for car distribution.

(1) OJ L 145, 29.6.1995.

(2) See for most recent one IP/99/60 of 1 February 1999.