The final weeks of February were very difficult for many of the AADA’s members with GM’s announcement that it was dumping the Holden brand altogether and prematurely ending about 200 Dealer agreements in the process.
The decision came as a shock to many Dealers who were led to believe that Holden was here for the long haul. Commitments were made in public and private to Dealers and were accompanied by demands for investment by many in the network.
GM’s actions were not lost on Australia’s political leaders and drew the attention of our Prime Minister, Government Ministers and the Opposition, who met with a delegation of Holden Dealers in Canberra. A Senate Inquiry into Holden’s withdrawal has been called and is due to report by the second week of May.
GM’s actions are by no means unique and various other brands have been withdrawn from Australia over the years. However, the scale of Holden’s exit is unparalleled and the way in which they are allowed to pack up and leave Australia will set the benchmark for other OEMs considering an exit from the country, a rationalisation of their network or a change in their distribution model.
It is vital that Dealers are adequately compensated when an OEM decides to withdraw or substantially change the goal posts. To this end, the AADA is in the process of establishing a framework that can be used to determine the elements reasonable compensation should include and a methodology for calculating it.
This work will set the standard for all cases that might emerge in the future. We hope the AADA’s Industry Standard for Compensation will establish a fair and reasonable framework and enable Dealers to unite and push back against patently unfair offers of compensation by Manufacturers.
The AADA is conscious of the difficulty affecting many of our members at this time and stand ready to support our members in any way possible.