Car prices could fall, but probably not for a while
Officials claimed that the proposals aim to promote consumer rights, and dismantle the power of car manufacturers.
"People want a real choice. They want to buy cars and obtain services wherever it is most advantageous, to have a choice of brands and models, and to have high quality after-sales servicing at a reasonable price."
But the plans were condemned by German chancellor Gerhard Schroeder, who warned they could prompt job losses in the country's influential and troubled auto industry.
Proposals for change
Currently, the car industry is exempt from normal European Union competition legislation under the so-called block exemption arrangements, which are due to expire in September.
The Commission's proposals for a replacement regime should enable car dealers to sell more than one brand of cars, as long as they are kept separate on a dealer's premises.
The changes should also make it easier for independent garages to service vehicles and allow dealers to both sub-contract repairs and buy spare parts from sources other than the main car makers.
Car dealers' obligations to service the cars they have sold are to be removed.
The changes should help make it easier to buy cars across European borders, including via the internet, and this should help reduce price differences for the same cars sold in different EU countries.
Car makers may be asked to offer dealers similar volume discounts to those offered by fleet buyers.
Car suppliers could also be asked to remove contract-hire price differences between private and fleet buyers.
Block exemptions
Both consumer groups and non-traditional car dealers, such as car supermarkets and online showrooms, have long argued that the current block exemption rules have robbed consumers of choice.
But the European car industry has objected strongly to the Commission's intentions to change the rules, as have some European governments.
The car makers want to avoid supermarket-style car showrooms owned by independent car distributors, arguing that consumers would lose out if specialist after-sales care was put at risk.
Mr Schroeder told Opel workers that "the destruction of the block exemption would bring huge competitive disadvantages to the German car industry".
Parts of the commission's proposal would meet with resistance from Germany, he said during a visit to a new Opel factory.
"Whoever intervenes in a tried-and-tested system in the name of competition must be aware not only of what they're promoting, but also of what they're destroying," he said.
Analysts say the commission will probably not fully liberalise the car market, and they believe the changes will have little effect for car buyers anytime soon.
If accepted by EU governments, the Commission's proposals would come into effect on 1 October this year, though there would be a year-long transition period to allow manufacturers and dealers to adapt.