Mr. Koblitz, the new competition framework for the distribution of motor vehicles is in existence since late May. What is your feeling after its thorough examination?
Axel Koblitz: The new legal framework reflects what was, already from the initial London Economics survey, the very obvious intention of DG Competition: more competition in the area of spare parts, status quo in the area of service, and letting motor vehicle specific rules bleed to death.
The new rules provide a number of facilities for manufacturers. As a consequence the automotive sector is confronted with steps backwards. Can we make a clear difference between winners and losers?
I’m not fond of questions about winners and losers, incomers, “remainers” and “outgoers”, or even success and failure, even though such questions may enjoy great popularity. However, one thing has to be established from all the attempts to make differentiated declarations: the dealer business has not necessarily reasons to heartily welcome the new rules.
What advantages do you see for the automotive businesses?
I do not see any advantage in comparison with the previous Motor Vehicle Block Exemption Regulation. However, I clearly see advantages in comparison with what could have occurred: We now have, for sure, a new MVBER, even though only for the spare parts activity. We again have specific framework conditions for service, even though they are only guidelines with no legally binding power. And the provisions covering distribution continue to exist in their current situation, even though only for the three coming years. All this is better than a sudden abolition with no substitution of all motor vehicle specific rules and the exclusive subjection of our sector to the General Block Exemption Regulation, which we seriously had to fear some time ago.
Multibranding, on the other hand, will soon belong to the past.
Who says? What is sure is that distribution agreements concluded from 2013 on will be allowed to include some restrictions of multibrand distribution. “Will be allowed” is to be emphasized because nobody obliges manufacturers and importers to make use of such possibility, and many of them will be well-advised not to try, as it would fatally backfire.
Are there any brands which are particularly affected?
All the makes which dealers typically take as second or third brand represented in their business but which, because of their small market share, do not generally provide for full utilization of the dealer business capacity. All these makes therefore run the risk to be “sacrificed” by the dealer in case of conflict. Such brands will very often be imports. This is the reason why I have not been able to understand till now why the vast majority of importers are welcoming the abolition of the rules protecting multibrand distribution, or why they have not, at least, opposed it.
What can we recommend to the dealers concerned?
If a multibrand dealer is informed by his manufacturer of amendments to his contract including exclusivity requirements, the dealer must attentively consider the manufacturer from which he can depart, and the manufacturer to which he will remain faithful. Such considerations can perfectly lead to saying goodbye to the manufacturer which intends to terminate or modify the agreement, to cashing in the compensation for termination, and to keeping the customers of the brand with a service contract which, unlike distribution agreements, cannot be withdrawn. Such steps are the more so easy as the dealer is able to quickly find one or two brands replacing the lost one, maybe brands with growing market shares, which will make it possible to use the distribution capacity which would otherwise be wasted.
Could the suppression of the current provisions in the field of multibranding lead to insolvencies?
If all the market players behave reasonably: no. The manufacturer too has no interest in a disintegrating network, either through insolvencies or migration of its dealers to competing manufacturers. But as to behave reasonably…
What do you think about the abolition of the dealer protection clauses?
I see it as a clear deterioration of the dealer’s rights, if we are definitely stuck with it without coming to another solution. We are working at it with CECRA. If there is no possibility to succeed with additions to or prolongation of the current BER, we will have “to make the cow graze in another meadow”.
Can the voluntary adhesion of manufacturers and importers to the code of good practices be an alternative?
First of all, only partially, since the code does not provide any obligation of the manufacturer or importer to give the reasons for termination, nor the dealer’s right to sell its business to a member of the network. Secondly, the code has no legal efficiency. To this end, its provisions should be included in the agreements. To maintain the provisions which have been in force up to now, directly and uniformly applicable to all makes, would by far be the best solution.
ZDK has been contributing a great deal to the new competition rules. Do you see the result as a success of this engagement?
A partial success, at least. I have already explained what could otherwise have been to the advantage of the sector. In the association world, flowers have never been sent yet to those who had avoided the worst. It has been so for generations. We should learn from it that we should not be satisfied with avoiding the worst, and we do take this into account.
What is your conclusion?
Lots of things remain to be done.
Interview of ZDK General Director Axel Koblitz by Christoph Baeuchle (kfz-betrieb)
Original text in German pulbished in the special edition November 2010 www.kfz-betrieb.de. ZDK approved its publication.