Vertical relations in automotive distribution : consequences of the Motor vehicle block exemption regualtion (EC) no 1400/2002

• Main Author: Hansen, Ole Asheim
• Other Authors: Christian Riis
• Format: Master Thesis
• Language: English
• Published: 2007
• Subjects: VDP::210; Norway; Iceland
• Online Access: http://hdl.handle.net/10852/17373; http://urn.nb.no/URN:NBN:no-14621

The idea of this thesis is to analyze the consequences of the new laws regulating vertical relations in automotive retailing. The automotive industry has its own set of competition laws regulating vertical relations, called the Motor Vehicle Block Exemption. The name meaning that the distribution of motor vehicles is exempted as a block from the general European competition policy. The regulation covers the European Economic Area, i.e. The European Union, Norway, Liechtenstein and Iceland . The automotive industry is a large and important industry in Europe. The top manufacturers are some of the largest firms in the world and of high importance to the domestic industries. Certain aspects have for a long time characterized the distribution of cars in Norway and more generally Europe. The up-stream market is more concentrated and relative stronger than the down-stream market. A large majority of the dealers is independent retailers, i.e. not owned by the manufacturers. The brand aspects of the industry are strong; there are distinct differentiated brands with names, logos and attributes well known to most consumers. Cars are some of the most complex and important consumer products available. Many consumers are dependent on cars and if they malfunction it may have disastrous consequences. Because of the importance of the industry; The European Commission has for a long time recognized that the automotive industry requires its own set of competition rules. The Commission changed the Block Exemption in 2002 because they were of the opinion that the old Block Exemption from 1995 was outdated. The 1995 regulation had for example no rules regulating sales on the Internet . The scope for the thesis is hence to first discuss the new Block Exemption compared to the old, determine the effects and then analyzing them. The Block Exemption also regulates the supply of spare parts and after sale services, but my focus will entirely be on the distribution of new passenger cars. I will first discuss the main effects in a general ...