Car sales in Europe are set for radical change under new regulations adopted by the European Commission.

The auto industry has traditionally enjoyed a ‘block exemption’ from European Union competition law on the basis that it is a special case. However, this expires at the end of September, after which the new sales regime will come into force.

Under the scheme, which lasts until 2010, new car dealers will no longer necessarily be tied to a single auto maker, but can choose selective or exclusive status.

Selective dealers can sell any make of car they wish to any consumer and can advertise across the EU, but cannot deal with independent resellers. Exclusive dealers are tied to a single auto firm and a single sales territory, but can deal with resellers and, if approached, with consumers from outside their patch.

Moreover, dealers will be able to open sales outlets in any EU nation, but only from 2005.

The scheme also covers the repair of vehicles. New car dealers will no longer be required to offer servicing, while those that do offer repairs can buy spare parts from any source.

The new regulations are designed to promote competition and are expected to bring car prices and servicing costs down. Prices in some areas (not least the UK) can be up to 50% higher than elsewhere in the EU.

News source: BBC Online News; additional content by WARC staff