Archives: Dealer Bulletins

Yesterday in releasing the 2023-24 mid-year economic and fiscal outlook (MYEFO) the government announced changes to the Luxury Car Tax fuel-efficient vehicle threshold.

From 1 July 2025, the Government will tighten the definition of a fuel-efficient vehicle for the LCT by reducing the maximum fuel consumption from 7 litres per 100km to 3.5 litres per 100 km.

The Government will also be updating the indexation rate for the LCT value threshold for all other luxury vehicles, changing it from headline CPI to the motor vehicle purchase sub-group CPI. This change will apply from 1 July 2025.

These changes will see the Government increase revenue from the LCT by $155 million over the five years from 2022-23.

The AADA is disappointed to see this change to the fuel efficiency threshold which will increase the tax paid on a range of vehicles which are generally considered more fuel-efficient than average. The AADA considers this to be counterproductive to the Government’s own climate goals and will dissuade consumers from buying vehicles with the best safety and fuel-efficient technology.

The AADA has consistently opposed the LCT, stating that it is an outdated tax meant for a time when Australia still manufactured cars and should be abolished. The AADA will continue to advocate for its removal and will be making a strong case for its removal in our Pre-Budget Submission.

The AADA released a media statement on these changes which can be viewed here.

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Today the High Court handed down its decision to uphold the appeal in Mitsubishi Motors Australia Ltd & Anor v. Begovic. The AADA sees this as a common sense decision to ensure certainty for Australian Dealers and manufacturers to continue to supply vehicles to consumers without fear of inadvertently breaching the law.

In 2019, the applicant made a claim in VCAT seeking a refund of the full purchase price of their 2016 Mitsubishi Triton, claiming that the vehicle consumed more fuel than the fuel consumption label indicated.

VCAT found in favour of the consumer and ordered a refund for the purchase price of the vehicle. This decision was appealed to the Supreme Court of Victoria which unanimously dismissed the appeal.

This was then appealed to the High Court of Australia which unanimously held in favour of the appellants on the mandatory conduct ground. “In circumstances where the appellants were bound, respectively, to apply and to maintain the fuel consumption label on the respondent’s vehicle, a label the form and content of which were dictated by ADR 81/02, the appellants did not, by that conduct, breach s 18 of the ACL.”

This is an important decision for franchised new car Dealers as the ACL makes no distinction between retailers or suppliers regarding liability for misleading or deceptive conduct, and as such Dealers may be held liable for actions out of their control.

The AADA has released a statement welcoming this finding which you can view here.

Members can view the judgment summary here.

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The November Automotive Insights Report is now available for members. The Dealer exclusive report showcases a monthly analysis of used car sales, developed in partnership with AutoGrab.

This month’s report shows that after a number of years of tight supply, the used car market is seeing increased stock levels along with increased time to sell vehicles, and a gradual decline in retained values. Some key points from the November AIR include:

• 206,417 vehicles were sold, while 303,732 vehicles were listed for sale. This is 2.1 per cent lower than October.
• The average time to sell a used car is 52 days which is the highest it has been over the past 12 months.
• Retained values are gradually declining after the record highs of recent years, but there are still several makes and models which are holding their value very well and, in some instances, exceeding their new market value.
• The list of top selling cars in the used market closely reflects preferences in the new car market, with the Ford Ranger taking out top spot ahead of the Toyota Hilux.

After our initial release last month, we’ve identified some additional metrics which might be of interest to Dealers. We’ve provided more granularity on retained values ensuring Dealers are able to see results across segments and top 10 models for used vehicles aged 2-4 years and 5-7 years.

Also, for Dealer market supply analysis we’ve segmented it further to provide information relevant to vehicle age.

Dealers seeking more granular and local data can contact AutoGrab directly for a tailored solution.

If you are a Dealer of a contributing brand and would like access to the monthly report please email Communications Manager Ashleigh Sykes on asykes@aada.asn.au.

The Australian Automobile Association (AAA) has begun to test the fuel consumption and emissions of vehicles in real-world conditions, known as the ‘Real-World Testing Program’.

