December 2025 – Alternative distribution models based on direct sales to consumers can be carried out with the varied involvement of traditional dealers. This means, among other things, producers taking on a significant number of consumer law obligations previously borne by dealers. In any event, the actual liability of producers in relation to direct sales depends on the respective contractual terms between manufacturers and agents.
For example, in Austria, the differing contractual terms between a producer and agent, and an agent and customer, can lead to the following scenarios: a) a commercial agent selling vehicles in the name of the manufacturer while the manufacturer as the seller remains fully liable in terms of contractual liability, b) a commission agent selling vehicles (without owning them) in its own name with full contractual liability towards the buyer, c) the authorised dealer, as the owner of the given vehicles, having full contractual liability towards the respective buyer or d) a broker with no contractual liability towards the buyer, except for pre-contractual liability.
Consumer protections
Existing consumer protection laws in the EU operate on the following principles:
- Within agreements with consumers, manufacturers may not agree on any provisions that are to the detriment of consumers and deviate from legal obligations designed to protect consumers.
- Contracts concluded between consumers and businesses must be interpreted in such a manner as to be more favourable to the consumer.
- Agreements with consumers may not include detrimental terms for consumers, for example provisions that limit or exclude a consumer’s rights to claim for damages or to seek legal recourse.
The EU continues to take a proactive approach to consumer protections, as evidenced by the very recently introduced EU Digital Services Act (DSA) and Digital Markets Act (DMA), alongside a new product liability directive expected in the near future.
Obligations, liabilities and other risks
The key obligations and risks between a manufacturer and an agent, or that may burden manufacturers when selling directly to consumers include:
- Statutory warranty obligations: warranties are a critical aspect when considering distribution model changes. EU law mandates a minimum two-year statutory warranty for new goods, although many manufacturers offer longer contractual guarantees. These commitments must be clearly communicated and honoured without imposing unlawful conditions or costs on the consumer.
- Handling complaints: in particular, manufacturers are obliged to provide consumers with adequate information about the exercising of any rights arising from a defective performance (defective vehicles/services), to handle these complaints in business premises, and to process them within a specified deadline.
- Distance contracts: if a consumer has ordered/acquired vehicles/services via a manufacturer's website and/or via telephone and/or at manufacturer's premises which may not be considered its usual business premises, the consumer may be entitled to withdraw from the respective agreement within 14 days of the handover of the given vehicle/service without stating a reason and to return the respective vehicle.
- Information obligations: a prevalent aspect of applicable consumer laws are broad disclosure obligations and specific rules regarding contracts entered into with consumers. The Czech Republic, Slovakia, Hungary, Turkey, Serbia, Bulgaria, Romania, Croatia and Austria all have similar rules regarding obligations towards consumers. This is a direct result of EU harmonization, with non-member states such as Turkey and Serbia also following suit. Accordingly, before entering into a contract with a consumer, the manufacturer must disclose (in most cases in the local language) information such as the identity of the seller and their contact information, the characteristics of the given product, sale prices, and any rights relating to defects and warranties.
In order to manage or mitigate any related risks, agreements with agents should contain specific terms relating to indemnities for claims made either by consumers or the respective consumer protection authority against a manufacturer that may arise as a result of agent activities. It cannot be excluded that certain activities by agents (such as obligations to properly inform consumers of offered vehicles/services) acting on behalf of manufacturers may result in fines/claims attributable to the manufacturer (being in a position of a direct seller to consumers and the principal in the agency sales model).
Outliers
Although CEE jurisdictions (in particular EU ones) have largely harmonised their consumer protection regulations, several differences do still apply. Such differences are typically embodied by stricter adaptations of regulatory norms. In Hungary, for example, any non-perishable goods with a sale price exceeding HUF 250,000 (approximately EUR 630) have a statutory warranty of three years instead of the standard two. In the case of warranty claim processing periods, deadlines vary according to national regulations, typically spanning 15 to 30 days. The same variability applies to prohibited consumer contractual terms, which must be adjusted depending on the given jurisdiction’s specific demands. In Turkey, for example, before any offer is accepted in distance sales contracts, the seller must provide the consumer with clear and understandable pre-contractual information, in Turkish, in writing, or on a durable medium, using at least 12-point-sized font.
Summary
A change of distribution models that would result in tighter sales controls is an attractive idea for many automobile manufacturers. However, the legal and financial implications must be carefully considered. Local variations remain a key factor when restructuring automotive sales distribution systems. Moreover, only minimal distribution model-related case law has been developed thus far in most CEE countries.
Nonetheless, changing requirements for distribution models may still represent a key opportunity for new players in the market, in particular for those experienced in the distribution of certain other regulated products relevant for cars distribution (such as financing or insurance).
Kinstellar’s multijurisdictional team offers specific automotive sector expertise. We remain perfectly placed to guide clients through the legal complexities associated with both existing and future distribution models.
This publication was prepared with contributions from Markus Taufner, Dominika Bajzáthová, Hrvoje Klišanić, Debora Dineva, Dániel Péter, Eren Ertem, Karla Rundtová, Radim Kotlaba, Mina Srećković, and Marc Barabas and others.