France Should Increase Auto-Repair Competition, Agency Says

France should open the auto-repair market to more service and parts providers, the nation’s competition authority said.

Lawmakers should make the change gradually to minimize job losses at carmakers like PSA Peugeot Citroen (UG) and Renault SA (RNO) and give part makers time to increase production, the regulator said today in presenting the results of its study.

Carmakers “have a veritable legal monopoly on more than 70 percent of the sales of parts, and a duopoly with parts makers on the remaining 30 percent” of the market for visible parts -- such as mirrors, lights and bumpers -- the authority said in a statement on its findings.

Peugeot and Renault face declining car sales in Europe and rely in part on service revenue to offset slumping vehicle deliveries. The French carmakers tend to generate higher profit margins from repair and maintenance than car sales, according to the study.

Trade groups representing the auto industry criticized the report, saying in an e-mailed statement that its “erroneous and unrealistic recommendations wouldn’t bring any benefit to consumers and would gravely injure the French automobile industry, business and employment.”

UFC-Que Choisir, a consumer advocacy group, said the report “confirms the calcified nature of these markets.”

The authority said France, unlike other countries, allows for copyright protection covering visible parts and lawmakers should lift that protection over several years. Carmakers should also clarify warranty contracts regarding whether owners can service their cars outside the manufacturer’s own repair network without jeopardizing their coverage, the regulator said.

To contact the reporter on this story: Heather Smith in Paris at hsmith26@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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