Block exemptions and the new automotive supply chains

Following concern by consumer groups over "cosy cartels" and price-fixing in the UK, new rules were implemented to remove car manufacturers from block exemptions to EU Competition Law (BER). Cutting the cord between manufacturers and dealerships who can retail and service vehicles, they expose the automotive market place to the full force of the consumer and allow new and potentially more competitive distribution channels to emerge. BER introduces seven fundamental changes to the distribution of new vehicles, aftersales service and parts. These changes include: (1) dealers and repair centers can set up networks across the UK, (2) dealers can sell more than one brand, (3) dealers and repair centers can expand networks across Europe, (4) intermediaries can enter, (5) sales and service are separated, (6) independent repairers can set up multi-franchised and European repair chains, and lastly (7) repairers have the freedom in where they source parts. With this move, BER is opening up the market for multi-branded franchises and separate sales and service. It also provides scope for networks to develop across Europe, which are free to take advantage of synergies in markets and logistics arrangements.