Parked cars

Lessors allowed to retain
economic owner status under new Brussels regulations.


Europe’s vehicle leasing companies
will continue to see their “end-user” status in relation to
manufacturers protected under the latest Motor Vehicle Block
Exemption Regulations (MVBER).

The legislation, originally introduced in 2002
to exempt the motor trade from normal EU competition rules, has
just been updated and extended until 2013.

The set of new regulations, announced in June
by EU Competition Commissioner Joaquin Almunia, include guidelines
which specifically acknowledge the leasing industry’s view that
lessors should be recognised as the “economic owners” of the leased
vehicles – effectively protecting them from potential
anti-competitive behaviour from motor manufacturers.

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The EU Commission’s decision follows three
years of efforts and lobbying activity by Europe’s leasing
associations – including Leaseurope, the umbrella association
representing Europe’s leasing companies, and national leasing
associations such as the British Vehicle Rental and Leasing
Association (BVRLA).

Jay Parmar, head of legal services at the
BVRLA, explained: “The good news for us is that with the new
regulations nothing has been changed. We needed to be regarded as
the economic owners of the assets, not our customers, who are using
the vehicles on our behalf.”

According to Parmar, this was a critical issue
“because without the end-user status [in other words, lessors being
end-user customers of manufacturers], a motor manufacturer could
actually ask our members to see a mandate from our customers,
whereas by having an end-user status, we could simply buy vans and
cars without having to show a mandate to the manufacturers”.

Being recognised as the economic owner of the
asset, Parmar continued, will therefore reduce the risk that motor
manufacturers obtain details of the leasing companies’ customers,
which could have created potential anti-competitive behaviour.

“It would have created an unfair level playing
field, potentially putting the manufacturer in advantage, and
compromising the leasing company’s position,” he added.

“Retaining the end-user status, we are not
giving our entire customer list to a competitor, but are able to
retain that and treat it as confidential.”

Leaseurope, which has been lobbying Commission
officials and MEPs for the past three years, has also expressed
satisfaction with the new legislation, highlighting “the
significance of this development for the automotive leasing
industry in Europe”.

Vincent Rupied, chair of the association’s
Automotive Steering Group, said: “This is major achievement for
Leaseurope and a very positive development for the industry it

“Indeed, the new regime clearly recognises the
vital contribution of automotive leasing to a constantly evolving
and competitive market. It will enable leasing companies to enjoy
improved protection vis-à-vis uncompetitive behaviour, for
the benefit of their customers.”

The new guidelines – which cover all types of
vehicles, from passenger cars to heavy goods vehicles – will come
into effect when the motor trades’ current block exemption from EU
competition law expires on 1 June 2013.

The aftersales market is also being addressed
by the new guidelines, which will help preserve owners’ freedom of
choice in getting their vehicles repaired, whether it is with a
franchised dealer, brand specialist or independent garage.

This part of the guidelines is applied from 1
June 2010 – which is the date since when Commission’s new block
exemption regulations on the aftersales market take effect.