Industry News

CMA responds to NFDA recommendations on industry competition regulation

posted on 21/06/2023
CMA responds to NFDA recommendations on industry competition regulation

On 5 June, the Competition and Markets Authority (CMA) published the final version of its guidance on the Motor Vehicle Block Exemption Order (MVBEO). 

The NFDA (with its advisers, TLT) has, through various meetings with the CMA, sought to apprise the CMA of developments in the sector, including the anticipated transition to direct and agency (including non-genuine agency) sales on the part of certain OEMs.

The NFDA has recommended an expansion of the MVBEO guidance, so that it would not simply assist in the interpretation of the (aftersales-focused) MVBEO itself, but would also consider wider competition issues of relevance to the sector (sales as well as aftersales). This included requests for ongoing scrutiny of different agency models and their potential impacts on affected markets, as well as a call for an industry Code of Conduct to promote fairer business practices.

The CMA’s response to the NFDA underlines its close interest in sector developments. The guidance indicates that the CMA is paying close attention to the evolution of sales in the sector and that, were the ability of dealers (or agents) to continue to be able to deliver the benefits expected by consumers compromised, this could prompt further intervention (possibly even the removal of block exemption or targeted investigations against OEMs) before the expected expiry of the new MVBEO (Or VABEO).

Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), which represents car and commercial retailers across the UK commented:

“NFDA and its retained specialist legal advisers, TLT, remains in dialogue with the CMA for on-going progression of MVBER guidance. This response from the CMA is positive as they understand both the financial and consumer implications that potential MVBER and agency models could have on the sector and will be paying close attention to its developments.

“The NFDA is preparing a more detailed summary of the MVBEO guidelines, which will also remind members of the core aftersales provisions of the regulation, which will be available to members upon request.”

*Article Source

Related articles and services

Road in the sun

Road to Zero