LKQ Euro Car Parts has called on the Competition and Markets Authority (CMA) to urgently clarify its plans for what will replace the EU’s Motor Vehicle Block Exemptions (MVBER), which expire in 2023.
The UK’s leading distributor of automotive parts says that the current regulations perform a critical role in supporting the health of the independent automotive aftermarket and in giving drivers choice.
The current MVBER period expires in 2023 and while the European Commission is consulting the industry on what should replace it in the EU, LKQ Euro Car Parts says the CMA is yet to get going.
LKQ Euro Car Parts has estimated that if the UK does not replace MVBER it could cost motorists an extra £100 a year – and more in the future – given the average cost of franchised dealerships versus independent workshops.
It has also highlighted the devastating impact it could have on the independent aftermarket if garages are hamstrung in their ability to repair and service modern vehicles and mobility solutions.
Andy Hamilton, CEO, LKQ Euro Car Parts, said: “We urgently need to understand what the CMA’s plans are, otherwise British drivers risk being driven into a monopoly that will cost them nearly £100 a year and much more in future.
“Ministers must intervene to expedite the issue. If not, Britons up and down the country will have to fork out £2.4bn 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 MVBER 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.”
LKQ Euro Car Parts further highlighted a number of other anti-competitive practices used by OEMs to lock-out independents and called on the industry to come forward with evidence that can be presented to the CMA so that tougher UK regulations can come into force once MVBER expires.
Hamilton said: “There is a worrying increase of other anti-competitive practices, too.
“OEMs continue to withhold bulk Repair and Maintenance Information (RMI) from the independent sector, 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 for new vehicles. And its knock-on effect is to restrict 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.
“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.
“And the prospect of a legal battle between the UK’s army of SME independent businesses and the global automotive giants makes David and Goliath seem trivial.
“Allowing MVBER to further dilute and fail would represent the advent of monopoly power in the aftermarket, reducing choice and driving up prices for consumers held to ransom.
“If you work in the independent aftermarket and have experience of the examples of anti-competitive behaviour I’ve mentioned here, then UKAFCAR wants to hear from you.
“This is British arm of AFCAR, the European-wide Association for the Freedom of Car Repair. It is a federation of associations and commercial organisations formed to lobby on Block Exemption and other key issues such as telematics data access and cybersecurity. And if your business wants to join this expanding coalition then the same applies. Please get in touch via the Independent Automotive Aftermarket Federation (IAAF) at info@IAAF.co.uk .
“We hope that by presenting more and more compelling evidence of the abuse of MVBER to regulators today, we can safeguard it and improve it for tomorrow.”