8th September, 2019 · CEO Message

CEO Message No. 47

2 minutes to read

Hundreds of automotive industry professionals will gather at the Melbourne Convention and Exhibition Centre next week for the AADA’s annual Convention. The Convention provides unparalleled opportunities for networking, professional development and collaboration. The theme for this year’s event is 2020 + Beyond: A vision for car retailers and the delegates will benefit from an excellent array of speakers who will deliver insights and solutions to many of the issues affecting car retailers.

In recent years, the Convention has provided the AADA with a platform to achieve its advocacy goals, particularly the need for an Automotive Code of Conduct. In 2017 in Sydney, ACCC Chair Rod Sims addressed the Convention and spoke of the need for OEMs to stop squeezing their Dealers. In 2018, on the Gold Coast, the Federal Opposition Labor Party announced its support for an Automotive Code of Conduct, a commitment from the Government followed a few months later. The need for an Automotive Code will feature again at this year’s event in a highly anticipated panel session.

Achieving a better balance in our relations with OEMs is the AADA’s number one priority. Frustratingly, the Government has adopted a siloed approach to the development of better protections for Dealers and is addressing the issue through five separate processes:

  1. The Industry Department under Minister Karen Andrews is proceeding with reforms to franchising arrangements between Dealers and OEMs and is looking at a number of elements to be included in an Automotive Code or a schedule to the Franchising Code.

  3. There is Governmental Taskforce which is addressing the question of reforms to the Franchising Code of Conduct.
  4. Consumer Affairs Ministers will be looking at options to strengthen Australian Consumer Law, including regulations around compelling Manufacturers to better support and indemnify their Dealers.

  6. The Commonwealth Treasury is currently considering reform to Unfair Contract Terms, which, if applied to Dealers, could remove the Manufacturers’ right to unilaterally change Dealer Agreements.

  8. The ACCC is looking at implementing a class exemption that would allow franchisees to collectively bargain with their franchisor.

Each and every one of these processes will potentially have significant consequences for the future of OEM/Dealer relations. AADA believes that these issues should all be addressed under an Automotive Code of Conduct that would address the clear imbalance between Dealers and OEMs. AADA will be strongly engaging in each and every one of these processes while also strongly urging Government to take a joined-up approach.

We are confident that better protections for Dealers are coming. However, there is much hard work ahead of us.