A RECENT back-down by BMW in the UK from which it had been stopping its dealers from listing cars on third-party auto websites may have implications in Australia where car importers frequently tell dealers where they can and cannot list cars.

In Australia, many car companies are instructing dealers not to use third-party new car listings websites.

Such an instruction can be a double-edge sword for dealers.

On one hand it cuts off an avenue of those dealers to get in front of many potential car buyers searching online for a new car. But, where online new car price listings are made, it prevents a race to the bottom where dealers cut the entire margin out of new cars in desperate discounting to meet onerous car company sales targets.

In this case, the instruction is supported by the broad dealer network because car dealers prefer to operate outside what amounts to an online cut-price feeding frenzy.

But the question arises whether a car company can tell a car dealer, an independent business, where it can list its cars for sale to the public, and whether banning the use of third party sites would tend to reduce competition and would be a restraint of trade.

The UK website Carwow had complained to the UK regulator, the Competition and Markets Authority (CMA) – which is the equivalent of the ACCC – that BMW UK had told its dealers not to list BMW and Mini vehicles with Carwow.

Carwow seeks quotes from dealers on behalf to its customers and sends the best quotes received over a 24-hour period to car buyers.

It claims to have sold more than $A2 billion worth of cars to its customers.

The UK-based AM-Online website has reported that the CMA met both parties and that BMW UK has since agreed to allow BMW and Mini dealers to use Carwow and other similar internet car-buying websites.

By backing down, BMW UK avoided a formal investigation by the CMA, although the CMA said the decision by BMW to withdraw its instructions to dealers did not imply that BMW had done the wrong thing.
BMW UK’s official response said: “With an increasing number of customers now looking to use online sales channels, and given the experience we have with BMW Retail Online, the time is now right to enable our UK retailers to explore the additional sales opportunities that are becoming available through internet based new car portals.

“Over the coming months we will be working with our retailers and learning from their experience to ensure we continue to provide a consistent premium buying experience for those customers who choose to purchase a BMW or Mini product through these new channels.”

A statement from CMA senior director of antitrust, Ann Pope, said: “Online comparison tools can promote competition in many markets and help consumers make informed choices”.

“The CMA therefore welcomes BMW UK’s change of policy.”

By John Mellor