The Irish Times - Wednesday, February 9, 2011

Mercedes says no Irish need apply to import cars from UK

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PADDY COMYN and MICHAEL McALEER

MERCEDES-BENZ UK is no longer permitting the sale of new or used cars for export to Irish motorists through its nine group-owned Retail Used Cars outlets.

The company says the policy applies to customers in any EU state outside Britain but it mainly affects potential Irish buyers because the cars they sell are right-hand drive.

Importing used cars from Britain has become increasingly popular with Irish motorists, due to a perception that significant savings can be made, even after Vehicle Registration Tax (VRT) is paid.

A quick comparison yesterday found savings of €3,000 – €4,000 after tax could be made on a 2010 E-Class 200 CDI by buying in Britain.

The nine UK-based dealerships involved, which previously traded as Mercedes-Benz Direct, are official retail outlets of Mercedes-Benz UK and sell ex-demonstration and fleet models direct from the manufacturer. They are responsible for one in 10 used Mercedes sold in Britain.

Other UK Mercedes-Benz dealerships not operated by the group continue to sell to Irish buyers.

The new policy came to light following a letter to The Irish Times Motors section. A reader who had tried to buy a used Mercedes-Benz E-Class from one of the outlets was told that they were no longer permitted to sell cars for export to owners in the Republic of Ireland.

After inquiring why, the reader was informed that this was a new policy operated by the company.

A spokeswoman for the Competition Authority in Ireland said: “In principle if Mercedes-Benz UK has decided not to allow its authorised distributors to sell into Ireland, this could be a breach of European competition rules.”

However, she said that “agreements of this sort would have to be assessed on a case-by-case basis, in their economic context”.

There are certain derogations in EU law that apply to the sale for export of motor vehicles.

According to a European Commission document outlining the rules in relation to the motor vehicle sector, it “remains committed to protect parallel trade in the internal market and to intervene in cases where competition is restricted or distorted”.

It points to a court ruling against Peugeot Netherlands, whereby the European Commission fined it €49.5 million for implementing a strategy designed to prevent dealers from selling cars to consumers in other EU states so as to curb exports.

A spokesman for Mercedes-Benz UK said it was compliant with all rules and EU regulations on the sale of cars.

He said: “The company will not sell a used car when it is known it’s going to be bought for export. This is a group decision and so would apply across all Mercedes-Benz Retail Group used car centres, which are all owned by the same company.”

A spokesman for Motor Distributors, which holds the franchise for the Mercedes-Benz brand in Ireland, said it was unaware of this decision.