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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Motor Dealers rise ahead of changes to block exemption

September 2003

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Traditionally, car retailers have been the Cinderella's of the StockMarket, with their PE ratings rarely nudging past 10 because of well-founded fears that manufacturers could take their franchises away at a moment's notice.  But those ratings now look set to break into higher ground because of fundamental changes, starting this October,  to the European Union's "Block Exemption," which has historically allowed manufacturers to retain these draconian powers which we explained in depth back in our March 2002 issue.  These changes will strengthen the dealers' rights by ordering standard five-year fixed or two-year rolling contracts. For the latter, the manufacturer will have to provide an objective and transparent reason for ...

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