BILL GATES, the founder and chairman of Microsoft, once said: 'If General Motors had kept up with technology like the computer industry has, we would all be driving $25 cars that got 1,000 miles to the gallon.'
GM responded by saying that if it had developed technology like Microsoft's, its cars would have had the following characteristics:
They would crash twice a day for no reason whatsoever
Occasionally, executing a simple maneuver such as a left turn would cause them to shut down and refuse to restart, in which case one would have to reinstall the engine
The airbag system would say 'Are you sure?' before going off.
Hilarious as it may be, this joke points to the critical difference between computers and cars. Unlike computers, cars are consumer goods that move around. Their efficiency - or lack of it - can have major safety implications for drivers and other road users.
For this reason, authorities in Europe, the USA and Japan have traditionally allowed manufacturers of motor vehicles - passenger cars, trucks, buses and motorcycles - to select a limited number of dealers to sell, service and repair their products.
Consumers would seem to agree with this logic. Recent opinion research carried out by Taylor Nelson Sofres in five major European Union markets shows that almost 60 percent of new-car buyers intend to stay with the dealer network for aftersales service, even after the warranty has expired.
It is sometimes argued that servicing is becoming less important as vehicles become more reliable and service intervals lengthen. However, the increasing complexity of modern vehicles, particularly in the area of electronics, suggests a growing need for complex, high-tech repairs that can only be performed by fully equipped and properly trained dealers.
This complexity results both from regulatory developments (new standards for exhaust emissions, fuel consumption, safety, on-board diagnostic systems) and from customer demands for more comfort (air conditioning, telematics, in-car entertainment). The development of electric, hybrid and fuel cell vehicles points in the same direction.
This high-tech service is complex, expensive and yet not necessarily profitable in itself. It is vital, though, to ensure that the repair of, say, an electronic engine management system is offered throughout the EU, even in remote areas. The best way to do so is to continue the combination of sales and service in the dealer networks.
Indeed, dealers' income from routine service and vehicle sales enables them to perform this high-tech service. By contrast, it is unlikely that independent repairers will ever be able - or willing - to perform all types of repair for all brands in all locations. For them, specializing in certain brands or routine repairs will always be easier and more profitable.
The efficient allocation of resources requires that the number of authorized dealers be limited. Cooperation between manufacturers and dealers requires increasingly close relationships, complex information and communications technology, expensive diagnostic equipment, regular training and rigorous quality control.
The current EU block exemption regulation rightly provides that 'on grounds of capacity and efficiency alone, such a form of cooperation cannot be extended to an unlimited number of dealers and repairers.'
Thus, consumers appear to be having the best of both worlds: They know there will always be a back-up for high-tech repairs, while for all other servicing and repair needs, they can choose between the dealer network and a strong independent sector.
Block exemption is all about ensuring choice, competition and access to comprehensive service. Vehicle manufacturers are committed to providing independent repairers with all technical information and parts they need to remain competitive. But, at the same time, they strongly believe that a combination of sales and service is the best means to ensure EU-wide availability of comprehensive, specialist service.
l Camille Blum has been secretary general of ACEA, the European automakers' association, since 1995. He is the European Car Issue Manager in the TABD (Trans Atlantic Business Dialog) and chairman of the UNICE (Union of Industrial and Employers Confederations of Europe) Working Party on Market Access. Blum holds a degree in economics and began his career in banking.