Cheaper cars and lower costs for car parts and servicing were the promises held out to consumers by the European Commission yesterday as it announced new rules to govern the car market across the European Union.
Mr Mario Monti, the European Commissioner for Competition, said the new regulatory regime would increase competition between dealers and make cross-border purchases of new cars significantly easier.
But he admitted the introduction of the euro, which was supposed to make cross-border price comparisons easier, had little effect on prices. He said the results of the Commission's twice-yearly survey, to be published next week, still showed large disparities between countries. "The situation has not greatly changed," he said.
According to Commission officials, this suggests car manufacturers and dealers are still insulated from effective competition.
The motor industry currently enjoys an exemption from the EU's rules banning anti-competitive behaviour. The exemption allows the car industry to restrict distribution of their products, with dealers tied to manufacturers and closed sales and repair networks.
That exemption runs out at the end of September. The Commission agreed yesterday that it should be replaced by a regime which gives less protection to the car industry while still permitting manufacturers to select their dealers and to protect their brand images.
A transition period of one year has been granted to the industry to adapt existing contracts between, say, a car manufacturer and dealer. Clauses restricting the territory in which a dealer can set up will remain until September 2005.
The Commission maintains the new regime will encourage independent outlets, including supermarkets and Internet operators.
Mr Monti said: "As from October 2002 dealers, directly or indirectly, will be able to reach consumers wherever in the EU without constraints, and consumers will benefit from greater diversity and choice."
The regulatory regime has been the subject of intense lobbying, particularly from the car industry in Germany. But the rules published yesterday are broadly in line with the draft that Mr Monti published in February.
He gave an extra year's grace for the phasing out of territorial clauses, which he had first proposed should end in 2004.
Ms Willemien Bax, of the European federation of consumers' organisations (BEUC) said: "We regret that consumers will have to wait until 2005 to reap the full benefits of the reform." But she applauded the Commission for standing firm against lobbyists.
Commission officials stressed the importance of new rules on after-sales servicing, where there has probably been greater liberalisation. The Commission said after-sales service amounted to 40 per cent of the total cost of owning a car.
Under the new rules, a manufacturer will no longer be allowed to limit the number of authorised repairers and decide their location. Car dealers will no longer be obliged to offer after-sales service. Authorised repairers would be allowed to use spare parts not sourced from the car-maker.
The Association of European Automobile Constructors (ACEA) said it was pleased that car manufacturers would "retain the possibility of choosing the system of distribution of their products, their distributors, and the criteria for authorising repairers".