European possibilities and restrictions under Block Exemption Regulation 1400/2002 Jürgen Creutzig,...

European possibilities and restrictions under Block

Exemption Regulation 1400/2002

Jürgen Creutzig, President, European Council for Motor Trades and Repairs (CECRA), Brussels

Prof. Dr. Jürgen Creutzig

The Annual Conference of Norges Bilbransjeforbund, Oslo, 29th March 2006



ContentContent

1.1. IntroductionIntroduction2.2. General remarksGeneral remarks3.3. Vehicle salesVehicle sales4.4. ServiceService5.5. Spare partsSpare parts6.6. Technical informationTechnical information7.7. Final remarksFinal remarks

1. Introduction

European UnionEuropean Union 25 Member States25 Member States 435 Mio inhabitants435 Mio inhabitants Approx. 190 Mio car parkApprox. 190 Mio car park Approx. 14,5 Mio car registrations p.a.Approx. 14,5 Mio car registrations p.a. Per 1.000 inhabitants 550 new carsPer 1.000 inhabitants 550 new cars



Who is CECRA?Who is CECRA? 350.000 enterprises for motor trades and 350.000 enterprises for motor trades and

repairsrepairs 520 billion € turnover in 2004520 billion € turnover in 2004 2.450.000 employees2.450.000 employees 0,6% - 1% of turnover net profit before tax0,6% - 1% of turnover net profit before tax



1. Introduction

Contents of BER well known, transformation Contents of BER well known, transformation insufficientinsufficient

Over 3.000 complaints / demands to Over 3.000 complaints / demands to CommissionCommission

Manufacturers‘ choice: selective system Manufacturers‘ choice: selective system (except Suzuki)(except Suzuki)



2. General remarks

Increasing activities of intermediariesIncreasing activities of intermediaries Independence of dealers / repairers from Independence of dealers / repairers from

their manufacturertheir manufacturer Three departments – three independent parts Three departments – three independent parts

of the contractof the contract



2. General Remarks

Separation of distribution / serviceSeparation of distribution / service Transfer of sales department / no Transfer of sales department / no

continuation of service departmentcontinuation of service department Last step: location clause 01.10.2005Last step: location clause 01.10.2005



2. General remarks

To stop manufacturer selling new cars To stop manufacturer selling new cars directly to end-usersdirectly to end-users

Leasing companies to misuse their Leasing companies to misuse their opportunity to sell new carsopportunity to sell new cars



2. General remarks

StandardsStandards In principle positive, but often excessive and In principle positive, but often excessive and

not necessarynot necessary Can be changed unilaterally by manufacturerCan be changed unilaterally by manufacturer To be reviewed by manufacturers and their To be reviewed by manufacturers and their

dealers‘ associationsdealers‘ associations



3. Vehicle sales

Multi brandingMulti branding No contractual rule concerning adaptation of No contractual rule concerning adaptation of

standardsstandards No contractual rule concerning adaptation of No contractual rule concerning adaptation of

sales targetssales targets Standards for Corporate Identity (Blue box, Standards for Corporate Identity (Blue box,

uniforms, colour of carpets, etc.)uniforms, colour of carpets, etc.)



3. Vehicle sales

Cross border sales : boni and premiumsCross border sales : boni and premiums For sales: all vehicles wherever boughtFor sales: all vehicles wherever bought For purchase: same, no difference possibleFor purchase: same, no difference possible



3. Vehicle sales

MarginsMargins Reduction – nothing to do with BERReduction – nothing to do with BER Can be changed unilaterally by Can be changed unilaterally by

manufacturer: to dodge cancellation clausemanufacturer: to dodge cancellation clause



3. Vehicle sales

Transfer of rights and obligationsTransfer of rights and obligations Higher bonus to dealer if he runs a repair Higher bonus to dealer if he runs a repair

shopshop



3. Vehicle sales

General remarksGeneral remarks Cancelled dealers to remain in the networkCancelled dealers to remain in the network Less application of independent repairers Less application of independent repairers

than expectedthan expected Qualitative selective systemsQualitative selective systems Too high standards to reject outsiderToo high standards to reject outsider



4. Service

StandardsStandards Not necessary: to buy tools / equipment / rental Not necessary: to buy tools / equipment / rental

cars / car washcars / car wash To refer to the result, not to the manner how to To refer to the result, not to the manner how to

reach itreach it Too expensive – prices go upToo expensive – prices go up Not to be disproportionate: too high stock of Not to be disproportionate: too high stock of

spare parts, minimum square meterspare parts, minimum square meter



4. Service

Multi brandingMulti branding Corporate Identity hinders multi branding: Corporate Identity hinders multi branding:

colour of tiles, carpets / lightening / colour of tiles, carpets / lightening / notepaper / advertising etc.notepaper / advertising etc.

IT systems: insight into data of other brands / IT systems: insight into data of other brands / price formationprice formation



4. Service

General remarksGeneral remarks Enormous price differencesEnormous price differences Qualitative selectionQualitative selection Separated contracts without serviceSeparated contracts without service



5. Spare parts

Specific problemsSpecific problems Stock: minimum number of spare partsStock: minimum number of spare parts No discrimination: to include all repairshops No discrimination: to include all repairshops

in logistic system (two-stage)in logistic system (two-stage) Suppliers of spare parts: to declare quality, Suppliers of spare parts: to declare quality,

traceability and compatibilitytraceability and compatibility



5. Spare parts

General remarksGeneral remarks Survey of IKA Access to technical Survey of IKA Access to technical

informationinformation Transformation only by few manufacturers Transformation only by few manufacturers

(black clause, Art. 4 (2))(black clause, Art. 4 (2))



6. Technical information

Different channelsDifferent channels Supermarket / Internet dealersSupermarket / Internet dealers Location clause 01.10.2005Location clause 01.10.2005



7. Final remarks

Fierce competition – from Asia to EuropeFierce competition – from Asia to Europe To work for the time beyond 31.05.2010To work for the time beyond 31.05.2010 Strong dealer and repairer associationsStrong dealer and repairer associations



7. Final remarks

European possibilities and restrictions under Block Exemption Regulation 1400/2002 Jürgen Creutzig,...

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