EU set to decide on automotive sector

Publication date: 08 July 2009

Ahead of the formal adoption of policy documents by the European Commission determining the future of the Motor Vehicle Block Exemption Regulation, FIA Eurocouncil Chairman Werner Kraus met European Competition Commissioner Neelie Kroes. Kraus was quick to point out the need for specific rules protecting competition and consumers in the automotive sector. Without the so-called “BER” rules, FIA clubs fear drivers will have less choice in the sales market and could be forced into using more expensive official dealerships and spare parts.
 
The "BER", as it is called in Brussels jargon, is a complicated piece of EU legislation, the 2002 Motor Vehicle Block Exemption Regulation – MVBER. Thanks to persistent lobbying by the FIA and other stakeholders, the Commission appears to have moved away from its initial evaluation, issued in 2008, that the sector specific regulation BER was no longer needed. Under a sunset clause, the rules on sales, distribution, and after-market repair and maintenance would have to disappear from May 2010 if no specific action is taken by the Commission.

"Neelie Kroes, once again, heard the message that there is a need for specific rules for a BER regulating the automotive sector," Kraus told us after a meeting at the end of June with the Commissioner attended by some 15 executives from car manufacturers, automobile repairers and dealerships. The FIA was the only organization representing the voice of consumers - car owners. "Car makers were quick to argue against any specific regulation claiming that the success of the MVBER made new rules unnecessary. In my view, a regulation is still needed for those who do not respect the rules," he explained.

Werner Kraus sees a lot of progress since the first meeting with Kroes at the High Level Roundtable Group back in February 2009. "Things have moved forward. The lobbying undertaken was vital in making these roundtable meetings possible. Previously it was more or less clear that the BER would disappear," he continued. Following the latest meeting at the end of June with Kroes, Kraus now expects a proposal, perhaps as soon as 22 July, with a transition period allowing EU officials the time to find a more detailed solution. "Experts need to discuss more to get the details right," said Kraus. "The Commission wants clear and easy rules, not in such a complex form as they are today."

"Commissioner Kroes will not get rid of the BER in May 2010. That's my feeling," he said. The Region I President noted that the Commissioner has three major requirements for future action: coherence, conversion, certainty. This entails new rules being clear, workable and consistent with other European competition legislation. Monitoring and enforcement will also be important. There should additionally be greater convergence on issues where competition problems exist such as access to technical information. Finally, stakeholders need certainty over the next ten years.

"Whatever is published on 22 July, FIA will stand ready to defend the interests of its members," said Kraus. But he is confident that the European Commission is now looking for compromises. "One point that was clear for all participants was that the principle of access to technical information has been accepted. This is very important not only for spare parts companies, but also for FIA clubs. We need the technical information to help our members, if ever they break down."

Kroes softened

As part of its campaign, the FIA has also been alerting MEPs as to the dangers if the BER simply disappears. This led MEP Graham Watson, then president of the European liberal party, to question Commissioner Kroes. "In the UK, there are more independent repairers than franchised dealers and they often charge half the hourly rate of franchised dealers, offering a local and affordable service," explained Watson. "This not only provides a valuable service to consumers and the environment, but also accounts for thousands of jobs," he noted.

In her official answer to Watson, Kroes admitted that independent garages provide motorists with a "valuable and often cheaper" alternative to the authorized networks. "Any future competition framework for the motor vehicle sector must clearly ensure that the Commission can act when barriers are put in the way of independent repairers accessing tools, parts, and technical information," noted Kroes.

As proof of the Commission's determination to ensure that there is fair competition for independent repairers and consumers, Commissioner Kroes pointed to formal decisions taken against Daimler Benz, Fiat, GM and Toyota, in 2007. The legally binding decisions taken by the Commission aimed at ensuring that independent repairers have access to technical information.