11th February, 2021 ยท CEO Message

CEO Message No. 62

2 minutes to read

Happy new year to all in our industry. There is no doubt that 2021 will bring a host of new challenges, but as we learned in 2020, new car Dealers are adept at rising to challenges.

Unfortunately, the new year has started with another example of an OEM overreach. News emerged on 1 February that Renault would be moving to an independent distributor. The reports in the media took the 60-odd Renault Dealers completely by surprise and they remained in the dark until the news was confirmed by the French car giant some four days later. Renault sales have been steadily shrinking and while the merits of this move will be debated, one thing that should never be debated is that Dealers deserve maximum transparency and notice when such decisions are made.

There are naturally other brands in Australia which are considering their future distribution models. The global automotive industry is in a state of flux and an intensely competitive market such as Australia is somewhat exposed. However, when these changes are made it is only fair that OEMs provide maximum transparency and notice of change and that they compensate their Dealers if appropriate.

In Australia OEMs have relatively free reign in establishing Dealer networks, but they should be required to act fairly when reducing their networks, dismantling their networks or changing their distribution models. Acting as a Dealer for a major international car Manufacturer requires significant capital. It demands adherence to very strict brand performance requirements. And it requires a leap of faith from the Dealer that the OEM will get its product line right.

There are significant risks involved and Dealers have always taken the lion’s share of that risk. All they seek in return is fair treatment from their much larger partners. While there are Manufacturers who provide such fairness, all too often it is lacking.

Towards the end of last year, the Government announced principles to apply to all Dealer agreements on a voluntary basis. These cannot work on a voluntary basis and making sure a mandatory set of protections is enacted will continue to be our number one priority this year.

In this newsletter, we celebrate those members who received Australia Day honours. A wonderful achievement and a tribute to the good works they have done. Sadly, we also pay our respects to a number of members who have passed on. Our thoughts are with their families. Our industry is richer for the role they have played in it.