Cost of car repairs and spares to drop after EU ruling
From June 1, a car owner should be able to go to any garage mechanic and have his car serviced or repaired without losing his warranty.
Garages should be able to buy spare parts for any of the big car brands, either from the manufacturer or from an independent maker, to carry out repairs.
The EU will enforce rules that say independent qualified mechanics should have access to the technical information they need about the increasingly complex workings of cars to allow them carry out repairs.
While the price of new cars have held steady for the past few years in general, charges for servicing and replacing damaged parts has been increasing.
Repair bills now account for about 40% of the total cost of owning a car, according to the European Commission, which is introducing the new rules.
Announcing the changes, Competition Commissioner Joaquin Almunia said that independent garages are an important source of competition for brand networks.
“But unfortunately they are also vulnerable to behaviour by car manufacturers that shuts them out of the market. They do this by failing to give them access to technical information or refusing to honour warranties if consumers use their services,” he said.
The ban on restrictive practices should be a boon to hard-pressed consumers during the downturn. Many are responding by not having their cars serviced. According to one study, there were 2.5 million fewer car services last year than the year before.
Rules put in place just a few years ago encouraging garages to carry several makes of car and increasing competition between manufacturers are being abandoned.
Mr Almunia said the rules were too complicated and restrictive and indirectly pushed up the distribution costs. “Competitive conditions on the markets for new cars are very different to those on the repair markets. Prices have been falling and the consumer is benefiting from an increasing choice of models – very different from the big mergers of car manufacturers predicted in 2002,” he said.
He believes this will allow manufacturers to invest in their dealer networks and reduce the cost of selling cars. Distribution costs make up an average of 30% of the price of a new car at present.
“The industry is suffering from long-standing production overcapacities and globalisation. This change should allow European car-makers to respond to new competition coming from the emerging markets of East and South Asia”, he said.
The commissioner, however, warned that the EU will continue to monitor the situation and if competition is not free and fair, they will take the necessary measures.
