TRUTH APPROVAL

Will the rights guaranteed to the aftermarket in European legislation survive Brexit?

By Neil Pattermore | Published:  07 September, 2017

As you will be only too familiar with, the Brexit talks have begun – albeit after some delay. Now there will be a lot of discussion, some of which will be made public in the media, some of which will stay behind closed doors and some will be just plain media hype. As Mark Twain once said; “never let the truth get in the way of a good story.”

In search of the truth, what is likely to happen as part of the Brexit talks which may impact on the aftermarket? How much of this will have a positive effect, and how much will create a negative impact? Equally, how much will remain conjecture until well after all the official talks have finished, but the negotiations continue? It is useful to start at the beginning of how European legislation has supported the aftermarket.


Cause and effect
First, there was the Block Exemption Regulation (BER) which was based on competition law. BER ensured independent operators would have access to the same data, tools and information as an authorised repairer. In reality this had limited success. If a vehicle manufacturer decided not to play ball, then it was effectively impossible for a small business to take legal action against them under competition law. This was recognised by the European legislator. It decided that the ability to compete in a non-discriminatory manner needed to be anchored in a more robust legislation, so included the access to full repair and maintenance information (RMI) into the Euro 5 type approval legislation – drafted in 2007.

Type approval legislation changes the fundamental approach to a cause and effect issue. By testing the vehicle manufacturer’s compliance as part of type approval, it starts on the premise that if the vehicle manufacturer’s provision of the RMI does not meet the requirements, then the vehicle does not get type approved.

Euro 5 was therefore a more robust piece of legislation, but as ‘rules are for the guidance of wise men’ states, not all the practical implementation requirements were met. This was highlighted to the European Commission by the Ricardo report, which identified a number of key areas where some vehicle manufacturers were not compliant. The principles of access to vehicle RMI for independent operators contained in Euro 5 have subsequently been transposed into the heavy-duty vehicle legislation (Euro V/VI), powered two wheelers (L category vehicles) and agricultural and forestry vehicles (T category). However, European vehicle type approval requirements are increasingly being discussed and agreed in the United Nations WP29 group in Geneva (previously known as UNECE). In these regulations, very limited if any, provisions exist to provide access to RMI for independent operators.


Prioritise
Against this background of European regulation, what is the UK government able to do and what are they likely to do? Firstly, it is important to understand that although I have mentioned some of the automotive legislation that impacts the aftermarket, these are just one or two of the (reportedly) 19,000 plus pieces of European legislation that the UK is subject to and there are apparently 759 treaties that the UK Government may need to renegotiate as a priority.

The UK government’s initial stance is to continue with all European legislation and then to prioritise what legislation needs changing. This may be either on the basis of wanting to create an alternative to the European legislation if this benefits the UK economy, or it may be to replace European legislation if it no longer applies. You can bet every man and his dog will be trying to get the Government’s attention to highlight their particular case of why legislation affecting their sector should be a
top priority.

Can the aftermarket fit into this category? Probably not if the government’s stated intention of prioritising and supporting manufacturing industry is to be believed. The aftermarket is a service industry. Should the alternative be to ‘keep calm and carry on’ with the existing legislation, then can the aftermarket consider that it will continue to be business as usual? This may depend on the specific legislation concerned.


Serious threat
The UK is a signatory to the UNECE regulations on type approval, so no change, but no advantage either as these do not address aftermarket needs. BER is likely to remain with no change, but is difficult to enforce, especially for some of the key emerging challenges facing the aftermarket, such as remote communication with the vehicle for predictive maintenance, remote diagnostics etc. The most critical legislation for the aftermarket – Euro 5, is currently under revision to streamline many of the previously complicated requirements and amalgamate both the car and truck legislation into a single regulation.

UK vehicle manufacturers will continue to use this legislation to ensure that they can sell vehicles into Europe, but there is a very worrying new paragraph in the draft proposal that explicitly excludes the UK from this legislation. This would exempt vehicle manufacturers from having to provide all of the vehicle diagnostic, repair and maintenance information to the UK aftermarket – a serious threat. This is still a draft and may yet be part of the behind the scenes pre-discussions from both sides, but there is no guarantee that it is on the UK government’s priority list.


Emerging challenges
The UK government has famously ‘let market forces rule’ rather than legislate, but the very reason that the Euro 5 legislation was created was to address non-discriminatory access to the repair and maintenance information. This needs to be urgently brought to the attention of the government, as the alternatives are insufficient for fair competition.

The proposal to trade with other countries around the world may help the UK economy, although setting up some of these may also be a challenge. The issue of legislation for the UK aftermarket is a national issue that is, and should remain, linked to the European type approval legislation. I have stated many times before, supporting the UK aftermarket trade associations is increasingly important, but there has never been a better example of when this is going to be so critical. Your country really needs you.
xenconsultancy.com

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