A MAJOR investigation into block exemption will examine whether internet car sales and car supermarkets have removed the need for the exclusive distribution system. The European Commission is asking whether the explosion in alternative outlets for vehicles, particularly the internet, have made redundant the system which allows European car-makers to operate exclusive dealer networks that leave them immune to some key aspects of open competition.

The commission is sending more than 100 questionnaires to manufacturers, distributors, dealers, independent importers and repairers, spare parts producers and firms which sell vehicles through the internet as part of a review of block exemption which must be completed by the end of next year. A review of block exemption is planned for 2002, which could create an open market for dealers to sell any vehicles they wish.

Major objectives of the questionnaire are finding whether block exemption allows manufacturers to have an unfair influence on keeping prices high and blocking cross-border sales. It will also examine whether the system gives the servicing benefits which were expected when it was launched. High prices in the UK allow independent traders to import cars from Europe and still sell them at a discount to UK prices.