AM autumn conference: Block Exemption debate, an "excuse for inaction" says Kelly

Dermot Kelly, Mercedes-Benz UK's director of passenger cars, has branded the debate surrounding the outcome of the September 2002 review of Block Exemption, an “excuse” for inactivity.

Speaking at the Automotive Management autumn conference, 'Beyond Block Exemption', yesterday, he urged the automotive retailing industry to look beyond the debate at ways to “move the business forward”.

Much of his presentation was an explanation of MB-UK's new retail strategy which has seen their dealers' contracts terminated with 12-months notice and MB-UK announce self-controlled brand centres in metropolitan areas and outlets nationwide run under new agreements with 'retail partners'.

Mr Kelly said: “We don't know what the result of the Block Exemption review will be. As a topic it has become an excuse not to act and put on hold actions the market should be taking to move the business forward.

“Our actions are not a defensive strategy. We are not trying to second guess the outcome, but look beyond the legislation and focus entirely on the customer. This is the surest way to be successful, 'beyond Block Exemption'.”

“Retailers outside automotive will enter the market. We need to watch their methods and style of doing business and improve our own game.”

On the question of why the shake-up in the dealer network was so drastic (MB-UK and its dealers came close to meeting in the High Court in a battle over the legality of the termination notices), Mr Kelly said the change had not been part of the original strategy.

“It became a consequence of our actions. The improvements we wanted created a different flow of people and processes. Dealerships need to accommodate that in a practical way in keeping with our brand values. But most of our existing facilities couldn't accommodate the new processes and a substantial number have to be altered or built from scratch.”

“Dealers should not feel disenfranchised. A number of retailers have been asking for five-year agreements as part of the Block Exemption review. But retailers should look beyond Block Exemption and not ask for more of the same, but look for instruments more focussed on their needs.”