6th September, 2021 ยท CEO Message

CEO Messsage No. 68

2 minutes to read

As I write this, Dealers in New South Wales, Victoria and the ACT are operating under restrictions and there remains a great deal of uncertainty about when lockdowns will end. Disappointingly, the nation’s leaders are not even close to being on the same page. The ACT for example is the only jurisdiction to not even allow trading of vehicles via click and collect – a bizarre decision which will only force customers waiting for cars onto public transport where they are vulnerable to the virus. There is also no uniform system of financial support for these lockdowns. The Federal Government has walked away from its JobKeeper package and has instead struck up a series of co-payment schemes with state Governments. We are concerned that too many Dealers continue to miss out on any support – a point we are making with Governments, both Federal and State.

In the franchising space it has been a good few months for automotive Dealers. Dealers have benefited from changes to the automotive provisions of the Franchising Code, an expansion of unfair contract term protections and a class exemption for collective bargaining. In addition, the Government has launched a discussion paper which will be considering further changes to the laws regulating the relationships between Australian car Dealers and Manufacturers.

In particular, the Government is considering three questions. Firstly, should we extend the protections to truck Dealers, motorcycle Dealers and farm machinery Dealers? Second, do we need a standalone code for our industry or does the existing system suffice? And finally, what are our options to bring about binding arbitration to settle disputes?

The AADA will be supporting an extension of the protections to other automotive Dealers. Although we do not technically represent those Dealers many of our members are also truck Dealers and we understand that they face almost the same issues often from the same franchisors.

On the question of a stand-alone code compared to the existing automotive schedule to the Franchising Code, we have always said that we will support any approach that best protects our members. In this regard we are concerned that a recent practice whereby OEMs separate new car sales agreements from service and parts agreements, allows the latter agreements to escape the Franchising Code. Our view is that a simple change in definition under the Franchising Code may remove the need for a stand-alone Code.

The need for binding arbitration was demonstrated during GM’s dispute with its Dealers but it has been strongly reinforced by the court proceedings currently underway between Dealers and large OEMs. It is clearer than ever that the court system favours OEMs who can drag out proceedings at great expense to the Dealer. The Government has made it clear that it has constitutional limitations in this regard but has put forward an interesting option for pre-contractual arbitration. The AADA will continue to push for fair and reasonable changes.

I wish everyone the best during these challenging times.