NFDA raises concerns over manufacturer contracts

The National Franchise Dealer Association (NFDA) have written to all dealer councils in the UK outlining their concerns about manufacturer contracts that are currently being issued around new block exemption rules.

The letter urges the councils to alert their network of the potential impact of these changes as well as highlighting how they can help their network.

Sue Robinson, director of RMI NFDA, said: “Manufacturers should appreciate that a dealer council has a duty to its network to represent their interests fully. Obtaining proper advice helps fulfil that duty.

“The European Commission has created an expectation that manufacturers should operate in a transparent manner with their dealers and adhere to minimum standards of behaviour in their commercial relationships, as set out in a published code of conduct. We are urging all dealer councils to lobby manufacturers for such a code that would make the relationship between dealers and manufacturers as fair as possible.”

Some dealers may feel they have no choice but to sign a new agreement which do not reference a proper code of conduct to support efficient, fair and transparent commercial relationships, according to NFDA.

However it is important that dealers are made aware that it is reasonable for them to state – in any covering letter returning such agreements – that it expects its manufacturer to take account of all Commission guidance on code of conduct to support transparent and fair dealings in due course.

Robinson continued: “The NFDA’s main objective is to ensure that dealers are getting a fair deal in the new manufacturer contracts”