The UK’s independent garage sector faces serious challenges should the UK not replace the EU’s Motor Vehicle Block Exemptions (MVBER) with something similar.
The Competitions and Markets Authority (CMA) has yet to consider a replacement for the legislation, which expires in 2023. The European Union is currently consulting on new plans, but since the UK left the EU, it is responsible for any new regulations itself.
The confusion around the future of MVBER has led to the formation of UK AFCAR, a coalition of companies and industry bodies, to lobby the government on fair treatment of the UK aftermarket. The Independent Garage Association has also launched a new scheme, GarageSafe, to offer accreditation for garages to be able to access data from 2023 onwards should no new plans be implemented.
“We urgently need to understand what the CMA’s plans are on motor vehicle block exemptions, otherwise British drivers risk being driven into a monopoly that will cost them nearly £100 a year and much more in future,” said Andy Hamilton, CEO of LKQ Euro Car Parts. “Ministers must intervene to expedite the issue. If not, Britons up and down the country will have to fork out £2.4 billion in extra costs that go straight into the hands of car manufacturers – many of which charge a large premium for fixing their vehicles. And the UK’s 30,000 independent garages and their 350,000-strong workforce face an existential threat.
“Independent garages consistently rank higher for customer satisfaction than the franchised dealers, offering a local ‘all-makes’ service at a competitive price – critically, which can be flexed depending on the parts the driver is comfortable paying for.”
Hamilton has also argued that the current block exemptions regulations, which came into force in 2012, are already open to abuse by automotive manufacturers as newer parts and technology fall outside of its scope. These so-called ‘captive parts’ become subject to mini-monopolies.
He continued: “OEMs are designing systems and products that lock-out third parties, and this practice is especially prevalent in newer areas of technology, like electric vehicles and Advanced Driver Assistance Systems (ADAS).
“This includes practices such as developing codes or software integral to the functioning of a part, but only issued by the OEM – even if the part was developed and made by a major aftermarket supplier such as Bosch.
“The result is mini-monopolies – where independent garages are locked out of repairing and servicing vehicles, and where OEMs can effectively charge what they wish.”
According to Hamilton, there are a number of other anti-competitive practices used by OEMs to lock out independent workshops. This includes withholding bulk Repair and Maintenance Information (RMI), despite being legally obliged to do so since September last year. This impedes diagnostic tools manufacturers and automotive data publishers from creating products and solutions to new vehicles. A knock-on effect of this is the restriction of product choice to OEM-branded parts alone.
“Independent garages are sometimes unable to update online service records, which are stored on OEMs’ private servers. This is clearly off-putting for car owners looking to keep a full history,” said Hamilton. “Often, drivers are wrongly told that their warranties have been invalidated because a service wasn’t carried out by a franchised dealer, or because it used non-OEM brand parts.
“It’s also common for OEMs to strong-arm dealerships into only using their branded parts, despite MVBER guaranteeing choice. Sadly, most transgressions like this and the slow captive parts monopolies that have emerged in recent years have gone unpunished by European or national authorities.”
As UK AFCAR continues to lobby the CMA for clarity surrounding future MVBER legislation, Hamilton is urging the industry to join the fight. Businesses that want to provide examples of anti-competitive instances, or who are interested in joining the organisation can email firstname.lastname@example.org.