A car dealership or vehicle local distribution, in locations like Coventry, is a business that sells new and/or used cars at the retail level, based on a dealership contract with an automaker or its sales subsidiary. It employs automobile salespeople to do the selling. It may also provide maintenance services for cars, thus employing automobile mechanics, stock and sell spare automobile parts, and process warranty claims.
Coventry car dealers are ruled by Commission Regulation (EC) NO 1400/2002 of 31 July 2002, on the application of article 81(3) of the Treaty to categories of vertical agreements and concerted practices in the motor vehicle sector.
In the Member States of the European Union, motor vehicle and spare part manufacturers distribute their products through networks of distributors. As far as motor vehicles are concerned, these distributors are commonly known as dealers. Motor vehicle manufacturers and other undertakings also operate networks of authorised repairers. Such a distribution or repair network consists of a bundle of similar agreements between the manufacturer and the individual distributors or body shops. For the purposes of EU competition law, these agreements are referred to as vertical agreements, as the manufacturer and distributor or repairer each operate at different levels of the production or distribution chain.
Whether a vertical agreement actually restricts competition and whether in that case the benefits outweigh the anti-competitive effects will often depend on the market structure.
The new Regulation 1400/2002, which entered into force on 1 October 2002, introduces a number of substantial changes[specify] as regards the exemption of distribution agreements for new motor vehicles and spare parts. It also introduces major changes[specify] as regards the exemption of agreements for the provision of repair and maintenance services by authorised and independent repairers and other independent operators, such as onroad assistance operators, distributors of spare parts and providers of training for repairers.
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