Thursday 11 December 2008

Termination of dealer contracts in run up to 2010

Ferrari's CEO Amadeo Felisa is quoted (second-hand - originally in Autmotive News Europe) on the termination of dealer agreements throughout Europe last August.

"The cancellation was done in preparation for the new franchise contracts that will be needed to comply with the next block exemption, as the current one expires in 2010.
"Ferrari has made significant investments in the past decade to completely renew its headquarters, factory and products. We want our dealers to follow us by upgrading their corporate standards to match what the new Ferrari is.

"We have 80 dealers in Europe. If they want to continue partnering with us, we would be happy to continue doing business with them."

Ferrari dealers are not the only group in such a position.  The transition from one regulation to another has always been fraught, and usually (at least, as far as I know) suppliers have taken it as a good reason to terminate all their dealer agreements and offer new ones to selected dealers.  Perhaps at least all 80 Ferrari dealers in Europe will be getting new agreements - but it's clear that they will have to meet a new, improved set of dealer standards if they are to qualify.

Ther is nothing in the block exemption that requires suppliers to terminate their contracts with dealers.  Whether this is necessary is a matter purely for national contract law, as the Court of Justice of the European Communities made clear in Case 125/05, Vulcan Silkebord.  But, like so much in the relationship between car manufacturer and dealer, dealers don't hurry to assert their legal rights against the dominant party in the relationship.

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