Yesterday, the Senate Committee for Education and Employment released its final report into the Relationship Between Car Manufacturers and Car Dealers in Australia.
The inquiry was a comprehensive review into Manufacturer / Dealer relations and received over 70 submissions from interested parties as well as hearing public testimonies from several franchised new car Dealers.
The inquiry proved to be a very important platform from which the AADA and Dealers were able to demonstrate the effects of the power imbalance that exists between Manufacturers and Dealers.
The report makes seven recommendations, which are as follows:
- Recommendation 1
3.92 The committee recommends that the Australian Competition and Consumer Commission should expedite its investigations into the behaviour and actions of GM Holden and should commit to provide regular public updates on this investigation and similar investigations into the relationship between manufacturers and dealers in the future.
- Recommendation 2
3.93 The committee recommends that the Australian Competition and Consumer Commission proactively ensures that General Motors Australia and New Zealand is meeting its Australian Consumer Law obligations to Holden vehicle owners in relation to warranty and recalls, technical support and access to parts.
- Recommendation 3
5.82 The committee recommends that the Australian Government prioritise the new automotive reforms announced on 12 March 2021 and implement the increased fines, mandatory principles and protection of dealers operating as a manufacturer’s agent by 1 July 2021.
- Recommendation 4
5.83 The committee recommends that the mandatory best practice principles include a provision for the reimbursement for all reasonable expenses incurred in relation to warranty and recall work, including expenses associated with diagnosis, administration of claims and claim audits.
- Recommendation 5
5.84 The committee recommends that the Australian Government introduce mandatory binding arbitration to resolve disputes during contracted negotiation in the automotive industry which are not able to be resolved by other dispute resolution mechanisms.
- Recommendation 6
5.85 The committee recommends that the Australian Government appoint a senior officer in the Office of the Australian Small Business and Family Enterprise Ombudsman to investigate and coordinate dispute resolution investigations and facilitate mediation and arbitration arising from the transformation of the voluntary best practice principles into mandatory obligations.
- Recommendation 7
5.86 The committee recommends that the Australian Government undertake a review into effectively enforcing alleged contraventions of the Competition and Consumer Act 2010 as it relates to the regulation of the relationship between car manufacturers and car dealers.
The full report is available for download from the Senate Inquiry’s website.
The Federal Government announcement last week regarding automotive franchising legislation is welcome news for Dealers and we are pleased that the recommendations contained in the Senate Committee report align closely with commitments already given by the Prime Minister and Minister Michaelia Cash on 12 March 2021.
19 March 2021 – Senate inquiry into car dealerships prompts overhaul of franchising rules,by Rhiana Whitson, ABC News
19 March 2021 – General Motors slammed as un-Australian over treatment of Holden dealers by Senate inquiry, by Rhiana Whitson, ABC News
19 March 2021 – General Motors was ‘un-Australian’ and treated dealers with disrespect when Holden closed, by Royce Kurmelovs, The Guardian News
19 March 2021 – Long-awaited car industry report urges fix for broken dealership system, by David Ross, The Australian
19 March 2021 – Senate committee slams GM’s handling of Holden closure, by Sam Jeremic, The West Australian
18 March 2021 – ACCC urged to push on with Holden probe, by Tim Dornin, Oberon Review
18 March 2021 – Senate inquiry measuring impact of Holden’s departure from Australia, by Tim Dornin, 7 News