Proposal of the Commission for amending

Invitation to a Press Conference
on the Proposal of the EU Commission for amending "Design" Directive 98/71/EC:
The Repairs Clause Issue

Malta Chamber of SME’s

Invitation to a Press Conference
on the Proposal of the EU Commission for amending "Design" Directive 98/71/EC:
The Repairs Clause Issue

The GRTU, Malta Chamber of Small and Medium Enterprises and the Malta Insurance Association (MIA) would like to invite you to a press conference being held on Tuesday, 19th April 2005 at 10.30a.m at the GRTU office, Exchange Building, Republic Street Valletta on the European Commission’s proposal amending the “Design” Directive 98/71/EC.

A briefing note on the subject matter is here enclosed.

Vincent Farrugia Anton Felice
GRTU – Malta Chamber of SME’s Malta Insurance Association

Malta Chamber of SME’s

Proposal of the Commission for amending "Design" Directive 98/71/EC:
The Repairs Clause Issue
[ COM (2004) 582 final – 2004/0203 (COD)]

If the clause is not approved, Maltese car owners along with Europe’s 235 million vehicle owners would face higher prices, lower choice and made powerless against the dominance of vehicle manufacturers.

The spare parts market for cars faces a key test on 21st April 2005 when the European Parliament will hear whether or not car manufacturers will have the exclusive right to design car components.

At present, in Malta, if your car suffers damage, you as a consumer have the right to buy the spare part required to repair it, from your main dealer or from an independent repairer. The part may be one produced by the manufacturer or indeed one from an independent company. Therefore, you have the option of either going to your nearest dealership and buying the replacement wing or bonnet or buying one from an independent repairer, possibly also at a lower price.

The European Commission is proposing that this practice currently enjoyed in Malta and in many other European countries should be preserved through the adoption of a so-called “Repairs Clause.” This will ensure that consumer choice will be retained and that you would be able to choose what is best for your car and your budget. The resulting competition will drive down prices, boost quality, and promote innovation.

However, car manufacturers are against this proposal and their strong lobby has influenced the European Economic and Social Committee which will report to the European Parliament next Thursday.

They are looking for a rejection of this clause in order to give vehicle manufactures a virtual monopoly on the production of spare parts.

Both the GRTU, Malta Chamber of Small and Medium Enterprises and the Malta Insurance Association (MIA) are against monopolies. We favour the “Repairs Clause” because we want to ensure competition and low prices in the repair of damaged vehicles.

It is not certain whether the “Repairs Clause” will be adopted. If rejected, we can expect higher prices, less convenient service, and more headaches the next time we need to replace a dented wing, cracked windscreen or broken headlamp.

Malta Insurance Association GRTU – Malta Chamber of SME”s