Block exemption changes a worry for independent vehicle repairers
Amid the fallout from Brexit and Covid-19, independent garages face another threat to their very existence
In May 2023, the Motor Vehicle Block Exemption Regulation (MVBER) will expire.
Among other things, this regulation allows independent garages to service new cars without voiding their manufacturer warranties and forbids restrictions on the availability of original-equipment parts, tools and technical information.
It's part of the European Union's Block Exemption rules, which are designed to enable competition, and without it, independent garages could find life much tougher and car owners could find their repair and servicing bills more expensive.
The UK's Competition and Markets Authority (CMA) is assessing the current regulation with a view to recommending the government replace it with a new one.
As part of that assessment, it's considering the EU's recent evaluation of the outgoing rules, in which it stressed the need to give independent vehicle repairers continued access to the tools, training and information they require in order to compete with franchised dealers.
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However, the EU also highlighted new challenges facing independent repairers in the form of the increased use in cars of on-board digital technologies, the development of alternatively fuelled vehicles (which require specific expertise, tooling and spare parts) and, crucially, the rapid growth in vehicle-generated data.
"Access to vehicle data is key to consumer choice," said Frank Harvey, head of member services at the Independent Garage Association. "However, how easy that data is to access and how much it costs is equally important and something we hope the CMA will consider in its review of the MVBER."Steve Scofield, head of business development at the Institute of the Motor Industry, said that vehicle data – which ranges from a car's digital service record and the data captured by the driver's phone and sat-nav to the performance and fault data that the vehicle sends to the manufacturer and component suppliers – is crucial to independent garages' survival.
"In the future, access to this data will be business-critical to the independent repair sector," he explained. "Franchised dealers already have that access, but the agency model could give them and manufacturers even greater control of it, putting independent garages at a disadvantage."
The British Vehicle Rental and Leasing Association (BVRLA) says that among the problems its members have experienced are manufacturers refusing to provide access to data or granting it only when it suits them, charging for it and restricting access to vehicles' on-board diagnostics ports by preventing third-party devices from connecting to them.
Mike Hawes, chief of the Society of Motor Manufacturers and Traders (SMMT), told Autocar: “Now the UK has left the EU, it needs to develop legislation that addresses the rapid changes in the industry in terms of technology and market behaviour.
"Appropriate regulation benefits consumers and supports the wider sector, which is why the SMMT is engaged with policy-makers on the successor to the MVBER.
"We're also working with the government to make the existing Type Approval requirements on access to repair and maintenance information workable in a GB-only context.”
Meanwhile, access to data isn't the only thing troubling independent garages. Some also claim that manufacturers are making life tougher for them by fitting increasingly complex systems in new cars that require expensive, bespoke tools to maintain.
"Many previously straightforward jobs have become very complicated and, because manufacturers won't permit cheaper copies to be made of some of the special tools required, very expensive too," said Simon Howarth, founder of Surrey-based vehicle tuner AMD Technik.
Howarth also claims that manufacturers are making parts obsolete earlier in a car's life cycle. He quotes the example of a 2010 Audi RS6 for which he claims certain cooling pipes are no longer available. "Someone high up in the company told me 'after five years, you're on your own'."
Responding to Howarth's claim, Audi directed Autocar to its parts policy. Guaranteeing the supply of genuine parts for a minimum of 15 years, it says, "is something the customer can count on".
As May 2023 approaches and competing sectors of the market jostle for position, one suspects the air will be thick with similar claims and counter-claims.
*Kwik Fit hopes that new regulatory board ensures better access to software and data *
Tyre and vehicle maintenance company Kwik Fit is keen that whatever replaces the MVBER in May 2023 takes account of the emerging challenges facing the independent sector.
"What's changing is the level of new car complexity," said Kwik Fit fleet director Dan Joyce. "In the past three years, we've seen an increase in the time it takes for manufacturers to release information and data to us, while a lot of vital data accessed through the OBD port and necessary for updates and ADAS calibration is often hidden behind a paywall."
Joyce hopes the new regulation will recognise the challenges associated with new technology, including ADAS and electrification, while ensuring better access to vehicle data and software.
"We're not trying to steal OEMs' business, rather provide an efficient solution and make ourselves easier for customers to deal with," he said.
*Sales agency model raises concerns for pricing*
The MVBER isn't the only competition regulation that's due to be replaced. This May, the Vertical Agreements Block Exemption Regulation (VABER) that covers new car distribution will expire.
It's again the CMA that has the job of deciding what the replacement will be. It's consulting with interested bodies, including the SMMT, and recommending that the government adopts a new regulation called the Vertical Agreements Block Exemption Order (VABEO).
It will have to serve an industry that's on the cusp of major changes in vehicle retailing.
During the new regulation's consultation period, the National Franchised Dealers Association (NFDA) expressed concerns regarding the emergence of a new business arrangement called the sales agency model, whereby manufacturers sell new cars directly to consumers, rather than through their dealers, and possibly at fixed prices.
In its submission to the CMA, the NFDA said it feared the sales agency model would lead to higher prices for consumers.
A spokesman for the organisation told Autocar that it's working closely with dealers and liaising with manufacturers on the new business model, in addition to taking legal advice.
Last December, Mercedes-Benz announced that it would adopt the agency model from 2023.
In a statement to Autocar explaining the decision, Mercedes-Benz Cars UK managing director Gary Savage said: "The agency sales model enables us to provide new car price transparency for all our customers so they can be sure they're getting the best price. It also eliminates the need for our customers to engage in uncomfortable and stressful price negotiations.
"It was encouraging to see the results of the recent What Car? survey, where more than half of car buyers contacted said they would prefer to see standardised prices across showrooms."
In its consultation document, the CMA acknowledged the existence of the sales agency model but proposed that its adoption requires no amendments to the forthcoming regulations. Instead, it proposes that any issues with it are addressed in what it terms CMA VABEO Guidance.
*Factoids*
75% - the proportion of car maintenance work carried out by independent garages in the UK
5:1 - the ratio of independent garages to franchised dealer workshops in the UK
8.5 years - the average age of a car in the UK
*Block Exemption Regulation timeline*
2003 - The EU introduces the Block Exemption Regulation (BER), giving motorists the right to have their new car repaired by an independent garage without its manufacturer warranty being voided.
2010 - Revised BER affecting only the sale of new cars comes into force.
2013 - The EU launches two distinct strands of the BER, one regulating vehicle distribution and called the Vertical Agreements Block Exemption Regulation (VABER) and the other, called the Motor Vehicle Block Exemption Regulation (MVBER), regulating parts supply and servicing.
May 2022 - VABER expires, possibly to be replaced by the UK's own Vertical Agreements Block Exemption Regulation Order (VABEO).
May 2023 - MVBER expires. Replacement UK regulation is currently under review.