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Friday, 24 June 2011

Consumer protection applies on the Internet too!

In fact, if anything, doing business online is even more ferociously regulated than doing business in the real world - a topic I have to talk about shortly at an Auto Retail Network workshop. And the text for my sermon is conveniently provided in this article which I'll be writing up for the next edition of Motor Law, and for Auto Retail Network's Bulletin. The gist of it is that a used car dealer sold a Laguna on eBay. It was described as “part exchange car to clear with tax and MOT”, but not described as "unroadworthy", except for a statement to that effect on the receipt. The dealer - not only the business, which seems to be a limited company, but also the individual responsible - was prosecuted, which shows that rogues can't rely on being able to hide behind the corporate veil.

The defendants pleaded guilty to offences under the Consumer Protection from Unfair Trading Regulations 2008 relating to the eBay advert being untruthful and misleading. Sandwell Magistrates fined the company £3,000 and its director £800, and also awarded £1,200 in compensation. Add costs and victim surcharges and the total is not far short of £10,000.

Monday, 13 June 2011

US: Lincoln dealers asked to invest

It's a story very reminiscent of what happens over here too. Ford has told Lincoln dealers to put their hands in their pockets and come up with an average of $1 million to remodel their dealerships. For those dealers fortunate enough to represent Ford too, the average is $1.9 million, Automotive News reports. But maybe some British dealers (or  manufacturers) would regard that as small beer? All in the name of "dealer standards", "brand values" and "customer experience."

US: Ford Truck dealers in $2 billion victory

Automotive News reports that Ford is appealing against an award of an Ohio court in a case brought by one of the company's truck dealers. The dealer had taken action over the prices charged by Ford for some 11 years, from 1987 to 1998, and the case had become a class action involving a number of dealers - hence the astronomical damages figure.

An agreement to sell trucks at published prices sounds more than a little dodgy to me, but presumably it must have been done legally otherwise the dealers' claim could hardly have succeeded. I'll ensure there's more on this story in the next edition of the Newsletter.

Friday, 3 June 2011

Block exemption effect on property market

Nothing new about block exemption replacement creating uncertainty in all sorts of ways, including the property market. Automotive Management has this story. The trend, not only for block exemption reasons, is towards larger dealers, and it's the bigger dealer groups (not to mention the sponsored dealers) who are financially in a position to benefit from the disruption caused by the block exemption. I certainly recall clients deciding that it was time to retire when a new block exemption came along - back in '95 and '02.

Mike Pearce, of Rapleys, the nationwide commercial property and planning consultants, is quoted in AM on the demand for showroom properties from retailers and fast-fit outlets, which I suppose conveniently (in a way) meshes with dealers moving to ever-more-flamboyant gin palaces on the edge of town. He says that while manufacturers have not been raising the dealer standards bar during the financial crisis, they are changing tack now and the cost of entry to the established and especially premium networks, already high, will increase. On the other hand, he thinks that multifranchising (multibranding as the block exemption has unnecessarily rechristened it) for smaller marques will be the way forward for many smaller dealers as well as for smaller manufacturers and new entrants. What a pity that the Commission has effectively written multifranchising out of the block exemption at this stage - not that it's prohibited, of course, just not a right for dealers.