Announced in the October 2022 Budget, the Australian Government committed $14 million to fund the program. Over the next four years, the AAA will test 200 different cars, utes and electric vehicles on Australian roads to see how their fuel consumption and CO₂ emissions match up to their lab results.

The results from the first nine vehicles tested has been released and can be viewed here.

What does this mean for Dealers?

Consumers who are seeking to purchase a new vehicle may have questions regarding the Real-World Program results and how these results may differ from mandated lab test results.

The fuel consumption sticker reflects the results of the mandatory lab test conducted for all new cars being sold in Australia.

The real-world testing results reflect performance on a public roads route that has been designed to include a representative mix of urban and rural roads, as well as a motorway.

Conducting testing in real-world driving conditions means no two tests will be 100 per cent identical, due to weather and traffic. But on-road testing captures driving conditions that lab testing cannot.

This often results in differences in testing results between lab and real-world testing, which may prompt customers to question these differences.

The AADA advises Dealers to direct customers to the AAA website which contains a number of resources which cover questions such as:

• Why is real-world testing needed?
• How does real-world testing work?
• What is wrong with laboratory tests?
• How was the testing route developed?
• How many cars will be tested and when?
• How will vehicles be chosen for testing?
• Are electric vehicles included?
• How is this different to the fuel consumption sticker?

While this program is not a mandated test, it is important that Dealers familiarise themselves with this testing program to effectively communicate with customers who have questions regarding the program.

Resources available

Program brochure: Introducing the Real-World Testing Program

For further information on mandated lab testing, Dealers can direct consumers to the Department of Infrastructure and Transport.

For further information on real-world testing, Dealers can direct consumers to the AAA.

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The NSW Department of Customer Service has announced commencement of changes to the Motor Dealers and Repairers Act, following amendments passed by the NSW Parliament in October 2023.

On 1 December 2023:

• Maximum fines for odometer tampering under section 52 will increase to $55,000.
• The law has also been amended so that a person must not possess or fit to a motor vehicle a device capable of rendering the odometer of the motor vehicle inoperative or inaccurate, although allowance is made for licenced Dealers to lawfully replace or repair odometers upon notifying the Secretary of the Department.

Other changes commencing 1 December include:

• allowing the Secretary of the Department to issue a monetary penalty as a disciplinary action,
• preventing phoenixing by individuals responsible for corporation misconduct,
• addressing misconduct by the individual across multiple licences, and
• preventing certain persons from working in licensed motor businesses.

The Department is taking a staged approach to commencing the Bill.

AADA expects to be involved in further consultations with the Department in the new year regarding a remake of the Motor Dealers & Repairers Act Regulations due to sunset in September 2024.

The guidance note issued by the NSW Department of Customer Service can be found below.

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Please find below information regarding two decisions recently handed down by the courts related to Australia’s workplace laws.

Rostering on Public Holidays

On Tuesday 21 November, the High Court refused special leave to appeal in respect of the decision in Construction, Forestry, Maritime, Mining and Energy Union v OS MCAP Pty Ltd [2023] FCAFC 51. Accordingly, the earlier decision of the Full Federal Court will stand.

This earlier decision held that the right of an employer to “request an employee to work on a public holiday if the request is reasonable” under section 114(2) of the Fair Work Act 2009 (Cth) meant that an employer must ask an employee to work on a public holiday, rather than automatically roster them to work on such a day. 

This is a significant decision which will impact a lot of employers, particularly those in industries which require staff to work over the Christmas and New Year period.

Please find below a fact sheet provided to the AADA by the Australian Chamber of Commerce and Industry (ACCI) on rostering on public holidays.

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Right of Entry Decision

Last week the Full Federal Court handed down a decision confirming the broad scope of s484 right of entry laws.

In CEPU v Austal Ships Pty Ltd [2023] FCAFC 180, the Full Federal Court confirmed that union officials can use their right to enter premises for ‘discussions’ with members for the purpose of gathering signatures on petitions or ‘secure a commitment to a particular course of action in the future’, i.e., beyond the end of the discussion. Which in this case was securing signatures backing a majority support determination.

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The AADA are thrilled to announce the exclusive and inaugural release of the Automotive Insights Report (AIR), a comprehensive, monthly analysis of the used car market developed in partnership with AutoGrab.

