Vehicle Pricing, First Report of 1998-99, HC 64;
Government Response, Third Special Report, HC 236
1. In July 1998 the Committee decided to
undertake an inquiry into the reasons for the price differentials
in new cars between the UK and other EU countries. The Report
was published in December 1998; the Government's response was
received in February 1999. One of the Report's principal recommendations
was that the block exemption (the selective and exclusive distribution
agreements car manufacturers enter into with their car dealers)
in its current format was not operating in the consumer interest.
The Government's response stated that they would be contributing
to the Commission's evaluation of the current block exemption,
due to be completed by December 2000.
2. Following the Report and in the light
of its own inquiries, in March 1999 the OFT ordered an inquiry
into car manufacturers and their exclusive relationship with dealers.
In April 2000 the Competition Commission report found that selective
and exclusive distribution agreements operated against the public
interest in the UK and put forward a number of remedies. On 12
June 2000 the Secretary of State for Trade and Industry published
a draft order which, amongst other things, requires suppliers
to offer dealers who buy cars outright similar volume discounts
to those offered to fleet buyers.