5th February, 2021 ยท Media Release

Dealers Blindsided by Renault Decision

The peak body representing franchised new car Dealers has expressed concern over the complete lack of notice or consultation following the decision by French Manufacturer Renault to relinquish its Australian business and appoint an independent distributor to represent the brand.

“It is very disappointing that Renault Dealers heard about this announcement in the media. These Dealers have contractual agreements with Renault Australia and have invested huge sums of money to represent the brand and service Renault customers across Australia. For Dealers to be treated in this way, with absolutely no prior notice, is disgraceful and is yet another example of the contempt that some Manufacturers have for their Dealers,” AADA CEO James Voortman said. “Dealers we have spoken to are in shock at this announcement and cannot understand how this can happen when they have existing contractual agreements with Renault that have years to run.”

“This is no way for a large multinational firm to treat Australian small and family businesses, but sadly it comes as no surprise considering some of the behaviour we have seen from the likes of General Motors, Honda and Mercedes,” he said.

“Renault Australia employs about 50 people in Australia yet here they are making decisions that effect a Dealer network which collectively represents tens of millions of dollars in facilities and employs hundreds of Australians. It’s appalling that they don’t respect their Dealers enough to bother consulting with them and notifying them of their plans.

“In a true partnership there should be maximum transparency when major changes are being considered, but too often Dealers are kept in the dark around important issues which are crucial to their financial viability,” he said.

“Today, the Senate Committee inquiring into the relationship between car Manufacturers and car Dealers in Australia is holding its final day of hearings. This inquiry has heard from a number of Dealers about the power imbalance that exists between Dealers and the Manufacturers to which they are franchised,” Mr Voortman said.

“Unfortunately, the Government believes a voluntary set of principles it released late last year will address this power imbalance, but we are already receiving reports from Dealers that Manufacturers are refusing to incorporate these principals into new Dealer agreements,” he said.

“After the demonstrated market failures that have occurred over the past 12 months and will continue to occur, it is clearer than ever that Australia needs to follow the lead of other overseas nations and adopt strong mandatory automotive franchising protections for Dealers,” he said.

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