In an effort to enhance our member’s insights into used car market dynamics, the AADA have partnered with AutoGrab, leading provider of automotive market intelligence. Together, we aim to deliver a tailored, and in-depth report that will keep you well informed about the ever-evolving trends in the used car market.

Key Features:

1. Exclusive Data: As an AADA member, you will receive a Dealer-only specialised report each month, providing you with exclusive insights into the used car market. The first of its kind dataset will provide Dealers with a crucial edge in understanding and capitalising on opportunities in the used car market.
2. Monthly Updates: Stay ahead of the curve with timely and relevant information each month, as well as specialised yearly updates.
3. Tailored for AADA Members: Recognising the requirements of our members, the AADA has worked closely with AutoGrab to customise the report, offering a more in-depth analysis that caters specifically to the needs of franchised new car Dealers.

With this indispensable tool, Dealers can gain the clarity needed to align strategies effectively and identify opportunities for growth. The data is taken from analysis by AutoGrab of online classified used car advertising listings, reinforced with actual sales results from used car wholesalers, Dealers, and auction houses.

While our AADA members will enjoy the Dealer exclusive Automotive Insights Report each month, the media and other subscribers will also receive a smaller, more aggregated version of the report which caters to their distinct requirements.

Dealers seeking more granular and local data can contact AutoGrab directly for a tailored solution.

If you are a Dealer of a contributing brand and would like access to the monthly report please email Communications Manager Ashleigh Sykes on asykes@aada.asn.au.

The National Anti-Scam Centre (NASC) have contacted the AADA to advise members they have become aware of a rise in business email compromise scams that target customers of new car dealerships and used car traders.

The NASC is run by the Australian Competition & Consumer Commission and was established in July 2023 to combat the ever-increasing prevalence of scams. It aims to assist with collaboration across industry and government to achieve this.

NASC have provided the attached fact sheet for Dealers that details how the scam typically works, warning signs, and some short advice to protect your business and your customers.

More information about scams and what to do about them can also be found on the ACCC website.

Should you require further information or have a question regarding your business environment, the NASC can be contacted at NASC@accc.gov.au.

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From 10 November 2023 the use, application of or reliance on unfair terms in a wide range of standard form contracts will become illegal, with contraventions attracting new higher maximum penalties, as opposed to previously where it could only be declared void.

These changes are not retrospective and will only apply to new agreements or renewals commencing on or beyond 10 November 2023. However, where a term of a contract is varied or added on or after 10 November 2023, the changes relevant to deciding whether a contract is a standard form contract apply to the whole contract.

Standard form contracts are typically used in industries where there is a high volume of ‘agreements’ occurring and contracts are generally offered on a ‘take it or leave it’ basis. This may include contracts with suppliers, service providers and consumers. Dealers should consider their own compliance with these changes prior to the commencement date.

Standard contract terms may be regarded as unfair if one party to the contract has a significant advantage over the other and it would cause financial or other harm to the other party if enforced.

The reforms also expand the UCT regime to apply to a wider class of small businesses. The significantly expanded definition of ‘small business’, will apply to businesses that employ 100 people or less (increased from 20) or any business with an annual turnover of less than $10 million.

There are a number of resources explaining the changes available, and members are urged to familiarise themselves with these changes prior to their introduction.

Dealers and Dealer Councils should seek legal advice prior to finalising new agreements and be advised that these UCT changes continue to apply to consumer sales contracts and to ensure that these contracts are updated to ensure compliance, particularly, as higher penalties apply.

More information on the upcoming changes can also be found on the ACCC website.

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This is to remind you of the upcoming annual general meeting of the members of the Australian Automotive Dealer Association Limited. The details of this meeting are as follows:

• Date: Tuesday 31 October 2023
• Time: 2:00pm (AEDT)
• Place: Video conference (details provided upon registration)

If you haven’t already, please register via the link below to receive video conference information. Meeting Papers will be issued to all registered attendee members.

REGISTER FOR AADA AGM

At the meeting, members will be asked to consider and vote to:

• accept the annual report
• accept the director’s report
• accept the auditor’s report
• accept the revised AADA Constitution
• accept the annual financial statements
• accept the outcome of the election of directors

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