The European Commission is considering radical changes to rules governing car dealerships that could allow supermarket chains to sell any brand of car, from Denis Staunton, in Brussels.
The Competition Commissioner, Mr Mario Monti, will next month present proposals that would permit dealers to sell cars from different manufacturers and allow big dealers to receive discounts on bulk sales.
Germany's Economics Minister, Mr Werner Mueller, has written to Mr Monti expressing concern at the proposals. Small dealers fear that the changes could give big firms an unfair advantage and force retailers in small towns and villages out of business.
Commission sources acknowledge the changes could mean that supermarket chains would start selling cars and that some small dealers could suffer.
But they say that the present system of exclusive dealerships benefits manufacturers and dealers at the expense of consumers.
Under EU law all anti-competitive practices are forbidden but some sectors have exemptions from the law to reflect their specific nature.
The exemption covering car dealerships expires at the end of September and the Commission wants the new regime to effect a major shake-up in the business.
At present, dealers of new cars must undertake after-sales service for the brands they sell. The Commission wants to separate sales and service so that some companies could concentrate on selling cars while others service them.
Mr Monti also wants to end the present practice whereby manufacturers can insist that dealers order spare parts from the car maker rather than from cheaper, parts manufacturers.
The Commission proposals would allow dealers to sell to customers anywhere and would end the present quota system that allows manufacturers to limit the number of cars available in any region.
Officials believe that the changes could facilitate the sale of cars over the Internet and could lead some manufacturers to sell more cars directly to the public.
The new rules would continue to allow car manufacturers to choose their dealers. But the manufacturers could not break a contract with an existing dealer who chooses to stock cars from other manufacturers. And the car makers could not insist that their cars are sold in a separate building by separate staff.
Germany's reservations about the proposals suggest that the Commission could face opposition in the coming months.
But officials are confident that manufacturers will accept the new rules and that consumers will benefit from lower prices.
The introduction of euro notes and coins has already introduced greater price transparency into the car market, although price differences between EU member-states are partly due to different tax rates.
The new rules would make it easier for customers to buy cars in other member-states and could lead to the creation of Europe-wide dealers selling cars from a number of manufacturers.
Although other sectors enjoy exemptions to EU competition law, Commission officials say that none is as restrictive as that governing the sale of cars.
"The present system is remarkably prescriptive. We want to make it more flexible, outlining what you can't do rather than telling you what you must do," one official said.
The Commission believes that it will be some time before the new rules change the way cars are sold but officials predict that, over time, the shake-up will be significant.
The separation of sales and service could have a profound impact, allowing retailers such as supermarkets to sell cars without taking on the obligation of after-sales service.