OREANDA-NEWS. March 05, 2012. Recently FAS has received numerous statements concerning conformity of car distributors’ practices of car sales and after-sales services as well as sales of spare parts and components in the Russian Federation to the antimonopoly law, FAS Russia would like to information the following, reported the press-centre of FAS Russia:

Having analyzed the established relations between car distributors and dealer / service, the Federal Antimonopoly Service revealed that many car distributors:

1. Obligate their partners to combine the functions of car sales and after-sales services. It obstructs entry to the market of existing independent service, because they must make significant investments to construction of dealer centres in order to obtain the status of an authorized service centre and provide warranty service. As a result of such practice in the regions with high demand, the market of after-sales services experiences deficit. It adversely affects the quality and costs of services.

2. Do not fix clear requirements and rules for selecting counteragents (dealers), artificially restrict the period of validity of dealer agreements, and, using this, unreasonably terminate, refuse to conclude or prolong dealer agreements, unilaterally terminate contracts for supplying spare parts to authorized dealers. Such actions cause significant damage to economic entities operating on the market.

3. Create discriminatory conditions for certain leaders within the same dealer network for supplying new vehicles and spare parts to them (short delivery of vehicles; fixing different supply conditions, in particular, for vehicle lines and supply regimes; requiring additional investments in equipment and premises; fixing different payment conditions).

4. Restrict authorized dealer and service centres in selecting suppliers of equipment and materials required to equipping fully dealer centres and after-sales centres, which ultimately results in increasing the price of such equipment and materials.

5. Prohibits authorized service centres to repair vehicles of competing brands, which restricts competition on the market of after-sales service.

6. Unreasonably refuse to conclude contracts for supplying original spare parts and accessories to vehicles to independent after-sales services, which ultimately leads to increasing the price of such spare parts and accessories.

7. Supply special equipment for technical maintenance, vehicle diagnostics only to the authorized service centres.

8. Set the retail reselling prices for dealers for original spare parts and accessories.

Such practices form non-transparent and unhealthy business environment, infringe the interests of economic entities operating on the markets of car sales and after-sales services, and restrict competition.

One of the adverse consequences of such actions on the markets in question is a considerable increase of the costs of spare parts, dealer and after-sales services, and decreasing the quality of such services.

Currently FAS is considering initiating antimonopoly cases against distributors and dealers of the following vehicles: SKODA, Hyundai, KIA, YUGUAR, Land Rover, Ford, as well as spare parts to AUDI, SKODA, Volkswagen, and is analyzing the above markets.

To clarify the position of car distributors, FAS Russia will organize a meeting with market participants in order to voluntarily eliminate the exposed violations and prevent violations of the antimonopoly law, as well as establishing new industry rules designed to develop competition, the essence of which is as follows”:

1. Separating car sales and after-sales services. Possibility to obtain the status of an official dealer for sales, after-sales services or a universal official dealer.

2. Fixing clear requirements, procedures, deadlines for selecting counteragents (in order to obtain the status of an official dealer), that exclude possibility to coordinate activities of independent market participants.

3. Introducing a procedure for accrediting service centres and granting them the right to provide technical maintenance of vehicles under warranty.

4. Providing access of independent car service centres:

- To technical regulations that specify the procedures, deadlines, norms of vehicle technical maintenance, in particular, vehicles under warranty;

- To purchasing spare parts, software and equipment for technical maintenance of vehicle of particular brands by economic entities that are not official dealers.