Supply Chain Council of European Union | Scceu.org
Distribution

Car distribution: epochal change – Lexology

The motor vehicle distribution is going through profound changes affecting dealers. In addition to the transformations imposed by new technologies, related to electrification and electro-mobility, as well as the ‘component crisis’ (chips in particular), there are also those related to the pandemic, with less physical contact and greater use of online tools, but above all those resulting from the upheaval caused by the new Vber regulation.

The acronym Vber (Vertical Block Exemption Regulation) refers to those rules issued by the European Commission to protect competition in particular sectors, especially those in which vertical agreements are in force. An example of the latter is a type of exclusive distribution agreement between a manufacturer and a distributor, such as that between a car manufacturer and a dealer in a certain geographical area. The ultimate goal is to eliminate those practices that limit consumers’ ability to choose their suppliers.

As of 1 June 2022, the new European Regulation 330 of 2010 came into force, bringing significant changes in the relationship between car manufacturers and their sales networks.

Firstly, because it promotes so-called ‘dual distribution’, putting digital sales alongside physical sales, finalised in dealers’ showrooms. As of 1 June, in fact, car manufacturers will be able to sell vehicles and services either through their own independent distributors or in direct competition with them using digital channels to interact with end customers.

Secondly, because it introduces the figure of the agent as an alternative to the dealer, with a decidedly depowered role both in the relationship with the car manufacturer and with the customer.

In this respect, the transformation of the relationship between manufacturers and the distribution network triggered by the Vber redefines not only the role but also the operations of existing dealers. Today the dealer acts on his own account on behalf of the brand, as an agent he will do so on behalf of the manufacturer. In this second hypothesis, price lists and discounts would be set by the parent company instead of the dealer, certainly eliminating so-called intra-brand competition (i.e. between dealers of the same brand), but also commercial negotiation.

The year 2022 will change the way European citizens buy a new car, a real revolution that in the intentions of the European Union will give consumers more choice and transparency.

It is undeniable that as of June, the purchasing process will change with the customer who, in addition to the classic interlocutor in the territory, today a dealer and tomorrow an agent, will have the opportunity to combine the online and offline experience at will. For example, touching and trying the car at a showroom and then finalising the purchase online and returning to pick it up at a physical point. Or, vice versa, gathering all the necessary information on the web and then going to one of the authorised points of sale to finalise the contract.

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