Auto manufacturers and their dealers could be forgiven for throwing up their hands in despair at the uncertainty still hanging over the European car distribution system.
A group of panelists took on the unenviable job of discussing the status of the European Commission's proposed new block exemption regulations and concluded that difficult days may lie ahead for the industry. Representatives of both retail and manufacturing sides are feeling anxiety at the continued uncertainty.
The panel discussion took place Monday at the Automotive News Europe Congress in Gothenburg, Sweden.
"The devil is in the details," said Uhland Burkart, executive director for sales marketing and customer care at Adam Opel. "That's why we really have decided to wait until after July 17 (to make any further moves in a restructuring of Opel's German dealer network)."
That is when the Commission's final draft is due to appear.
Just when the industry thinks it has reached an understanding of what is going on in Brussels, the rules change. The industry is still wrestling with a new draft of the regulation that was posted by the commission June 17 on its website. Certain key changes appeared in the latest draft, including a clause permitting dealers to stock at least three brands instead of two, as had been the number in the original draft.
Fritz Hinterberger, member of the board of Porsche Bank, the finance arm of Porsche Holding, Europe's largest dealer group, predicted the new regime would benefit large dealer groups.
"We really believe large dealer groups will dominate," he said. "Individual dealers will sell their dealerships. Investors will come."
But Hinterberger predicted large dealer groups would stay within their own national boundaries. In his opinion, publicly owned dealer groups such as those in the UK are likely to stay in the UK.
He also predicted that "prices will not go down as much as the commission thinks they will."
Another panelist -- Alex Nourry, head of the European Competition and Regulation Group of the Clifford Chance law firm in London - said the block exemption proposal "is a rather opaque and cumbersome document, not the most user-friendly document the Commission has come up with."
Nourry said manufacturers should be concerned about their "ability to organize their networks" in given European countries "as opposed to having big retailers 'cherry picking' in certain areas."
Bernard Peloux, deputy director for European sales for Citroen, said all the news about the new block exemption proposals has left Citroen dealers "a bit stunned."
He added: "They are demoralized. They are destabilized. The situation for them will be more difficult now than it was before."
Manfred Schneider, vice president for DaimlerChrysler's development sales organization, said the idea of multiple brands being sold on the same showroom floor "would be a horrible picture for us."
Mercedes-Benz has taken more control of its dealer network by setting up large stores in city centers that will show more than 50 cars and have many models on hand for test drives, he said.
Hans Gerhard Seeba, head of sales channel strategy for Volkswagen group, pointed to such issues as multi-branding. He said: "We are concerned that the commission is naive. (Competition Commissioner Mario) Monti feels they are putting the consumer in the driver's seat. They miss the point that the consumer is already there."
Several members of the panel praised German Chancellor Gerhard Schroder's effort to intervene with the Commission to force a rethinking on its car distribution proposals.
"Mr. Monti said we will have a new block exemption and prices will go down," said Seeba. "It is a very strong argument, but it's wrong. Chancellor Schroder took the risk to say the truth."