Dr. Thyri: Deliberately set high sales targets so that they are not achieved”

Dr. Thyri: Deliberately set high sales targets so that they are not achieved”

Automotive industry: Dr. Thyri, did you expect such a verdict?

Peter Thyri: If you followed the process closely - and of course you do that as a representative of the applicant - there were clear signs of this. Witness interviews played an essential role in the evidentiary process. The Senate asked very precise questions, and the witnesses' answers pointed in a certain direction. I wasn't as surprised by the outcome of the case as the other side apparently was.

Did you have any idea how much of a stir this ruling would cause – including internationally?

I was aware that the issue was equally urgent across Europe. And I was also aware that the procedure would be noticed abroad. Especially in Germany from various vehicle dealer associations.

After the verdict, would you speak of a turning point in the general relationship between manufacturer and dealer?

You always have to be careful with such epochal expressions. Furthermore, this is a judgment in the first instance. If it is confirmed in the content, then it will certainly bring about drastic innovations in the application of these legal regulations, which have been in place for a very long time. For the automotive industry and possibly beyond.

The verdict was handed down in the first instance on May 12, 2020. What will happen next?

PSA is now likely to file an appeal. The deadline is four weeks. This means: The appeal will be submitted by mid-June. The applicant then has the option of filing an appeal. The Supreme Court will then decide.

What do you think are the central points of the first instance judgment?

What is obviously always an issue in other dealer networks is the linking of bonus payments to customer satisfaction surveys. At PSA, the practices violate antitrust law. What also seems to me to be essential is the question of the extent to which the retailer's freedom to set prices is restricted. For example, if he is forced to take part in actions. How exactly “forcing” is defined is, of course, always a case-by-case consideration. Many retailers say that there is little flexibility when it comes to pricing. A topic that is also extremely explosive is: setting sales goals in such a way that you know exactly that the dealer will not achieve them. This then provides another argument for not paying out performance-related remuneration components. There is a hypothetical margin that the dealer can achieve if he is, so to speak, superhumanly good, but in reality it is impossible to achieve. The proceedings established that the sales targets were deliberately set inflated so that they could not be achieved.

The topic of “distribution prices” is also interesting.

Yes, another important point is the issue of selling prices. This is a Peugeot-specific problem because the brand has two of its own plants in Austria. Vehicles were sold to end customers at prices that the dealer also had to pay. If this happens on a large scale, it can have a lasting impact on the dealer who is based in the region of these importer-owned businesses - which are not run profitably. If this is played for longer, the dealer will be starved. This danger was seen at Peugeot - hence the shutdown order.

How can such a judgment be fundamentally countered?

There are two options: If you lose a case like this, you can leave it at that, let grass grow over the matter, so to speak, reduce it to the individual case. One could say that the case was not even decided by a Supreme Court and downplay the issue. But that doesn't change the fact that you have to implement the judgment and that can hardly be limited to the individual case because the problem is always the same. To avoid this, you have to fight the judgment. But if PSA loses in the final analysis, it may confirm the turning point you spoke about earlier.

(You can read the entire interview in the next KFZ Wirtschaft (07/08 2020))