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The peak body representing franchised new car Dealers has welcomed the bi-partisan report from the Senate Inquiry into the relationship between car Manufacturers and car Dealers in Australia.

The Inquiry ran over 12 months and shone a light onto serious issues within the industry following General Motors’ withdrawal of Holden from Australia. The Morrison Government has already announced a number of reforms which will address the concerns outlined in the report.

“This Inquiry has reaffirmed the existence of a power imbalance between car Manufacturers and the Dealers and made a number of recommendations to provide a degree of balance to these relationships,” said AADA CEO James Voortman.

“The Inquiry has made a number of sensible and fair recommendations which will set an appropriate standard for Manufacturers in their commercial relationships with Dealers,” Mr Voortman said.

“Australian car Dealers desperately want strong and respectful relationships with their Manufacturers, but they also need assurances that the massive investments they have been required to make will be protected,” he said.

“We sincerely hope that this Inquiry, its recommendations and the reforms announced by the Minister for Small and Family Business, Michaelia Cash, will foster better relations between Dealers and all Manufacturers,” Mr Voortman said.

“The Industry would like to commend both sides of Parliament for coming together to launch this Inquiry. It is so important that we have managed to reach a bi-partisan report and we would like to extend a special thanks the Committee Chair Senator Louise Pratt, as well as the work done by Senator Deborah O’Neill and Senator James McGrath,” he said.

“We would also like to thank the Morrison Government for listening to Dealers and their concerns and announcing landmark reforms last week,” he said.

“It is also important to thank all of the Dealers who participated in this process. Speaking out is never easy due to the potential for retribution. A number of Dealers appeared publicly, delivering powerful and heart felt accounts. Dozens more lodged confidential submissions,” Mr Voortman said.

“The industry will continue to work together with Minister Cash as she implements the reforms already announced. In particular, it is crucial that the mandatory principles are implemented as soon as possible, in line with the Senate Inquiry’s recommendation of 1 July 2021,” he said.

“More than anything these reforms will empower Australian Dealers to continue employing Australians, investing in Australia, supporting Australian communities and paying their taxes in Australia,” he said.

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The peak body representing franchised new car Dealers has welcomed the Morrison Government’s landmark reforms to the automotive franchising landscape.

The Government today announced momentous reforms for the automotive industry, which will protect Dealers against the worst abuses by some car companies.

“Today’s announcement will be welcomed by automotive Dealers and their 60,000 employees all across Australia. It will give these local businesses the confidence to employ more Australians, take on more apprentices, invest in their communities and continue to support local sporting teams and charities,” AADA CEO James Voortman said.

“These changes will bring a degree of balance to the relationships between new car Dealers and the Manufacturers to which they are franchised. The reforms are sensible and fair and will bring all Manufacturers up to the standard already being employed by ethically-minded car brands operating in Australia,” he said.

“Mandating the principles for new Dealer agreements, ensuring agency agreements are captured by these regulations and setting appropriate fines for breaches of the Franchising Code are all very welcome measures. Only Manufacturers who ride roughshod over Australian Dealers will have anything to fear from what has been announced today,” Mr Voortman said.

“We also look forward to participating in the further work flagged by the Government on the merits of a stand-alone automotive code, binding arbitration and unfair contract terms,” he said.

“It has been a difficult 12 months for automotive Dealers with General Motors’ termination of 185 Holden Dealers and significant changes flagged by a number of other Manufacturers. The industry is in a state of rapid change and all Dealers ask is that major changes see Manufacturers engage in a fair process and provide adequate compensation,” he said.

“Dealers in regional towns and cities all across the country will be thanking the Morrison Government. In particular we would like to thank the Minister for Small and Family Business Michaelia Cash for sticking up for Australia’s Dealers and working closely with the industry,” Mr Voortman said.

“During the pandemic, the Morrison Government has helped our industry with JobKeeper, support for apprentices and investment incentives. Today’s changes will further enable the industry to take advantage of the recovering economy,” he said.

“Automotive dealerships are important local businesses which employ Australians, invest in Australia and pay their tax in Australia. Dealers look forward to healthy commercial relationships with their Manufacturers, so we can continue to bring many benefits to Australian consumers and communities,” he said.

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The Australian Automotive Dealer Association (AADA) has welcomed the appointment of Bruce Billson as the new Australian Small Business and Family Enterprise Ombudsman.

Mr Billson has been appointed for a five-year term commencing on 11 March 2021.

“Bruce Billson is a former Commonwealth Small Business Minister and has a good understanding of the challenges facing small and family businesses across Australia,” said AADA CEO James Voortman.

“We are confident that Mr Billson will be a strong advocate for small and family business, including more than 3,000 Dealerships which employ 60,000 people,” he said.

