As Ireland prepares to pick its members of the next European Parliament, Kieran Fagan hears the views of those who want more competition in car sales
The director of BEUC, the European Consumers Organisation, wants Irish motorists to have more options when buying cars. "Not all of us want to buy our cars from a supermarket," says Jim Murray, "but we should at least have the choice."
We need to have many more ways of buying cars, he says, but traders have been slow to exploit the opportunities provided by the partial liberalisation of the market.
Traditionally cars in Ireland have been bought through tied dealerships, with guarantees dependent on having the car serviced by authorised dealers using parts only available from the dealer.
"Now that the EU has broken those links, the market must find new ways of exploiting the freedoms to give the car-buying consumer choices which were not possible before," Murray, a former director of Consumers Affairs in Ireland, told Motors this week.
Although he doesn't mention the Ryanair chief executive by name, he is clearly hoping for a market innovator to come along and break the anti-competitive mould of the car trade, just as Michael O'Leary did for aviation.
The block exemption, which is the official way of describing the stranglehold of car makers over sales, servicing and supply of parts, was partially loosened at the end of last year, with cross-border trading to be fully liberalised at the end of 2005.
Murray argues that the partial liberalisation, while not going far enough, does allow for greater flexibility in the sale and servicing of cars than is currently on offer in the Irish market.
"I suppose it was always going to take a while for new people to enter the market, and for stronger retailers to emerge." He says the old block exemption weakened retailers and their ability to represent their customers' needs to the manufacturers.
"Where you have captive dealerships, they just take what they are given at prices over which neither they nor their customers have any influence.
"You even had the situation that where a manufacturer produced a dud model, the captive dealer had to accept it and sell it because there was no alternative.
"We want the motor trade to exploit the new freedoms. They must make better use of the fact that you can have many brands in the same showrooms, and less restricted servicing arrangements. I don't suppose retailers will ever be as strong relative to suppliers as the supermarkets are in the grocery trade, but we can at least expect them to free things up so people can make choices."
The idea behind this is that, if you have a very efficient car dealer in Bruges, why shouldn't he or she be able to open a dealership in Rouen or Rome and take his or her chances there? You can do it selling whiskey or watches. Why should cars be different? Why shouldn't the car buyer benefit from competition?
Jim Murray believes that Ireland's Vehicle Registration Tax doesn't help matters. Mary Denise Fitzgerald of the European Consumer Centre in Dublin agrees with him but says that it shouldn't be allowed to be an obstacle to all progress. She offers evidence that, despite VRT and without much encouragement from the motor trade, some Irish potential buyers are trying out their new freedoms by making their own deals to import cars and parts.
"Our centre has noticed a marked increase in the number of consumers wanting to know how to buy cars from other EU countries," she says. Although the numbers are small, inquiries on cross-border purchases in 2004 so far already exceed those for the whole of 2003.
Fitzgerald gives examples of some queries her office has had:
1. What are the VAT implications for buying a car in Britain or Northern Ireland?
2. If I buy car parts in the UK will I be protected under consumer legislation in Ireland?
3. Queries about purchasing a car in eastern Europe.
4. Queries about the EU twice yearly pricing survey.
The trend is evident in The Irish Times too. The Help Desk column in Motors has been getting an increasing number of queries about buying cars and parts abroad, but the advice is that so far the best value lies in higher specifications, rather than cheaper prices, given the way VAT and VRT are applied.
Mary Denise Fitzgerald says the European Consumer Centre also gets callers wondering "how to find out about the history of a second hand car from the UK. There is a way - it's called the HPI check. It is a helpline where you can check a car's history before considering buying it. Basically for £30 to £40 you can go online, or phone, to find out whether the car you want to buy has been stolen, is still subject to an HP agreement or been a write-off in the past.
"Our opinion of the new regulations is that more can be done for consumers buying cars in the internal market. But the new rules are a step in the right direction.
"We are getting more calls from consumers wanting to know how to go about buying cars in other EU states so there is an interest there. We also see an increase in the number of people wanting to buy parts for their cars overseas because prices are better."
There has been claim and counter-claim about whether the changes to liberalise the market will increase or reduce car prices in Ireland. While the EU Commission argues that greater competition will reduce prices, the motor trade says otherwise. But, as Mandy Rice Davies said in another context, "they would, wouldn't they?"
If you haven't done so already, you still have two days to put your view on real competition in car sales to aspiring members of the European Parliament before polling on Friday.
CONTACTS:
European Consumers Organisation - www.beuc.org
European Consumer Centre, Dublin - www.eccdublin.ie
HPI Check - www.hpicheck.com
Motors Help Desk - e-mail to motorshelp@irish-times.ie