NFDA wants a fair deal for dealers
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THE NATIONAL FRANCHISE Dealer Association (NFDA) is warning dealer councils about concerns regarding a lack of code of conduct following changes by the European Commission on Block Exemption rules.
The EC changes, which include amendments to market share, resale pricing, selective distribution systems and online sales, came into force on 1 June 2010, forcing manufacturers to renegotiate existing franchise agreements.
NFDA, which is part of the Retail Motor Industry Federation, wrote “to all dealer councils in the UK outlining concerns about manufacturer contracts that are currently being issued around new Block Exemption rules”.
Sue Robinson, NFDA director, says the EC has created an expectation that manu facturers should operate in a transparent manner with their dealers and adhere to minimum standards of behaviour in their commercial relationships, as set out in a published code of conduct.
“We are urging all dealer councils to lobby manufacturers for such a code that would make the relationship between dealers and manufacturers as fair as possible,” she adds.
The letter urges the councils to alert their network of the potential impact of these changes and highlight how they can help their network. “Manufacturers should appreciate that a dealer council has a duty to its network to represent their interests fully. Obtaining proper advice helps fulfil that duty,” she says. Some dealers may feel they have no choice but to sign a new agreement that does not reference a proper code of conduct to support efficient, fair and transparent commercial relationships, believes Robinson.
“However, it is important that dealers are made aware that it is reasonable for them to state – in any covering letter returning such agreements – that it expects its manufacturer to take account of all European Commission guidance on the code of conduct to support transparent and fair dealings in due course.
“The NFDA’s main objective is to ensure that dealers are getting a fair deal in the new manufacturer contracts,” Robinson concludes.