Accenture Research Examines Effects of Potential Modifications to EU Rules on Motor Vehicle Distribution

MUNICH, GERMANY September 6, 2001 – Accenture today released research examining the effect of regulatory changes that may result from the European Commission’s review of the block exemption regulation governing automobile distribution and after-sales service, which will expire in September 2002.

"A major finding of the research is that price is only one factor that affects consumer satisfaction," said Michael Rehm, partner, Accenture Automotive industry group. “Our study found that more radical regulatory changes could likely bring early improvements in price, but over time the impact on product choice and service quality and also on price would be less favourable for consumers.”

For example, the research predicts that the end of territorial exclusivity will not bring significant long-term benefits for competition or customer satisfaction. Additionally, ending the link between new car sales and after-sales service will eventually result in fewer service and repair providers, and diminished consumer choices, as large repair franchises and mega-parts wholesalers begin to increase marketshare. The study predicts a similar long-term impact from the “mega-retailer” scenario, meaning a few large retailers may eliminate smaller resellers or after-sales service partners.

Regardless of regulatory changes, the study forecasts that over time continued competition in new car sales and the aftermarket, the rise of the Internet and the introduction of the Euro will result in further convergence of retail car prices in the EU, an expansion of product choice and a drastic reduction of lead times for new vehicle sales – all contributing to a higher level customer satisfaction.

The Accenture study was commissioned by the Association of European Automobile Manufacturers (ACEA) and focused on four potential scenarios, or outcomes:

The study examined the differences each scenario raised with competition and customer satisfaction for vehicle manufacturers, consumers, retailers, repairers and auto parts manufacturers.

According to Rehm, our research found that “in light of market changes and consumer expectations, an evolution of the current system could offer more benefits than immediate, extensive changes.”

The research is based on Accenture’s assimilation of industry data and information from more than 30 in-depth interviews with manufacturer, retailer, repairer and consumer group representatives. Participants shared their points of view on the current block exemption legislation, potential legislative changes and critical success factors for the industry.

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