Archives: Dealer Bulletins

AADA has recently become aware of a situation at a dealership in which an individual, presenting as a regular customer, initiated a dispute over an issue to do with the Takata airbag recall.

The precise details of the dispute are unclear, but the dealer was alarmed to discover that shortly after the incident took place, false, derogatory and potentially unlawful comments had been posted on social media.

Subsequent investigations have revealed that the customer was actually an independent repairer and franchisee of a large, Australia wide franchised repair network.

AADA have reason to believe that this was not an isolated incident and that the franchisee was acting on a franchisor directive, issued to all repairers within the network, to name and shame new car dealers at any given opportunity. This directive is most likely an attempt by the franchisor to win community support in the current debate regarding the availability of technical information, being dealt with as part of the current ACCC New Car Retailing Market Study.

If proven, such actions could be considered misleading and deceptive, deemed an unfair commercial practice or defamatory.

After being informed, by the dealer concerned, that the posts were probably unlawful and could lead to action in the courts, the repairer concerned promptly removed them from social media.

It is unfortunate that dealers are now being forced to defend themselves against instances such as these. Nonetheless, dealers are advised to be aware that there are individuals and groups operating in the market, who seek to discredit new car dealers at any opportunity. Dealers may be targeted and so, as always, should be aware of the prospect of such actions by seeking identification of customers and by monitoring social media closely and responding accordingly, especially where they suspect that a contrived dispute as in this example, is being used to “set them up”.

Yours Sincerely,

David Blackhall

For further information, please contact:

David Blackhall Chief Executive Officer
Australian Automotive Dealer Association Ltd
E: dblackhall@aada.asn.au
M: +61 413 007 833

James Voortman Executive Director Policy & Communications
Australian Automotive Dealer Association Ltd
E: jvoortman@aada.asn.an
M: +61 452 535 696

Brian Savage Executive Director Operations
Australian Automotive Dealer Association Ltd
E: bsavage@aada.asn.an
M: +61 418 377 594

The AADA yesterday attended a conference hosted by the ACCC on its proposed recall notice for a compulsory recall of vehicles with defective Takata airbags. The conference was well attended by a host of delegates and observers from the various vehicle manufacturers.

Manufacturers were asked to account for the activities they have undertaken and to explain the processes in place to conduct the recall. Overall, the message from the OEMs was that they were working successfully with their dealer networks in conducting the recall, as evidenced by the relatively high rates in rectifying the higher risk Alpha airbags. It was noted that the major challenges are sourcing replacement airbags (although this challenge was easing) and consumers not responding to notices.

The key points made to the ACCC were:

• The OEMs do not support a mandatory recall
• OEMs with similar airbag inflators which have not initiated a voluntary recall claimed the research showed no need to extend the recall to another 877,000 potentially affected vehicles, as has been foreshadowed in the notice
• Existing dealer networks are capable of handling the capacity
• These parts should only be handled and replaced by appropriately qualified, trained and equipped dealer technician
• Remote customers are having cars towed across long distances and dealer technicians are flying to remote locations to perform the replacements
• Multi franchised dealers are, when necessary, using technicians from other brands at the dealership
• Dealers are extending working hours in the workshop to meet demand
• OEMs reinforced that for two years they have been suggesting that officials block non-rectified vehicles from obtaining annual registration

In relation to the actions contained in the draft recall notice:

• In general, OEMs were critical of the tight timelines for rectification
• OEMs suggested the timeframe for rectification of the Alpha airbags should change from “within one business day of a consumer contacting the supplier” to within “one day of the replacement part arriving at the dealership”.
• It was also mentioned that the requirement for loan cars and a salvage program would increase compliance costs for OEMs

The ACCC will make a final recommendation to the Minister in relation to the issue of a compulsory recall shortly.

To read a copy of the proposed recall notice, please click here.

The ACCC announced today that the National Warranty Company (NWC) has agreed to make changes to its ‘Extension to Manufacturer’s Warranty’ product after the consumer watchdog expressed concerns that the products, which are sold nationally through dealers for new and used vehicles, were potentially misleading consumers about the benefits, and need for, purchasing an extended warranty.

The ACCC is particularly concerned that:

• “the product name, ‘Extension to Manufacturer’s Warranty’, had the potential to mislead consumers into thinking they received cover on the same terms as the vehicle manufacturer’s warranty, when it was a generic product that contained a number of exclusions and financial limitations not normally found in a manufacturer’s warranty”
• “certain statements contained in the product terms represented that the warranty benefits were in addition to the statutory protections under the Australian Consumer Law (ACL), when there was clear overlap with the consumer guarantee provisions.”