“Mr Billson was instrumental in extending unfair contract term protections to small businesses and we look forward to working with him to ensure these protections are fit for purpose,” said Mr Voortman.

“He has a good understanding of the automotive sector, having played a central role in working with all of the key industry bodies on advancing the sharing of service and repair information,” he said.

“On behalf of all of Australia’s new car Dealers, I would like to thank the outgoing and inaugural Ombudsman, Ms Kate Carnell AO. Ms Carnell did an outstanding job at establishing the Ombudsman’s office and she was incredibly supportive of efforts to address the power imbalance between Dealers and Manufacturers,” said Mr Voortman.

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The Australian Automotive Dealer Association (AADA) is pleased to announce that the AADA 2021 Convention & Expo will return to an on-site event at the Brisbane Exhibition & Convention Centre, on Tuesday 14 & Wednesday 15 September 2021.

Hosted by David Speers, a highly respected journalist and host of “Insiders” on ABC TV, “AADA 2021 Future Focused” will deliver two days of industry perspective on policy and advocacy issues affecting this vital industry.

The convention program will deliver for every corner of the franchised dealership, from the invested Dealer Principal through the Salesperson on the floor. Key industry speakers will present a mix of live and virtual sessions with highly relevant content for the industry. To ensure Dealers and allied industry don’t miss any of the content, the program will also be available online, live and on demand.

“AADA 2021 Future Focused” will also feature a comprehensive Expo for vendors’ products and services. On-site and online, delegates can explore and investigate the latest technology, techniques, products and services to help their business and the industry to focus on a brighter future.

Registrations opening soon. Stay tuned at www.aadaconvention.com.au for regular updates and release of “AADA 2021 Future Focused” schedule.

Further information:

Dates: 14 – 15 September 2021
Venue: Brisbane Convention & Exhibition Centre

Contact:Patrick Tessier OAM
Email: Patrick@aadaconvention.com.au
Mobile: +61 412 685 857

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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The Australian Automotive Dealer Association (AADA) notes the Government’s release of the mandatory motor vehicle service and repair information sharing scheme.

The AADA, along with other stakeholders, has been in discussions with the Government and the Treasury about this scheme for several years. The AADA welcomed progress on the scheme, but sounded a cautionary note about its implementation.

“We have been working collaboratively with the Government and other industry participants and while we welcome the exposure draft, it is important that the underlying detail is carefully considered as we move to implementation,” AADA CEO James Voortman said.

“Dealers are required to spend significant sums of money on the latest equipment, facilities and training and this will need to inform the goal of achieving a level playing field. There are huge risks for consumers if inadequately trained and equipped repairers attempt to work on the safety, security or emissions systems on today’s cars,” he said.

“Dealers also use genuine parts in all of their repairs and it is important that we have full disclosure when non-genuine parts are used, as this was a fundamental element of the original voluntary agreement negotiated by Government and Industry,” Mr Voortman said.

“The development of this scheme comes after the failed voluntary agreement on sharing of service and repair information, which shows the limitations of voluntary approaches when regulating commercial relations between offshore Manufacturers and Australian businesses,” he added.

The AADA looks forward to working with the Government and other stakeholders on further developing the legislation.

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The Automotive Principles released by the Federal Government today, are a kick in the guts to all of Australia’s new car Dealers and their 60,000 employees.

This is a major setback for Dealers who this year have struggled with the effects of the pandemic and termination of some 220 Dealers by General Motors (GM) and Honda.

“Just when Dealers thought this year could not possibly get worse, Minster Karen Andrews has sided with multinational car Manufacturers, some of which have treated Australian Dealers and their customers with absolute disdain in 2020,” said AADA CEO James Voortman.

“It is clear that car Dealers in Australia desperately need a strong set of mandatory protections which protect Dealers against the abuses from car Manufacturers. What we have to today is a do-nothing policy cynically released on a Friday afternoon,” he said.

“The voluntary approach being announced by the Government is doomed to fail and the potential damage that can be done before these principles are reviewed in two years’ time is immense. One need only look at how GM reacted when asked by Minister Cash to engage in voluntary arbitration – they ignored and dismissed this request,” said Mr Voortman.

“The Government has said that they want to create an environment ‘attractive to Manufacturers’. If this means allowing foreign importers to walk all over Australian businesses, everyone should be concerned,” he said.

“A Senate Inquiry is currently hearing directly from Dealers about the abuses they have suffered at the hands of Manufacturers. The least the Government could have done is wait for that committee to issue its report,” he said.

“Australia has lost so many dealerships this year, especially in regional areas, due to the actions of car Manufacturers which are a law unto themselves,” said Mr Voortman.

