Europe Moves To Introduce More Auto Dealer Competition

Carmakers fear EU proposal would drive dealerships out of business.

Published: 06-Feb-2002

PARIS, Feb 6 (Reuters) - Unnerved by a European Commission plan to bring more competition to the way cars are sold, automakers went on the offensive on Wednesday, complaining that the move would annihilate industry profits.

The Commission's draft proposal released on Tuesday confirmed the worst fears of Volkswagen AG (VOWG.DE), PSA Peugeot Citroen (PEUP.PA) and others, who have been campaigning aggressively in Brussels to keep their protected relationship with car dealers.

"The operating margin of European manufacturers is somewhere between two and three percent," said Jacques Verdonck, director for strategy and brand policy at France's second-biggest carmaker Renault SA (RENA.PA). "Manufacturers would not be able to stand these price declines."



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