To address these concerns, NWC has agreed to:

• change the name of the product to ‘Optimum Warranty’
• make several amendments to the product terms
• review its other warranty products to ensure compliance with the Australian Consumer Law
• monitor how motor dealers promote and sell its warranty products

In June, news emerged that NWC, a subsidiary of ASX listed McMillan Shakespeare, was subject to an $80 million class action alleging unfair and unconscionable conduct and misleading and deceptive conduct.

Members offering NWC products are advised to ensure that any documentation and processes align with the undertakings that NWC have provided to the ACCC.

To read a copy of the ACCC’s media release, which includes details of NWC’s undertakings, please click here.

David Blackhall
Chief Executive Officer
Australian Automotive Dealer Association Ltd
E: dblackhall@aada.asn.au
M: +61 413 007 833

James Voortman
Executive Director Policy and Communications
Australian Automotive Dealer Association Ltd
E: jvoortman@aada.asn.au
M: +61 452 535 696

On 25 September, the AADA attended a roundtable in Melbourne hosted by the ACCC on its New Car Retailing Industry Market Study. The purpose of the roundtable was for the ACCC to seek industry views on the key findings and recommendations of its market study draft report released in August.

The forum was attended by a wide range of stakeholders, including AADA, AP Eagers, the FCAI, several OEMs, the AAAA, a number of independent repair chains, the MTAA and their state bodies, consumer groups, the Insurance Council of Australia and representatives from ASIC and the ACCC.

The areas of interest to franchised dealers which were covered at the roundtable were:

• Access to service and repair information; and
• Consumer guarantees and warranties.

The discussion on Access to Service and Repair Information ran for almost three hours and the AADA received a good hearing.

The AADA took the opportunity to recognise that independent repairers are an important part of the service and repair industry and franchised new car dealers have no hidden agenda or plan to disadvantage them or reduce their market share.

However, the AADA maintained that the existing Heads of Agreement is working and independent repairers are currently able to access the service and repair information they need. The effectiveness of the agreement is demonstrated by the fact that the dispute resolution provisions of the agreement have never been tested – no independent repairer has formally commenced action arguing information is being restricted.

In the session on consumer guarantees and warranties, there was a broad discussion on the difficulties dealers encounter when trying to resolve customer concerns within the constraints of the dealer agreements.

The roundtable briefly touched on a number of other issues, such as parts, vehicle emissions labelling and telematics.

Following the roundtable, the ACCC indicated that it will be seeking one on one meetings with the various organisations to discuss some of the issues raised in more detail.

The report is due to be finalised by the end of the year.

To read a copy of the AADA’s media release, please click here.

David Blackhall
Chief Executive Officer
Australian Automotive Dealer Association Ltd
E: dblackhall@aada.asn.au
M: +61 413 007 833

James Voortman
Executive Director Policy and Communications
Australian Automotive Dealer Association Ltd
E: jvoortman@aada.asn.au
M: +61 452 535 696

Brian Savage 
Executive Director Operations
Australian Automotive Dealer Association Ltd
E: bsavage@aada.asn.au
M: +61 418 377 594

The Minister for Small Business, Michael McCormack, has today issued a Proposed Recall Notice for a compulsory recall of all vehicles with defective Takata airbags.

The decision, is based on advice from the Australian Competition and Consumer Commission (ACCC) following a safety investigation.

The Proposed Recall Notice requires suppliers to replace all defective Takata airbags by 31 December 2020, and airbags posing the highest safety risk will be prioritised. The recall also includes replacement of ‘like for like’ airbags which were fitted earlier in the voluntary recall as a temporary solution to the lack of supply in the market.

Manufacturers which have sold vehicles with a defective Takata airbag have been invited to register for a conference with the ACCC by Tuesday 3 October and the ACCC will make a final recommendation to the Minister in relation to the issue of a compulsory recall as soon as possible after the conference is held.

Vehicle manufacturers and importers together will have primary responsibility for this matter and we expect dealers with affected brands will be contacted direct by their franchisors.

As it has been doing in recent months, the Government is advising affected consumers to immediately contact their dealer or manufacturer to book in a time to have the airbag replaced.

To read a copy of the proposed recall notice, please click here.

In the meantime, if you have questions please a call any of the team members listed below.

Yours Sincerely,

David Blackhall

For further information, please contact:

David Blackhall Chief Executive Officer
Australian Automotive Dealer Association Ltd
E: dblackhall@aada.asn.au
M: +61 413 007 833

James Voortman Executive Director Policy & Communications
Australian Automotive Dealer Association Ltd
E: jvoortman@aada.asn.an
M: +61 452 535 696

Brian Savage Executive Director Operations
Australian Automotive Dealer Association Ltd
E: bsavage@aada.asn.an
M: +61 418 377 594