Kroes verheugd over wijziging beleid General Motors inzake dealers en after-sales service (en)

The European Commission has closed its investigation into General Motors' (GM) distribution and servicing agreements following changes to bring them into line with the Commission's car distribution block exemption Regulation 1400/2002 (see IP/02/1073).

The changes introduced by GM ensure that dealers and repairers are not restricted in selling or servicing cars of competing brands (multi-branding), and that all repair-shops who fulfill the necessary quality standards can become members of the authorised network. The case followed complaints from the French, German, Spanish and Italian Opel dealers' associations. A similar case involving BMW has also been closed (see IP/06/302).

Competition Commissioner Neelie Kroes i commented: "Consumers across the EU stand to benefit from the steps taken by General Motors to allow innovative car retailing and more competitive after-sales service. I am pleased that the company has demonstrated such a constructive attitude".

The changes relate to two main areas:

• - 

  restrictions on multi-brand selling and servicing, and
• - 

  barriers to access to the authorised repairer network.

The Commission's action will contribute to proper implementation and correct interpretation of the car block exemption Regulation by the whole sector.

Multi-brand sales and after-sales service

As regards multi-brand sales, the key issue was the method for determining sales targets and evaluating the performance of GM dealers. The Commission was concerned that GM's contracts deterred dealers who wished to diversify their portfolio of brands. In particular, dealer performance was measured in terms of so-called "registration effectiveness" (a proxy for market share), and dealers were assessed against GM brands' national market share.

GM has now removed the penalty for non-fulfilment of these performance targets and clarified that the setting of sales targets will, in all circumstances, require dealers' agreement, and will take account of their local business circumstances including the decision to sell competing brands. GM has also confirmed that dealers have the right to seek arbitration in case of a dispute regarding sales targets and performance.

Other contract provisions were hindering GM dealers and repairers from using existing facilities to sell or service cars of competing brands. To remedy this, GM has in particular clarified that the Dealer Management System can be generic, provided that it has the same quality and functionality as the GM-recommended product, and that the compatibility of its interfaces with key GM software is approved by a third party.

GM has also clarified that dealers are not required to reveal commercially sensitive information on other brands through its reporting systems. These changes provide dealers with the opportunity to be innovative and more efficient, so that consumers can benefit from better commercial conditions.

Access to repairer network

Access to the repairer network should be open to all who fulfill the minimum qualitative criteria, so that local market forces can determine the density and location of repair outlets to the benefit of consumers. To this end, GM has clarified that new entrants will only have minimum capacity requirements for personnel and work bays as are required to provide a good quality service, taking into account the actual work order history of each individual repairer.

Moreover, work bays and other facilities, as well as personnel, may be used to service cars of competing brands, and staff not working on GM vehicles will not be required to undergo GM-specific training.

Furthermore, a new "opening clause" states that repairers are free to source all workshop equipment, tools and IT hardware and software from non GM-designated suppliers provided that equivalent functionality and quality is assured. The use of available generic tools will avoid duplication of investment.

Finally, repairers can group together to buy and warehouse spare parts. GM has also reduced the core list of tools which have to be kept on site, while allowing all other tools to be shared between authorised repairers.

Complaints

Between September 2003 and March 2004, the Commission received complaints from the French, Italian, Spanish and German Opel dealers' associations, following changes made by GM to its distributor and repairer agreements when the car block exemption Regulation was adopted. The Commission investigated the complaints and raised a number of issues with GM, after which GM implemented a number of adjustments to, and clarifications of, its distribution and servicing agreements. These were communicated to all the Opel, Vauxhall, Saab and Chevrolet dealers and repairers in the EU in December 2005 and January 2006.

Following the Commission action, the four Opel dealers' associations have withdrawn their complaints. Certain aspects of the complaints were not founded in terms of the relevant competition rules, such as those arguments relating to a perceived lack of contractual fairness. These may, however, raise issues under applicable national law, including rules on the protection of weaker contract parties.

See also MEMO/06/120 for more details.