Speech at FIGIEFA/SDCM Congress, 28 – 29 September 2011, Warsaw by Philippe Jean, Head of Unit Automotive Industry DG Enterprise and Industry, European Commission
The European Commission’s recent Automotive Legislation and the future Work Programme affecting the European Aftermarket
Many of you will be aware of our work programme which we publish every semester. While many of our ongoing projects indirectly affect the aftermarket, I will focus on those pieces of legislation which lie in the centre of your interests. These are the two regulations and their implementing acts which regulate emission requirements and access to repair and maintenance information for light and heavy-duty vehicles.
Where do we stand with this legislation?
For light-duty vehicles, Council and Parliament adopted Regulation 715/2007 four years ago. In the meantime, the Commission adopted two implementing Regulations, in 2008 and earlier this year. In June 2011, Commission Regulation 566/2011 was published which brought along important further clarifications of outstanding questions on the subject of repair and maintenance information. I will go into more detail on this regulation in a couple of minutes.
For heavy-duty vehicles, Council and Parliament adopted Regulation 595/2009 in 2009. As you are all aware, on RMI this regulation outlined some principles and for most part referred to the application of Regulation 715/2007 “mutatis mutandis”. In the meantime, the Commission has adopted a first implementing Regulation in 2011, which however, does not regulate the subject of access to repair and maintenance information. The second part of the implementing rules, which includes the more specific provisions on repair and maintenance information, has received the agreement of Member States. It is currently under scrutiny by Council and Parliament. I hope that this Commission Regulation will be formally adopted and published in the months to come.
Before I address some specific issues, let me briefly recall the underlying principles of this legislation:
Access to repair and maintenance information was first regulated in the block exemption regulation for motor vehicles, Regulation 1400/2002. This Regulation formed part of competition law and not of type-approval legislation. In this regulation was laid down that certain vertical agreements into which vehicle manufacturers entered into could not be exempted from detailed examination under competition rules if these agreements would include provisions preventing the granting of access to repair and maintenance information. The intention was to protect effective competition on the market for repair and maintenance services and to prevent foreclosure of independent operators.
In 2007, the requirements to grant access to repair and maintenance information were integrated into the type approval legislation for the first time. This was done through Regulation 715/2007/EC. When this was done, it was always agreed that access to repair and maintenance was a horizontal issue and not limited to passenger cars / light-duty vehicles and that it was not meant to be restricted to emission control equipment and should rather be regulated in the framework legislation laying down general type approval requirements.
The fact that access to RMI is an overreaching horizontal principle is also acknowledged in the reporting obligation of Regulation 715/2007: the Commission shall present to the European Parliament and to the Council a report on the operation of the system of access to vehicle repair and maintenance information, with particular consideration being given to the effect on competition and the operation of the internal market and the environmental benefits. The report shall consider whether it would be appropriate to consolidate all provisions governing access to vehicle repair and maintenance information within a revised framework directive on type approval.
This approach was also endorsed by the Conclusions of the Mid Term Review of CARS 21 in autumn 2008. CARS21 – Conclusion 15 reads:
“Access to technical information has made considerable progress. It is necessary to ensure that in the future access to technical information is provided in a comprehensive manner taking into account consumers protection as well as safety, environmental and intellectual property concerns. In particular, continued importance should be attached to technical information access for independent and multi-brand aftermarket operators.”
The importance of access to repair and maintenance information is still growing due to factual developments. The vehicles produced become more and more complex. This concerns in particular the growing number of electronic components which cannot be subject of “traditional” mechanical repair, but which can only be repaired on the basis of specific information regarding their electronic features. These aspects create therefore also a link with the specifications for On-Board Diagnostic systems (OBDs) and the role that these play in providing information on the performance of several vehicle features, some of which can be of relevance also in the context of market-surveillance activities (for example providing data on the emission performance of the engine over time or the adequacy of safety-related devices).
This complexity furthermore concerns the mere number of parts, the possible combinations of parts, and the frequency with which different parts are used in identical models. This aspect makes the identification of the part to be replaced in a vehicle more and more difficult and the repairer dependent on information which allows identifying the part built into a given vehicle.
Let me now explain some important aspects of the most recent legislation in greater detail:
An important aspect of European type approval legislation on access to RMI is the detailed definition of its beneficiaries, the “independent operators”. Article 3(15) of Regulation (EC) 715/2007 clearly stipulates that not only “repairers” but all undertakings, “which are directly or indirectly involved in the repair and maintenance of motor vehicles” shall get access to RMI.
The political rationale behind this provision is twofold. Firstly, the Regulation wants to create and protect fair market conditions for all kinds of services around the repair and maintenance of motor vehicles, not limited to the immediate repair, as competition for all such services, often performed by independent small and medium enterprises, is highly relevant for consumers.
