ECP BOSS WARNS OF BLOCK EXEMPTION ‘EXISTENTIAL THREAT’

LKQ Euro Car Parts has called on the Competition and Markets Authority (CMA) to urgently clarify its plans for what will replace the EU’s Motor Vehicle Block Exemptions, which expire in 2023.

Andy Hamilton, CEO of Euro Car Parts

The parts distributor says that the current regulations perform a ‘critical role’ in supporting the health of the independent automotive aftermarket and in giving drivers choice.

The current Block Exemption rules period expires in 2023 and while the European Commission is consulting the industry on what should replace it in the EU, LKQ Euro Car Parts says the CMA is yet to get going.

The factor chain has estimated that if the UK does not replace Block Exemption it could cost motorists an extra £100 a year – and more in the future – given the average cost of franchised dealerships versus independent workshops.

It has also highlighted the devastating impact it could have on the independent aftermarket if garages are hamstrung in their ability to repair and service modern vehicles.

Andy Hamilton, CEO, LKQ Euro Car Parts, said: “We urgently need to understand what the CMA’s plans are, otherwise British drivers risk being driven into a monopoly that will cost them nearly £100 a year and much more in future.

“Ministers must intervene to expedite the issue. If not, Britons up and down the country will have to fork out £2.4bn in extra costs that go straight into the hands of car manufacturers – many of which charge a large premium for fixing their vehicles. The UK’s 30,000 independent garages and their 350,000-strong workforce face an existential threat.

“Independent garages consistently rank higher for customer satisfaction than the franchised dealers, offering a local ‘all-makes’ service at a competitive price – critically, which can be flexed depending on the parts the driver is comfortable paying for.”

Hamilton has also argued that the current regulations, which came into force in 2012, are already open to abuse by automotive manufacturers as newer parts and technology fall outside of its scope. These so-called ‘captive parts’ become subject to mini-monopolies.

He continued: “OEMs are designing systems and products that lock-out third parties, and this practice is especially prevalent in newer areas of technology, like electric vehicles and Advanced Driver Assistance Systems (ADAS).

“This includes practices such as developing codes or software integral to the functioning of a part, but only issued by the OEM – even if the part was developed and made by a major aftermarket supplier such as Bosch.

“The result is mini-monopolies – where independent garages are locked out of repairing and servicing vehicles, and where OEMs can effectively charge what they wish.”

Hamilton said: “There is a worrying increase of other anti-competitive practices, too.

“OEMs continue to withhold bulk repair and maintenance information  from the independent sector, despite being legally obliged to do so since September last year.

“This impedes diagnostic tools manufacturers and automotive data publishers from creating products and solutions for new vehicles. And its knock-on effect is to restrict product choice to OEM branded parts alone.

“Independent garages are sometimes unable to update online service records, which are stored on OEMs’ private servers. This is clearly off-putting for car owners looking to keep a full history.

“Often, drivers are wrongly told that their warranties have been invalidated because a service wasn’t carried out by a franchised dealer, or because it used non-OEM brand parts.

“It’s also common for OEMs to strong-arm dealerships into only using their branded parts, despite guaranteeing choice.

“Sadly, most transgressions like this and the slow captive parts monopolies that have emerged in recent years have gone unpunished by European or national authorities.

READ: SMMT CHIEF WELCOMES BLOCK EXEMPTION ‘COMPETITION’ 

“And the prospect of a legal battle between the UK’s army of SME independent businesses and the global automotive giants makes David and Goliath seem trivial.

“Allowing MVBER to further dilute and fail would represent the advent of monopoly power in the aftermarket, reducing choice and driving up prices for consumers held to ransom.

“If you work in the independent aftermarket and have experience of the examples of anti-competitive behaviour I’ve mentioned here, then UK AFCAR wants to hear from you”.

UK AFCAR is a new trade body, established to defend the right to repair as the campaign for block exemption renewal heats up.

READ: NEW TRADE COALITION FORMED TO FIGHT BLOCK EXEMPTION THREAT 

“We hope that by presenting more and more compelling evidence of the abuse of block exemption to regulators today, we can safeguard it and improve it for tomorrow” concluded Hamilton.

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  1. Maybe the VM’s should just buy there competitors and then close them… sorry merge them. That’s the ECP way right.

    I think if you ask a vehicle owner if paying £100 extra per year for guaranteed quality parts fitted by fully trained mechanics is a price worth paying you will probably get a yes from the large majority.

    All good garages out there still use OE parts as they know the quality of some parts sold by ECP, Parts Alliance and Alliance Automotive are questionable at best, we still have a large amount of unqualified and unsafe garages out there fitting the cheapest possible parts available….