9th October, 2020 ยท bulletin

Senate Inquiry Into the Relationship
Between Car Manufacturers and Dealers

2 minutes to read

On 7 October, the Senate Standing Committees on Education and Employment elected to extend and expand upon their inquiry into the operations of General Motors Holden.

This extension broadens the original inquiry, which has now become industry wide, rather than just focussed on the behaviour of one OEM. In the revised terms of reference, the committee resolved to investigate the regulation of the relationship between car Manufacturers and car dealership models in Australia, including:

  1. practices employed by Manufacturers in their commercial relations with Dealers, with specific focus on:
    • investment required and tenure provided
    • termination and compensation practices
    • performance requirements
    • behaviour around warranty claims and Australian Consumer Law
    • unfair terms in contracts
    • goodwill and data ownership;
  2. existing legislative, regulatory and self-regulatory arrangements;
  3. current and proposed government policy;
  4. dispute resolution systems and penalties for breaches of the Franchising Code of Conduct;
  5. current and proposed business models in selling vehicles;
  6. legislative, regulatory and self-regulatory arrangements found in international markets; and
  7. the imposition of restraints of trade on car Dealers from car Manufacturers.

This inquiry is an important and comprehensive government sponsored investigation into our industry and comes at a critical time in the fight to preserve the viability of the franchised Dealer model and protect Dealer investments. Retailing arrangements are rapidly changing and many Manufacturers are taking measures to gain greater control of the retailing operations traditionally the domain of franchised Dealers.

The AADA will be consulting extensively with members in the preparation of a submission, however, it is essential that the Senate Committee also hear from Dealers directly. The message of stakeholders with “skin in the game” is very powerful within the halls of government and every Dealers story is unique.

We urge all Dealers to have their say. Any Dealer concerned about being on the public record can request that their evidence, by written submission or orally presented, will be kept confidential.

The closing date for submissions is 30 October 2020 and the Senate Committee will make its final report by 11 December.


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