Secondly, the competiveness of independent repairers depends to a large extent on the existence and functioning of other independent actors providing a large set of repair and maintenance related services, which go beyond the repair itself. The protection of an independent market for repairers therefore requires regulatory measures, like granting access to RMI, which target this larger set of services.
Let us illustrate these principles by the recent debate on access to vehicle component information, i.e. the complete data on the original equipment parts of individual vehicles identified by their vehicle identification numbers (VIN), which has led to an amendment of Regulation (EC) 692/2008 voted in November 2010. When some original part of a vehicle has to be replaced at maintenance or repair, the customer in principle has the choice between the original spare part marketed by the vehicle manufacturer or the original equipment (OE) suppliers and a wide range of competitive alternative parts. The latter are made available to repairers by independent spare part manufacturers and distributors and the complex information on spare parts suitable for individual vehicles is typically collected, edited and sold by parts producers and distributors as well as publishers of technical information.
While authorised dealers normally will only offer spare parts branded by the vehicle manufacturers, independent repairers can provide a greater product variety and a less costly choice to the customer. Since often the price of the service is the main reason for a customer calling on an independent repairer, the possibility of offering alternative spare parts in an efficient manner to customers is essential for an independent repairer’s business model. Regulation (EC) 715/2007 defines independent spare part manufacturers and distributors as well as publishers of technical information as recipients of RMI, thus benefitting on the one hand these categories of independent operators directly and providing on the other hand support to the business model of independent repairers.
In order to offer alternative spare parts, either the repairer or an independent distributor of spare parts will verify in an IT application the options suitable for a given vehicle. These IT applications are typically multi-brand, designed by parts producers and distributors or publishers of technical information, can be bought or leased by other independent operators and need automatic access to the original vehicle component identification information for their functioning. Such access could be granted either by incorporating the vehicle component information into the multi-brand IT application or by establishing a reliable dynamic remote access to a respective database operated by the vehicle manufacturer, which will allow the processing of the needed data.
In the past vehicle manufacturers had provided vehicle component information mostly in a way, which did not allow for automatic access nor instant update, e.g. via paper documents or unstructured electronic documents. Publishers were forced to process these data manually for preparing their multi-brand IT applications, what is a tedious, costly and error-prone task, potentially leading to incomplete data and sub-optimal tool performance to the detriment of customers and independent repairers. In a world where vehicles contain more and more and highly integrated electronic components, what results in an ever more complex search for appropriate spare parts, this manual processing of parts data is not sustainable. The European legislators are aware since several years that robust regulatory action is necessary in this respect to create an equal level playing field for independent operators and authorised dealers, ensuring the survival of an independent aftermarket on a long term basis.
After Regulation (EC) 715/2007 with its provisions on access to RMI was published in 2007, the controversy among stakeholders soon focused on the meaning of Article 6 of Regulation 715/2007, requiring vehicle manufacturers to provide access to vehicle component information “in a readily accessible and prompt manner, using a standardised format” and it became soon obvious that further regulation was necessary to resolve this issue. During the political decision process Member States and the Commission had to balance concerns about compliance costs raised by vehicle manufacturers with legitimate demands of independent operators. In essence the recent amendment to the implementing Regulation (EC) 692/2008 1 resulting from this discussion stipulates that
“Information on all parts of the vehicle, with which the vehicle, as identified by the vehicle identification number (VIN) … shall be made available in a database easily accessible to independent operators. …”
While the legislation as amended still does not require a specific format for exchanging vehicle component information, the quality of such format is now described by several provisions:
The amended legislation also ensures that regular updates of the vehicle component information are given to independent operators in the same way as they are given to authorised dealers1.
In summary, the legislation mandates the access to vehicle component data to be provided in a way, which will allow for their automatic processing, and should therefore facilitate the efficient design and deployment of multi-brand IT applications supporting the identification of alternative spare parts by independent operators. Component identification is essential so that independent operators can continue to provide competitive products and services to multibrand and authorised repairers.
The Commission services expect that on this basis stakeholders can find agreements on the specific conditions of vehicle component data exchange or access. They will carefully monitor the practical effects of the new Regulation on the repair and spare parts market, given the high commercial interests at stake. According to recital (18) of the amending Regulation in the future the standardisation of the format for exchanging vehicle component information by CEN is envisaged, which will be necessary to be defined in greater detail if no agreement among stakeholders on the practicalities of data exchange can be found.
1 Regulation (EC) 692/2008, Annex XIV, Section 2.1
2 Regulation (EC) 715/2007, Article 6(1)