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European Commission wants dealer and manufacturer deal

During a meeting of the CARS 2020 Sherpa Group on Tuesday, the European Commission reiterated its desire for dealers and manufacturers to reach an agreement on how to improve vertical relations in the sector.

The Commission informed CARS 2020 stakeholders that work still needs to be done on the issue of vertical agreements. The topic is very important for the dealers, who made it clear since the beginning of CARS21 discussions – now followed by CARS 2020 – that it is their priority to reach an agreement on this issue. In its CARS 2020 Action Plan, the Commission noted that:

The changes in the competition law framework for the distribution of motor vehicles in Europe (further to the expiry of the Motor Vehicle Block Exemption Regulation 1400/2002) may have an impact on the organisation of the vertical relations between vehicle manufacturers and distributors. In order to manage this transition in a balanced way, a self-regulatory initiative is encouraged by the Commission.

A majority of CARS 2020 stakeholders have expressed their strong support for a voluntary code of conduct in the field of vertical agreements. The Commission is currently examining different options to re-launch the dialogue between the parties concerned. At yesterday’s meeting, the Commission indicated that is has ‘other political tools’ at its disposal which could be used in case the dialogue is not successful. This is a clear message to the manufacturers, who have again been invited to reach an agreement with dealers on a code of conduct.

The European Car Dealers’ (ECD) division of CECRA welcomes this as a step forward in improving vertical relations in the automotive sector. The division has submitted concrete proposals to the manufacturers with regard to the self-regulatory approach promoted by the European Commission. In particular, the ECD and CECRA are asking for:
the freedom to transfer the sales contract to a member of the authorised network
the freedom to sell different brands at one site (multi-branding)
the compensation of investments after termination of sales contract by the manufacturer which was not caused by dealer.