14th May, 2020 ยท Media Release

Treatment Of Holden Dealers
Demonstrates Need for Regulation

The peak body representing new car Dealers strongly supports Senator James McGrath’s statement in the Senate calling out General Motors’ poor treatment of local Australian car Dealers.

“The COVID-19 crisis has overshadowed the actions of a multinational, Fortune 500 company virtually ending its more than a 100-year association with Australia and treating local Dealers very poorly in the process,” AADA CEO James Voortman said.

“After announcing it was terminating 185 Dealers across Australia, the compensation offered to those Dealers has been described as totally inadequate and not one Dealer has accepted the offer,” he said.

The behaviour of Holden, along with Honda more recently cutting their operations in Australia, again highlights the risks that many local car Dealers face and the imbalance that exists between them and the large foreign multinational car companies.

It’s not just the car companies pulling out of Australia who are a threat to local Dealers but the unfair terms that many of them face in their commercial arrangements are an ongoing problem, not just for the local Dealers but also for Australian consumers and small business who rely on them.

That is why AADA has been working with the Government on draft automotive franchising laws due to be finalised in the coming weeks. It is crucial that these laws are strengthened so that Dealers are given protections similar to those afforded to Dealers in countries like the US and the EU,” Mr Voortman said.

“Since the emergence of the COVID-19 crisis, GM have reportedly turned the screws and failed to budge on their initial compensation offer, telling Dealers their ability to be a future authorised service Dealer is dependent on them accepting the offer,” Mr Voortman said.

“After so many Holden Dealers have given so many years to this brand, it is incredibly disappointing that during a very tough time for the industry, GM are not exiting Australia in a fair and dignified manner despite their assurances that they would do so,” he said.

“We have seen Holden terminate all of its Dealers and Honda have cut a substantial portion too. If these multinationals need to withdraw or restructure their networks, so be it, but there must be a set of regulations that ensure they do so fairly,” he said.

“Dealers are currently doing it extremely tough with some of the worst sales figures in living memory. The ability to recover from this economic downturn will be greatly assisted by laws which protect Dealers against the abuses of multinational vehicle Manufacturers,” he said.

We need local Dealers to provide local jobs and work for local small businesses, and we need to encourage and support local Dealers to invest and grow their business, especially as we look to recover from the terrible impacts of drought, bushfires and Covid-19.

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