Code of Conduct - the dealers view -

Transcription

1 Code of Conduct - the dealers view - CARS April 2013 Presentation by Bernard Lycke, Director General 1

2 Question 1 What actions are needed, in your view, to ensure constructive, transparent and fair relations among the different actors in the automotive industry, especially in the current difficult context of the economic crisis? Extension of the ACEA Code of Conduct by provisions concerning the following topics: 1. Freedom to transfer the sales contract to a member of the authorised network 2. Freedom to sell different brands at one site (Multibranding) 3. Compensation of investments after termination of sales contract not being caused by dealer 2

3 Question 2 Are there any specific problems in these relations at present? Yes, there are. Regulations in dealer contracts: Examples It is noted that upon the final and complete expiry of BER 1400/2002 dealers agree, on demand of the manufacturer, to establish a separate showroom for the brand and if this is not possible in practice to separate the part of the showroom that is reserved for the brand. employ designated sales staff for the brand. The total volume of motor vehicles to be annually purchased by the dealer may not fall below 80% of the purchase value of the motor vehicles purchased by the dealer in the preceding calendar year. For a period of 5 years, the dealer will sell only new cars of the brand in the contract-related sales building. A transfer of the rights and duties resulting from this contract is only possible in case of the manufacturer s prior approval. 3

4 Question 2: Situation Source: ACEA Decline of New Car Registrations Europe: saturated Market 4

5 Question 2: Strategy of Manufacturers Internationalisation some Examples Source: ZDK Concentration of sales activities on other markets Relocation of production sites 5

6 Question 2: Franchised Dealers Franchised Dealers do not have the opportunity to concentrate sales activities on other markets Franchised Dealers have to find ways to operate profitably in the given market environment It is in the interest of dealers, employees and customers to avoid closure of dealerships Main Dealer Outlets in Western Europe (EU15 + Efta) 6

7 Question 2: Target Dealers in Europe need circumstances giving them the freedom to adjust themselves to a changing economic environment! 7

8 Question 3 Have you experienced any problems in the negotiation of the contracts in advance of the change in the block exemption regime next month? If so, identify the problems and areas in question. Give us concrete examples and their impact on the operation of your firm. Several manufacturers have introduced new dealer contracts becoming effective 1/6/2013. Dealer Associations have to accept the regulations integrated in the new contracts due to difficult economic situation in order to avoid termination of complete sales networks. Dealer Associations are in a weak negotiation position, especially considering the tense situation in Europe Example Honda in Germany 8

9 Question 4 Is there already any code of conduct / good practice that covers contractual relations between the car manufacturer and the dealers? If so, what is its content and how is it enforced? Yes, there is. The ACEA code of conduct is considered by manufacturers and covers the following topics: Minimum cancellation period of 2 years Arbitration This code of conduct is an one-sided phrasing by ACEA, which is not agreed upon with CECRA. It is a good approach, but it should be extended by provisions concerning the following topics: Transfer of sales contract Multibranding Compensation of investments 9

10 Question 5 / 2 Could you share your experience on how any problems occurred during the negotiation of the new contracts were solved? Are there any other instruments than the code of conduct / good practice used to solve these problems, or are there any specific national measures regulating relations between the car manufacturers and dealers? As already mentioned in the answer concerning question 3, the occurring problems could not be solved. The proposed contractual changes had to be accepted by the dealers. No, there is currently no other European regulation regulating the relations between car manufacturers and dealers. 10

11 Question 5 / 2 But: The Austrian government recognised the need for further regulations concerning the mentioned relationship. Thus, a motor vehicle sector protection law was passed dealing among other things with the termination of the dealer contract transfer of the dealer contract becoming effective 1/6/2013. Furthermore, in Austria exists a regulation dealing with the compensation of investment 454 UGB 11

12 Question 5 / 2 This situation will lead to market fragmentation as only Belgium and Austria have a specific automotive distribution law. This is not in favour of the Single Market nor of the SMEs active in the automotive sector in Europe. It is also against the Think small first principle developed by the Commission. These SMEs need a predictable and clear regulatory framework in order to continue to invest in the interest of consumers. 12

13 Question 6 / 1 Under what conditions could a voluntary code of good practice at EU level solve these concerns? The extension of the ACEA Code of Conduct by provisions concerning the topics Freedom to transfer the sales contract to a member of the authorised network Freedom to sell different brands at one site (Multibranding) Compensation of investments after termination of the sales contract not being caused by dealer is fundamental for European Dealers to adjust to the changing economic environment. 13

14 Question 6 / 2 This is for the benefit of the entrepreneur, the employees, the customer and competition. It is further for the benefit of the manufacturer A healthy sales network is rather able to survive a crisis and thus, does not need the manufacturers financial support. 14

15 Question 7 / 1 In your view, what should be the content of such a voluntary code of good practice? The ACEA code of conduct extended by the following provisions: Transfer of sales contract A dealer has the right to transfer the rights and obligations arising from a selective distribution agreement to another dealer of the same distribution system. 15

16 Question 7 / 2 Multibranding If a dealer decides to sell vehicles of another brand at the same site, he will immediately inform the manufacturer in written form. The dealer has to ensure that confusion between the brands is avoided. 16

17 Question 7 / 3 Compensation of investment If the vehicle manufacturer terminates an agreement for reasons other than just cause and there remain unamortised relationship-specific investments made by the dealer, on termination, the vehicle manufacturer will pay to the dealer appropriate compensation reflecting such unamortised investments. 17

18 Independent of market development, what happens if... there will be no code of conduct dealing with the aforementioned topics? Current situation: 2013 Total number of dealer outlets in Europe: Average number of employees per outlet: 20 Forecast: 2020 Total number of dealer outlets in Europe: Source: ZDK Consequences Total number of dealer outlets that have to be closed Total number of employees loosing their jobs ,2% 19