The Morrison Government has today announced that it will be pursuing a range of reforms to automotive franchising arrangements. This is the strongest commitment yet from the Government that it will be proceeding with reforms which provide franchised new car Dealers with a separate Automotive Code of Conduct or similar protections enshrined in a schedule to the existing Franchising Code.
The announcement comes after the Department of Industry, Innovation and Science released a Regulatory Impact Statement on Automotive Franchising in December 2018 followed by a public consultation which concluded before the Federal Election.
The Government has said they are committed to “creating a level playing field” and “ensuring everyone gets a fair go, including our small and family car Dealers”.
Although the Government’s public statement did not go into any great detail there was a commitment to “provide for more transparent and cooperative end of term and capital expenditure arrangements”.
AADA has welcomed the announcement as progress and has committed to working with the Government to get the best possible outcome for new car Dealers.
We will be insisting that any reforms include:
- linkages between tenure and capital investment
- obligations on OEMs to buy back stock in the event of non-renewal
- inclusion of a framework for claims under the Australian Consumer Law
The Federal Opposition has publicly criticised the Government’s announcement saying it does not provide enough detail and have questioned whether they are backing down.