Chances are when we say ‘Sweden’, the first thing you think of is Ikea, meatballs, saunas and Abba. It isn’t likely to be a win for the independent sector against the might of the manufacturers.
Well, the UK-based Independent Automotive Aftermarket Federation (IAAF), has hailed a guilty verdict against Kia as ‘a major victory for the aftermarket’.
Working on behalf of the independent aftermarket automotive sector, the IAAF represents the entire automotive aftermarket chain, including motor factors and independent garages, and whilst the legal wrangling took place in Sweden, it thinks the outcome has positive implications for the aftermarket in general.
In 2012 Kia Motors was convicted of being in breach of competition in the Swedish market due to its wording in its terms on its 7 year warranty which stated it was a requirement that any prescribed service is undertaken by one of its brand authorised workshops. Kia took the case back to court, but lost its petition to appeal the conviction at the end of last year.
Like Sweden, we would argue that the warranty wording is surely in direct contravention of the Block Exemption rules which protects a vehicle’s warranty if it is serviced outside of the franchised network and if non OEM parts are fitted (see our article here for more information on how access to more manufacturer data will soon be further extended.
The SBF, the Association of Swedish Car Parts Wholesales, members of FIGIEFA, which represents independent wholesalers and retailers of automotive replacement parts and their associated repair chains in Brussels, (the IAAF is also a member), reported Kia to the Swedish Competition Authority, which in turn, agreed the terms were likely in breach of Block Exemption regulations. Sweden joined the EU in 1995.
However, it was the SBF which took up the case and sued Kia in the Swedish Market Court where the manufacturer was subsequently convicted of being in breach of competition. The Swedish Market Court also imposed a fine of SEK 5 million in December 2012 on Kia as well as ordering the manufacturer to pay the SBF’s trial costs. After the latest ruling, Kia was also ordered to pay damages for attorney fees that SBF incurred in the petition for leave to appeal.
Following the announcement that Kia Motors had lost its appeal, the IAAF has urged all its members to inform them of any misinformation communicated by manufacturers and dealers with regards to motorists’ rights under the Block Exemption legislation.
In its statement Wendy Williamson, IAAF chief executive said: “The Swedish verdict is fundamentally important; it’s the first of its kind within the EU, and is a huge victory for the aftermarket. It sets an important precedent for the independent aftermarket within Europe.”
In the statement on FIGEFA’s website, SBF chair Christer Liljenberg said: “The verdict is fundamentally important and may be viewed as a precedent for the car aftermarket within the EU. Kia Motors’ guarantee terms not only affects the car aftermarket but also car owners, the consumers.”