“Make no mistake, this is a victory for multinational car Manufacturers. Companies like GM who terminated Dealers with inadequate compensation only to start a new business in Australia under a different name. Companies like Mercedes-Benz who have announced they will change their model in 12 months’ time and pay no compensation to businesses that have represented them for decades. Companies like Honda which according to testimony in a Senate Inquiry has bullied and threatened terminated Dealers,” said Mr Voortman.

“Claims by the Minister that these principles will protect Dealers and benefit consumers are disingenuous and demonstrate an optimism borne of ignorance. They will achieve no meaningful result and completely fail to hold the Manufacturers to account, as AADA has been telling the Government for over 12 months,” he said.

“It is so disappointing that the Government has sided with big multinational car Manufacturers. It is Dealers who employ 60,000 people. It is Dealers who take on thousands of apprentices. It is Dealers who pay their taxes here in Australia,” he said.

“Dealers across Australia will continue to make their voices heard to try and get the Government to support this industry against the abuses of Manufacturers,” said AADA CEO James Voortman.

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The peak body representing franchised new car Dealers has welcomed the Australian Small Business and Family Enterprise Ombudsman’s call for an overhaul of the dispute resolution framework.

“This year, the limitations of the court system were laid bare in the automotive industry when more than 150 terminated Holden Dealers saw no pathway for justice and settled with General Motors under duress,” said AADA CEO James Voortman.

“All of those Dealers were deterred by the prospect of a prohibitively expensive, time-consuming and mentally draining process,” he said.

“The limitations of our dispute resolution architecture was underlined by General Motors Holdens’ flat out refusal to agree to Small Business Minister Michaelia Cash’s request for them to settle this dispute via arbitration,” he said.

“There is a demonstrated power imbalance between Dealers and the large multinational car Manufacturers to which they are franchised. One of the symptoms of this power imbalance is that very few disputes go through a court process,” he said.

“Dealers all over Australia will undoubtedly support the Ombudsman’s recommendation for reforms to the current dispute resolution framework which has frankly failed them repeatedly,” said Mr Voortman.

There are more than 3,100 franchised new car dealerships all across Australia. They employ 60,000 people, including many apprentices and generate significant economic activity in every city and country town across the nation.

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The Senate Inquiry into the Regulation of the Relationship between car Manufacturers and car Dealers in Australia will hold public hearings today.

Australian Automotive Dealer Association (AADA) CEO, James Voortman, will appear and answer questions on behalf of Australia’s franchised new car Dealers. For a copy of the opening statement, click here.

“2020 has been a tumultuous year for automotive Dealers with the termination of all 185 Holden Dealers and between 30 and 40 Honda Dealers. Further changes are afoot in this industry and it is important that appropriate regulations in place to prevent exploitation of Dealers by the Manufacturers to which they are franchised,” said Mr Voortman.

“There are concerning trends developing around some Manufacturers rationalising networks and changing their distribution models, but not doing so transparently and not providing their Dealers with adequate compensation,” he said.

“Australia needs regulations similar to those which exist in the other industrialised countries to level the playing field between Dealers and Manufacturers,” he said.

“The fact of the matter is that new car Dealers make significant investments and play an important role in an incredibly important industry, however, they are vulnerable to the decisions being made in board rooms in Tokyo, Stuttgart and Detroit,” Mr Voortman said.

The Senate Inquiry is scheduled to deliver its report on 10 December 2020.

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The ACCC has today announced its decision to allow franchisees to collectively negotiate with car Manufacturers without ACCC approval.

This is a welcome and important development for franchised new car Dealers as it provides them and their representative Dealer Councils with the opportunity to raise their shared concerns with the Manufacturers they are franchised to.

AADA CEO James Voortman commended the ACCC on recognising the importance of allowing franchisees to be able to negotiate more effectively and efficiently as a group.

“Franchised new car Dealers have huge trouble negotiating with their large offshore multinational franchisors, given the substantial differences in size and power of the parties involved. This is made even worse when individual Dealers have to try and negotiate alone. This class exemption provides Dealers with a much more effective and efficient negotiation tool and avoids Dealers having to navigate through complex red tape and administrative burdens to obtain collective bargaining rights,” commented Mr Voortman.

“We are delighted that our members can now utilise this exemption, which will be especially useful for Dealer Councils when they are negotiating Dealer Agreements. The New Car Retailing Industry Market Study of 2017 gave the ACCC a good understanding of the imbalanced relationships that exist in auto franchising and this class exemption, which is the first of its kind, will go some way into correcting that imbalance,” he added.

The new class exemption will be available to franchisees from early 2021.

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