EU Commission Probes Car Makers

The European Union Commission has said it is probing four car makers on suspicion that they restricted access to technical information required for vehicle maintenance in a way that may contravene EU competition law, Tire Review reports.

Sources said the four manufacturers being investigated are Toyota Motor Corp, Fiat SpA, General Motors Corp. and DaimlerChrysler AG. A commission official explained manufacturers were obliged to provide technical information “in a non-discriminatory fashion” to all garages, not just those within their approved network, under the block exemption regulations.

“Some car makers are behind others,” he said, adding that the companies in question had been notified of the commission’s probe in December. This latest investigation is part of the EU’s initiative to create an internal market for new cars – allowing consumers to buy cars in any EU member state – and to open up car maintenance networks to competition.

In a separate investigation, French manufacturer Peugeot has been sent a statement of objections by the commission, the first stage in a disciplinary action, which could lead to a fine, over its attempts to stop European dealers selling among themselves. The commission wants to encourage “parallel imports,” imports to a country outside the official distribution channels.

Presently, car prices vary greatly among EU member states, with a pre-tax Opel Astra as much as 50 per cent more expensive in Germany than in Denmark, according to the latest commission statistics. The commission said its long-standing investigation into Peugeot “could be finished before the summer.” The commission has also held talks with BMW AG and Audi over their practice of choosing authorised garages and dealerships, which carry their brands. The talks are to establish that garages and dealers are chosen with “objective criteria” after complaints that some were unfairly excluded from the network, said the official.

The “car block exemption” was first introduced by Mario Monti in October 2002 when he was EU competition commissioner, with the aim of weakening the car makers’ stranglehold over distribution and maintenance in the EU. Under the reforms, car manufacturers are required to allow car dealers to sell among themselves and to sell other car brands if they desired, and they were obliged to allow independent garages to join the authorised network and share technical maintenance information.

The commission also said prices for new cars had converged across the 25 EU member states, and claimed their reforms had encouraged the reduction in differentials. This year’s study of car prices across the EU revealed that Finland was the cheapest country in the euro zone for new cars (pre-tax), with Germany and Austria the most expensive. Estonia replaced Poland as the cheapest country in the European Union. The standard deviation of prices, used to calculate differences across member states, fell to 6.4 per cent in 2004 from 6.9 per cent in 2003, the commission said. “Price convergence for cars continues to improve in the EU as a whole,” said competition commissioner Neelie Kroes.

“I am confident that the new legal framework for car distribution and strict enforcement of EU competition rules will contribute to further price convergence,” she said.