Dealer association fights for data access

Dealer association fights for data access

"We need a balanced relationship between manufacturers and dealers. However, this relationship can only be balanced if the dealers' necessary investments are secured so that they do not have to fear an abrupt termination of their contracts."  This is the original tone of a current position paper from the European manufacturers' association Cecra, translated from English, which is available to the automotive industry. The association currently sees such a relationship as more than at risk.  

The European vehicle trade was already hit hard in 2013 when Chevrolet withdrew from the market. This spring, Stellantis also terminated its dealer contracts. In both cases with a notice period of just two years. As reported, the Stellantis Group is completely repositioning itself, which is why the sales and service partners of the brands belonging to the new group have been informed that their dealer contracts will be terminated on May 31, 2021 with two years' notice. The contracts therefore expire on May 31, 2023.

And then the association also refers to Austria: An existing imbalance to the detriment of retailers is also caused by aggressive business practices. These in turn were confirmed by the Supreme Court in Austria in a judgment against PSA in March 2021 in the legal dispute with the Upper Austrian Peugeot dealer Büchl. The court concluded that Peugeot had abused its market power over dealers for years. This has alarmed the industry across Europe, especially since far-reaching effects and possible follow-up lawsuits are to be expected or at least conceivable. In connection with the Büchl case, Cecra General Director Bernard Lycke spoke of a “breakthrough in a decades-long fight for more fairness in the relationship between manufacturers and dealers.”

Fear that dealers will be bypassed

The current position paper is about much more than the unpleasant practices of individual manufacturers: The association fears access to vehicle data or that manufacturers could use the accumulated data to push direct sales and bypass dealers more and more in the future. The dealer representatives demand that access to the vehicle data collected by the OEMs (from maintenance to remote diagnosis) must be open to everyone in the interests of fair competition. This applies to data on consumer behavior as well as technical data.

All of this must be incorporated into the new vertical block exemption regulation, is the clear demand of the association, which represents the interests of no fewer than 336,000 companies, which in turn depend on around 2.9 million jobs. Cecra calls for a precise definition and elaboration of the legal and economic framework in the new environment.

The position paper comes at the right time. Because the block exemption regulations (GMOs) are about to expire. The so-called vertical GVO, which applies to new car sales, expires on May 31, 2022. The motor vehicle GVO, which is relevant for the after sales area as well as the service contracts, a year later, i.e. 2023. New regulations must therefore be negotiated.

Need for discussion

With regard to the former, the so-called Regulation N° 330/2010 (the after sales area is N° 461/2010), the EU Commission stated a year ago that the general conditions have changed due to the increase in online trading. But here too there is still a need for discussion in detail.

Cecra calls for it to be stipulated that direct sales are no longer exempt if they account for more than 20 percent of manufacturer sales. The draft proposed by the EU Commission in the summer provides for a complicated regulation in which the exemption limit can amount to up to 30 percent of sales. With regard to the exchange of information, however, there should be no exemption limits (not even the proposed 10 percent of sales). Ultimately, (exclusive) access to data could have significant negative horizontal effects on competition - regardless of the market share of the companies involved.

Dual pricing, on the other hand, is no longer a categorical no-go due to online direct sales, but the prices that manufacturers offer via the Internet should not be lower than those that retailers can offer online given the conditions that the manufacturers grant them, since the latter would otherwise be de facto excluded from the online market.