On 1 October 2005 changes wrought by the new Block Exemption Regulation took effect, when the location clause that prevents dealers from expanding outside their territories was abolished. Dealers in selective distribution systems are now free to open additional sales and delivery outlets anywhere within the area to which the regulation applies, as long as those new outlets meet the standards of the carmakers whose vehicles they sell.
The European Commission (EC) sees the scrapping of the location clause as an important step in liberalising the car-retailing market — or, rather, it did when it first drafted the rules. So will the abolition of the location clause deliver what Brussels wants or will it make barely any difference?
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