BRUSSELS - An influential European consumer group has asked the European Commission not to renew the block exemption that gives carmakers the right to have exclusive sales networks.
The block exemption, due to expire in September 2002, is under review by EC regulators. It is the main reason why car prices vary dramatically across Europe, said the European Consumers' Organization.
The group believes exclusion from competition laws gives carmakers too much control over dealers. It has outlined its position in a detailed 68-page study. Last week the the group met with European Union Competition Commissioner Mario Monti, whose directorate general heads the year-long review on the block exemption.
'We do not think dealers should have the right to sell in one area, to maintain separate showrooms, or to have to sell cars whether they are good or bad,' said Jim Murray, director of the Consumers Organization.
In its submission to the Commission, the group said there is no evidence the block exemption benefits consumers.
'We have found no evidence that franchised dealers provide better value for money, a higher quality of service, or a more rapid supply of spare parts than non-franchised dealers,' the study said.
Carmakers argue that high taxes account for lower pre-tax prices in countries such as Finland, Denmark and Holland. But taxes on cars are similar in Germany, France, Italy and the UK, ranging between 17.5-20 percent, said Phil Evans, senior policy adviser at the Consumers' Association in the UK.
The European Consumers' Organization said abolishing the block exemption would open up the car market. Sellers would set prices according to economic demand, rather than at levels dictated by carmakers. 'We want prices that reflect commercial reality, said Evans. 'We do not expect uniform pricing in Europe.'