Consumers demand to “break” the “exclusive agent” policy in the automobile sector

Consumers demanded a greater multiplicity of approved car agencies in the local market, similar to what the Emirates Pharmaceutical Corporation recently announced, in a precedent that is the first of its kind, to activate a new mechanism aimed at breaking the monopoly, and obliging pharmaceutical companies to appoint more than one agent for each medical product traded in the local market, stressing that applying such a mechanism in the automotive sector supports competitiveness in the sector at greater rates, and increases the quality of services provided. They told “Emirates Today” that cars are important basic commodities, and getting them out, especially models. The new, part of the “exclusivity” circle of some companies and agencies, will reflect positively on consumers and markets, as it will allow lower prices in light of increased competition, according to what is applied in many countries of the world.

On the other hand, officials at car agencies said that the presence of “agents” in the automotive sector is linked to regulatory policies, according to standards related to the manufacturer’s selection of agents in global markets, by assuming responsibility for sales, providing warranty, and services related to maintenance and spare parts, confirming the presence of more than one agent for some car brands in the local market.

They saw that liberating the market from exclusive agents includes difficulty in light of coordination between the agencies and competent authorities in the country and the factory, related to the responsibility of referring to them in the event of recall campaigns in the markets, and providing highly trained and qualified technical workers.

They emphasized that consumers have multiple options related to the freedom to import cars from abroad personally, obtain them from available free zones, or purchase them from companies operating in the car trade.

Consumer opinions

In detail, consumer Haitham Jamal said that increasing the number of car dealerships in the local market will have many positive effects, pointing out that cars are important durable goods for individuals. He believed that the presence of a larger number of car dealerships would increase the competitiveness of services and prices, and would be in the interest of consumers.

For his part, consumer Salah Sharif believed that breaking the monopoly of some agencies in the automobile sector will reduce the levels of prices offered and increase the competitiveness of the services provided, whether in maintenance or warranty, which in turn will enhance the state’s position in the automobile trade sector.

He told Emirates Today: “The experience of multiple agencies in a number of countries around the world contributed to providing great price competitiveness in those markets, compared to the local market in terms of vehicle prices.”

In the same context, consumer Ahmed Khaled said: “The prices of many cars in the local market are higher compared to the markets of other countries in the region, which requires opening the way for a larger number of car agencies in the markets, in a way that supports the market’s competitiveness in prices and services,” stressing that this will in turn reflect positively on consumers and increase demand.

For his part, consumer Ismail Hassan said, “Car agencies exclusively control the prices of car models, the services provided, and the warranty,” noting that cars are important durable goods, and therefore removing them from the “exclusivity” circle of some companies and agencies will reflect positively on consumers and markets, through increased competitiveness in prices and services, given the presence of more than one service provider.

Regulatory policies

In addition, Khaled Al-Assal, sales manager for the GEC brand at Gargash Motors, said, “The presence of agents in the automobile sector is linked to regulatory policies, according to a number of standards linked to the manufacturer’s choice of agents in global markets, by assuming responsibility for sales, providing warranty, and services related to maintenance and spare parts.”

He added to “Emirates Today”: “Factories deal with agents in the markets through coordination frameworks, whether by choosing one agent or more than one agent, as evidenced by the presence of three agents for one of the car brands in the country’s markets, and the presence of two agents for other brands.”

He continued: “The factory sets the price frameworks and levels for cars, and the agent chooses prices according to those levels, and in proportion to profit margins and operational costs, which differ in the local market from their counterparts in many countries in the region,” pointing out that “liberalizing agencies is linked to many common regulatory standards between producing factories and agencies in the markets.”

Difficulty editing agencies

For his part, General Manager of the Porsche Center Abu Dhabi, Wissam Khalil, said, “The agencies are responsible for many tasks, in coordination and cooperation with the factories that produce cars, as the agencies are responsible for being a reference for consumers, in terms of providing warranty, maintenance, and spare parts for the cars sold.”

He pointed out that “liberating agencies includes difficulty in light of coordination between agencies and competent authorities in the country, and with the factory, related to the responsibility of referring to them in the event of recall campaigns in the markets, and providing highly trained and qualified technical workers, and ensuring their continuous qualification, to undertake the necessary maintenance and repair operations for cars.”

He stressed that “the agencies coordinate with the regional offices of the producing factories to determine the price levels of cars, according to joint contracts between the two parties, through which the agent determines the prices according to the agreed upon levels.”

Multiple options

In the same context, the sales consultant at one of the car agencies, Mohamed Salah, considered that liberating the automobile sector from exclusive agencies may achieve high competitiveness in the markets that benefits consumers, but the presence of agents, whether one or more than one agent in the local market, is linked to regulatory processes that go back to the nature of cars, as a commodity that needs years of maintenance, service, and warranty.

He added: “Consumers have multiple options related to the freedom to import cars from abroad personally, or obtain them from available free zones, or purchase them from companies operating in the car trade,” stressing that many consumers prefer to deal with “agents” to obtain maintenance and warranty services.

Car agencies:

• Consumers have multiple options regarding the freedom to import cars from abroad personally, obtain them from free zones, or purchase them from car trading companies.

Consumers:

• Removing cars, especially new models, from the “exclusive” circle of some dealerships will allow lower prices in light of increased competition.