AlexK

The EC has decided that Block Exemption won't be renewed when it expires at the end of this month, although some clauses will still remain in force until 2005.

I'm curious to know what effect (if any) people think this will have on the way we buy and maintain our cars. I know there are one or two dealers on here who might have a useful perspective on the subject.

BMW and VW are busy terminating contracts with their dealers. Mercedes had their little punch-up with their dealers last year. Anything happening in the Subaru dealer network?

Here's the blurb from What Car? on the subject...

"Cheaper new cars and servicing are on their way following an annonuncement by the European Commission today (17/7/2002). Proposals to increase competition in the European car market were confirmed and most of the changes will kick in this October, with a one-year transition period for manufacturers and dealers.

However, consumers will still have to wait years for one of the most important reforms to arrive. The European Parliament and the motor industry lobbied to keep the so-called 'location clause' until October 2005. This allows manufacturers to allocate exclusive sales territories and prevents dealers from opening new outlets wherever they wish.

The EC had proposed scrapping this clause from the autumn. This would allow dealers to open new outlets without the permission of the manufacturer, so promoting greater competition between dealers of the same brand - and in turn, lower prices for buyers.

The Competition Commissioner, Mario Monti, has defended the delay: 'In my view this is a balanced and practical solution on a matter where opinion has been divided.'

Other changes are expected to benefit the consumer more quickly. From October, it will be easier for dealers to sell more than one brand under the same roof. This should mean lower costs for the dealer, and the saving may be passed on to the buyer. However it would restrict the customer's ability to play one dealer off against another.

Buying a car from abroad should also become easier. Foreign dealers will be able to advertise the prices at which they can sell right-hand-drive cars to UK buyers without fear of penalties from the manufacturer. From October 2005, European dealers will also be able to set up showrooms in the UK.

Servicing will also be opened up to greater competition, with greater access to technical information for independent servicing outlets."

Type_RA

It means that at the moment we have car supermarkets, we will have supermarkets that also sell cars . Could be a serious price war about to kick off.

Silver Knight

A serious price war would be interesting for everyone who owns a new to 3 year old car,
How about a 20% drop in 2nd hand values overnight?

NDT

another huge impact will be the breaking of the sales to servicing link.
Eventually OEMs will be forced to share servicing data with any reasonably qualified company (e.g. Halfords, AA, Kwikfit) and honour warranties providing a vehicle has been properly serviced, even if the servicing was done by a non-dealer.
This has a massive impact on the economics of the average car dealership.

Nick

ChrisB

Indeed it is, but if they have to fight nail and tooth to get a customer in for a service, service levels (in theory!) go up.

chiark

Unfortunately, I'm willing to bet theory and practice are miles apart and we the punters get worse service dressed up as the "next big thing".

Given that a some Subaru garages are in my experience not terribly knowledgeable about the cars they sell and service, what hope has a supermarket got of being able to service your car well?

munna

about bloody time!!!!....thats the good news!!!!for purchasers of cars....Bad news for the likes of SCOOB owners who will see the price of their beloved fall even more!!

AlexK

Information about Block Exemption is a little sketchy in places, but below is what I think could happen in the short/medium term. Does anyone else agree?

Whilst franchised dealers are still prevented from opening dealerships in other sales territories until 2005, there doesn't seem to be anything to stop car supermarkets (or anyone, in fact, who isn't in the franchised network), from selling Subarus (or any other car) imported from Europe at less than UK list price, whilst also offering full factory-backed service and support.

One could assume therefore, that Subaru UK (or any other manufacturer) would be unwise to not consider aligning new vehicle prices with those in Europe.

Lexus did this in 2000, thankfully the month before I bought one. Other manufacturers followed. Whilst you could argue that £21,495 represents good value for money for a car like the Impreza WRX, it's still £4k more than Europe (although allowances should be made for differences in warranty and alarm/immobiliser packages).

You could go further, and say that the large number of importers offering Imprezas at £4k less than Subaru UK would indicate that this is a popular route into Subaru ownership for many. Obviously, this means significantly decreased sales for Subaru UK (IM).

Personally, I'm waiting to see what the MY03 looks like, and see what the fall-out is from Block/E before ordering. If an imported Impreza was £17.5k and a UK Impreza was £19k from a UK dealer, I'd still rather buy the UK car. But at the current £22k price once you've added metallic paint, the import is the more attractive option.

sillysi

My PCP contract is due to run out in a couple of years, it sounds like I may be benefiting having a guaranteed value from Subaru for my car. Especially if the second hand market falters after block exemption expires. I would of thought that the current UK franchised dealers will have to match the prices of dealers who are importing from Europe and selling in the UK, if not then they are going to go under very quickly. IMO they do not offer enough benefits to persuade me to stay with them, I am not that bothered who services my car as long as they do a good job and my warranty is valid.

Si.