Brexit: Business as usual for vehicle sales and maintenance, says Fleet Assist

The fleet industry and garage network faces no shake-up in competition law governing vehicle distribution and maintenance as a result of Brexit, according to Fleet Assist.

The company provides service, maintenance and repair (SMR) solutions to contract hire and leasing companies, and vehicle rental operators, with a network of more than 5,000 franchise and independent service outlets. The network is supported by a contact centre and technical authorisation services as well as data analytics.

Answering concerns from some partners that the UK’s departure from the European Union could signal the end of Block Exemption rules and subsequent changes in current regulations, Fleet Assist said given the information available it should be “business as usual”.

That’s because post-Brexit the UK Competition and Markets Authority has said that EU Block Exemption regulations will be retained in UK law under the terms of the EU (Withdrawal) Act 2018.

Existing European Union competition law means:

• Motor manufacturers are able to create networks of selective and exclusive dealerships, provided that they do not contain any serious restrictions of competition.
• Motor manufacturers have to provide authorised repairers with access to technical information and spare parts. This regulation is particularly important as it gives independent garages and fast-fits access to manufacturer information on SMR and also applies to the sale of spare parts.

Prior to implementation of the so-called Bock Exemption governing SMR and parts, vehicles were required to be serviced or repaired at a main dealer or there was a risk of invalidating warranty. That allowed main dealers a monopoly on all warranty and service work, and triggered allegations of price fixing, said Fleet Assist.

The Block Exemption regulation applicable to SMR covers all service and maintenance during the warranty period and parts and allows vehicle owners/operators more flexibility in selecting where they can get vehicles serviced or repaired.

Thanks to that legislation, SMR work no longer has to be carried out by a main franchise dealer to maintain warranty validity as long as a garage/fast-fit undertaking the work uses original equipment or matching quality parts, and records as doing so, and completes the work in accordance with a manufacturer’s service schedules.

As a result of the retention of EU regulations within UK law, the motor industry relevant Block Exemptions will remain in force domestically and the respective EU expiry dates preserved. The expiry date of the regulation relating to vehicle sales is May 31, 2022, with a one-year transitional phase. The expiry date of the law relating to SMR and parts is May 31, 2023.

The Competition and Markets Authority’s has said that it “expects to consult on the Block Exemptions as they expire in order to provide advice to the Secretary of State”.

Vincent St Claire, managing director of Fleet Assist, said: “Whether the Government of the day renews current trading laws as they stand under Block Exemption or goes for another option remains to be seen. However, in the immediate aftermath of Brexit and the UK departing the European Union there should be no change so it is business as usual.”