INTERNET car retailers and franchised dealers have clashed over the future of car distribution in Europe.

The European Commission is preparing a make-or-break review of the selective and exclusive distribution system for new cars, and is expected to give its answer before the end of the year.

The Society of Motor Manufacturers and Traders claims complaints from customers will soar if block exemption is scrapped and a 'free for all' marketplace prevails.

Christopher Macgowan, SMMT chief executive, said: 'Inaccurate pricing, non-existent aftersales care and lost deposits are just a snapshot of life without franchised dealers.

'The question the Government really has to ask itself is: do we want more of the same? The biggest winner in a marketplace with no block exemption will be the legal system and the biggest loser the customer.'

But Virgin Cars chief executive officer Ian Lancaster slammed the prediction as a misleading 'doomsday scenario'. He claimed the SMMT statement simply demonstrated the importance of dealing with a well-known, trusted brand which is customer-focused, whether it is a traditional dealer, car supermarket or importer.

Lancaster said: 'Horror stories of misled car buyers who have lost money, unknowingly bought non-UK specification cars or had the surprise of being asked to stump-up extra money, exist as a result of opportunist profiteers who do not have the customers' interest at the heart of their business.'

Although Virgin says the block exemption must change, it agrees that a 'free for all' market would be bad for everyone.