19th October, 2016 · Policy Viewpoint

ACCC launches market study into new car
retailing industry

3 minutes to read

AADA is eager to learn more about the market study the Australian Competition and Consumer Commission (ACCC) has launched into the new car retailing industry in Australia.
ACCC Chairman, Rod Sims, said consumer issues regarding new car retailing “are a priority area for the ACCC” and that it was “motivated by a high level of complaints in the automotive business”.

AADA CEO, David Blackhall, told the recent AADA National Dealer Convention that he had “no idea what the analysis of those complaints might look like”.

“Are they windscreen wipers falling off or transmissions failing five times? No idea. And it’s counter-intuitive if you think about the ever-rising customer satisfaction scores that our dealers get, year after year after year,” he said.

“So I’m a sceptic; I think it’s ideologically driven. I think we automatically get the black hats because they can assign the black hats easily. I don’t think it’s necessarily fact-based, but I would not have the temerity to question Commissioner Sims. If he says he’s got a high level of complaints I believe him, but show me the level of complaints. That’s all I’m asking.”

“We know nothing more than that broad-ranging statement he’s made, and the fact that it will take place over the next year or so. It’s an open-ended issue as far as we’re concerned. It’s a ‘watch and wait’ from our point of view. We’re preparing ourselves, getting our data together, but we have no idea, frankly, what the specifics of this will be.”

The market study will be informed by a range of enforcement, education and research projects focusing on four key areas:

  • Compliance with consumer guarantees obligations and the ability of consumers to enforce their rights.
  • False, misleading and deceptive practices in performance, fuel efficiency, fuel consumption and emissions.
  • The effect on competition and consumers of post-sale care arrangements (such as servicing).
  • Whether consumers and businesses could be affected by any restrictions on vehicle access to data.

“The ACCC and other Australian Consumer Law agencies continue to receive from consumers a high volume of complaints about defects with vehicles, covering a broad spectrum of manufacturers. These complaints reveal that many consumers are having difficulty enforcing their consumer guarantee rights, which are in addition to the warranties provided by manufacturers,” Mr Sims said.

“Following the Fiat Chrysler Australia (Jeep) investigation, the ACCC is considering concerns about compliance with the consumer guarantee provisions in the motor vehicle industry more generally, and is looking at complaints and practices of specific brands,” Mr Sims said.

The ACCC has under way investigations into the car retailing industry, including into the Volkswagen emission issues.

The market study will also review industry practices in the sector to assist in identifying risks to consumers and the competitive process.

“Market studies are an important complement to the ACCC’s compliance and enforcement activities. The ACCC published several studies in the past year and has new market studies under way, including into the cattle and beef sector and regional petrol markets,” Mr Sims said.

The ACCC will be seeking information from the public to inform its study, as well as through collecting data through surveys.

The ACCC will, later this year, release an issues paper which will provide detailed information on the scope of the study and invite written submissions from the public.

A draft report of findings will be released in the first quarter of 2017.

AADA has registered its interest in meeting with the ACCC in order to gain a better understanding of the ACCC’s concerns and to clarify any issues such as consumer guarantees, which are initially dealt with in the Office of Fair Trading or its equivalent in the States and Territories.