7th April, 2021 · Member News

Dealer/Manufacturer Relations Senate
Inquiry – Final Report

2 minutes to read

On 18 March 2021, the Senate Committee conducting the Inquiry Into the Relationship between Car Dealers and Manufacturers delivered its final report. This was a long running inquiry which began by looking at the closure of Holden and its suddenly disenfranchised 185 Dealers across the country. The Inquiry provided scrutiny of the behaviour of several Manufacturers and highlighted the impacts of the power imbalance that exists between the Manufacturers and their much larger franchisors.

Over 70 submissions were received and considered by the Senate Committee which also heard public testimonies from the AADA, AADA members and representatives from several Manufacturers, among others.

The Committee concluded its report with seven recommendations which are fully supported by the AADA.

The Recommendations are:

Recommendation 1
3.92 The committee recommends that the Australian Competition and Consumer Commission should expedite its investigations into the behaviour and actions of GM Holden and should commit to provide regular public updates on this investigation and similar investigations into the relationship between manufacturers and dealers in the future.

Recommendation 2
3.93 The committee recommends that the Australian Competition and Consumer Commission proactively ensures that General Motors Australia and New Zealand is meeting its Australian Consumer Law obligations to Holden vehicle owners in relation to warranty and recalls, technical support and access to parts.

Recommendation 3
5.82 The committee recommends that the Australian Government prioritise the new automotive reforms announced on 12 March 2021 and implement the increased fines, mandatory principles and protection of dealers operating as a manufacturer’s agent by 1 July 2021.

Recommendation 4
5.83  The committee recommends that the mandatory best practice principles include a provision for the reimbursement for all reasonable expenses incurred in relation to warranty and recall work, including expenses associated with diagnosis, administration of claims and claim audits.

Recommendation 5
5.84The committee recommends that the Australian Government introduce mandatory binding arbitration to resolve disputes during contracted negotiation in the automotive industry which are not able to be resolved by other dispute resolution mechanisms.

Recommendation 6
5.85 The committee recommends that the Australian Government appoint a senior officer in the Office of the Australian Small Business and Family Enterprise Ombudsman to investigate and coordinate dispute resolution investigations and facilitate mediation and arbitration arising from the transformation of the voluntary best practice principles into mandatory obligations.

Recommendation 7
5.86 The committee recommends that the Australian Government undertake a review into effectively enforcing alleged contraventions of the Competition and Consumer Act 2010 as it relates to the regulation of the relationship between car manufacturers and car dealers.

The full report is available for download from the Senate Inquiry’s website.