By Chris Jones - 5th October 2005
EU competition chief Neelie Kroes says EU car makers are failing to provide an acceptable service after hitting Peugeot with a €49.5 million fine.
The French company's six-year campaign to stop its Dutch dealerships from exporting cars to other EU member states was “highly detrimental to consumers”, the commissioner believes.
“Peugeot’s strategy of cutting performance bonuses for its Dutch dealers for any car sold outside the Netherlands effectively stopped consumers in other countries from taking advantage of lower prices there.”
Peugeot claims that the bonus scheme was “designed solely to increase its share of the Dutch market and was not in any way intended to restrict cross-border sales”.
The company is considering an appeal.
More action
The commission has received similar complaints about other companies, according to Kroes, and action is expected to be taken against a number of them.
“European consumers should be able to buy their car wherever they want, but car makers continue to block cross-border purchases.”
"I am very disappointed at having to intervene yet again in the car manufacturing sector,” she said.
“This must stop.”
Peugeot is the third major car maker to be fined by the commission.
In October 2001 Daimler Chrysler €71.8 million for abusing its market position in Germany, Spain and Belgium, while Opel was fined €43 million in 2000 for blocking cross-border sales from the Netherlands.
In both cases, the European Court of First Instance reduced the fines against the companies but broadly agreed with the commission’s assessment.
But Kroes is still considering an appeal against the Daimler Chrysler decision.
She disagrees with the court’s ruling that the company is entitled to dictate business practices to its dealers in Spain and Germany because they are employees.
She considers the dealers there to be independent of Daimler Chrysler and therefore free to sell cars wherever they like and at any price.
Tackling tax
While Kroes accuses car makers of manipulating sales, the manufacturers themselves claim that it is the lack of tax harmonisation in Europe that causes prices to differ from one country to another.
According to European consumer group BEUC, prices for French cars show some of the biggest variations.
A Peugeot 206 is 33 per cent more expensive in France than it is in Hungary, for example.
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