22nd September, 2020 ยท Media Release

AADA Welcomes Inquiry Into
Dealer/Manufacturer Relations

The peak body representing Australia’s franchised new car Dealers has welcomed today’s announcement by members of the Senate Education and Employment Committee calling for a full inquiry into the relationship between overseas car Manufacturers and Australian car Dealers.

“We support this inquiry which comes at a time when many Dealers are incredibly anxious about the future of the industry. We hope it will pave the way for reforms to protect Australian Dealers in the same way the US and EU protect their Dealers against the power of large car companies,” said AADA CEO James Voortman.

“GM’s treatment of its Holden Dealers sent shockwaves through the industry, leaving many to question how this was allowed to happen. We have since seen a range of other Manufacturers follow GM’s example and start including unfair and one-sided terms in Dealer agreements,” he said.

“There is plainly a massive power imbalance between Australian Dealers and the multinational car Manufacturers to which they are franchised. Dealers take on the majority of the risk and are compelled to invest very large sums of capital in facilities, personnel, stock and equipment, but are offered very little in the way of protection if a Manufacturer decides to terminate a Dealer, leave the country or completely change its distribution model,” Mr Voortman said.

“This inquiry is crucial as General Motors has now set a benchmark for other offshore car Manufacturers considering changes to their Dealer network,” Mr Voortman said.

“All Dealers are asking for is a greater degree of fairness which recognises the capital and the decades of service they and their employees have put into building a brand. Manufacturers are all Fortune 100 companies who can clearly afford to compensate their Dealers,” he said.

“The AADA is working closely with our members, and will cooperate fully with this inquiry,” Mr Voortman said.

 

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