[NEWS]
Block exemption on vertical agreement in the motorvehicle sector
More than seven years after its entry into force Commission Regulation (EC) No 2790/1999 has proven to benefit the market of Powered Two-Wheelers. European consumers were the first to profit from an excellent offer throughout the territory of the European Union. In the case of the motorcycle and scooter market as well as their connected services vertical agreements lead to better coordination at the production or distribution level.
PTW dealers as well as consumers largely benefit from the balanced approaches of this EC Regulation guaranteeing improved economic efficiency and competition.
Market statistics gathered by ACEM since the block exemption entered into force show that there have been many new entrants adding to the already strong competition over the last few years, especially from Chinese and Indian brands. The number of new entrants is expected to raise, making the European PTW market even more competitive, but at the same time offering even wider choice and benefit for the PTW consumers.
On of the tangible advantages to the PTW industry is the ability of Motorcycle manufacturers to adopt both selective and exclusive distribution systems. This has provided a useful element of flexibility in determining the best system to use to achieve the most competitive business position.
The use of non-compete clause (within the limits defined under the vertical agreements Block Exemption Regulation) at the manufacturer’s discretion lead to competitive positions in certain markets and locations.
The absence of a location clause enabled manufacturers to decide the optimum number and location of official dealers not only for customer convenience, but also to protect the dealers’ significant investment.
The block exemption also provided for an incentive to establish links between distribution and after sales activities. It is clear from ACEM members experience that consumers expect their supplier to provide after sales service. Equally important is the fact that dealers need the financial contribution of sales service and parts business to achieve a level of viability and profitability.
The application of minimum standards criteria as determined by the manufacturer has been to the benefit of the consumers, in terms of the quality and consistency of dealers’ sales and aftersales service. The PTW industry was able to implement safety requirements for a very high standard of the service capability at dealer level, both for checking the condition of new and used powered two-wheelers for sale, and for ensuring a high technical competence of service. From a customer, dealer and manufacturer’s point of view safety must be paramount.
The current Vertical Agreements Block Exemption Regulation has enabled ACEM members to substantially improve their PTW distribution systems, and to be more competitive in the European marketplace, providing consumers with wider choices, value and benefits.
Seven year of successful operational experience have demonstrated that this regulation is working well. A further period of at least 10 years, would maintain continuity and legal certainty for the industry and for the consumer.
This Regulation entered into force on 1 January 2000 and shall expire on 30 May 2010.
Links:
[INDEX]
VON KUENHEIM NEW IMMA PRESIDENT
MOTOR VEHICLES RANK SECOND ON RECALLED PRODUCTS LIST
SUZUKI PLANT IN GIJON: AN INDUSTRIAL EPIC