Block exemption is retained following heavy lobbying by manufacturers. Exclusive franchised dealer networks are retained, and manufacturers seek to form closer relationships with dealers. Prices stay the same. Manufacturers ensure that discount levels are controlled by making sure dealers adhere to their sales strategy.
Auto industry falls in line with other retailing sectors after block exemption is abolished. Major retail brands such as Virgin or Carrefour start selling cars from multibrand superstores. Because of their massive buying power, prices fall quickly. Levels of customer care become much harder to enforce, and non-specialist retailers fail to develop the technical knowhow to service and repair modern vehicles. Manufacturers threaten not to honor warranties. Residual values fall. Manufacturers move to buy up large areas of their own sales network.
Compromise deal is agreed, where the trade is freed up, but a level of manufacturer control over sales and distribution is retained. Non-auto retailers are allowed to start selling new and used cars, but they are subject to EC-wide rules - such as employing a dedicated franchise staff, and reaching the same level of technical and aftersales knowledge as franchised dealers. Non-OE parts suppliers are allowed to fully compete with manufacturer parts.