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A car
dealership or vehicle local distribution is a business that sells new cars
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.
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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