4th June, 2020 ยท CEO Message

CEO Message No. 55

< 1 minute to read

On 29 May, the Federal Government introduced regulations for New Vehicle Dealership Agreements. The regulations apply from 1 June and will regulate the commercial relations between new car Dealers and OEMs. The introduction of these specific laws represents a recognition by the Government of the power imbalance that exists between Dealers and their Franchisors.

These are important protections, but the AADA believes they need to go much, much further. They have not covered important elements, such as compensation, warranty practices and the insecurity of tenure.

Levelling the playing field between Dealers and OEMs is the AADA’s number one priority. We will continue to speak up for Dealers and more importantly seek further legal protections.

The immediate next steps will be working with the Industry Department and Minister Karen Andrews on two issues – an Industry Standard for Compensation and Security of Tenure. General Motors’ conduct over the past few months has demonstrated the need for an objective compensation standard. We know other OEMs are considering their future models and while they have the right to do so, it is only fair and reasonable that adequate compensation is offered to those affected Dealers.

There will also be an opportunity to further boost protections through the reform of the wider Franchising Code of Conduct, the review of Unfair Contract Terms and work on the relations between OEMs and Dealers in relation to the Australian Customer Law.

This week represents a good first step and we have achieved something many sectors of our economy do not have – a set of legal protections specific to our industry. This should not be underestimated, but this by no means represents the end and our work will continue.