Archives: Media Releases

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.

Download Media Release

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.

Download Media Release

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.

Download Media Release

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.

Download Media Release

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.

Download Media Release

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.

Download Media Release

The peak body representing franchised new car Dealers has welcomed today’s Budget as an important step in driving the recovery in the automotive industry and the wider economy.

“We hope the measures announced in the Budget will be a shot in the arm for the industry, which had been struggling even before the pandemic and has now experienced 30 months of consecutive falling sales,” said AADA CEO James Voortman.

“The Government is encouraging businesses to invest and employ more people while bringing forward tax cuts will give consumers more disposable income which will trickle down into the economy,” he said.

“JobKeeper payments were crucial in allowing Dealers to stay connected to their employees through the first six months of this crisis. We acknowledge the ongoing commitment to employment through the support offered for businesses employing new apprentices and unemployed youth,” he said.

“This Budget acknowledges that business investment will be a crucial part of Australia’s economic recovery through the newly announced temporary full expensing coupled with the instant asset write-off,” said Mr Voortman.

“Once again, we are disappointed the Government has resisted removing some of the legacy automotive taxes for an industry that is doing it tough,” said AADA CEO James Voortman.

“The import tariff and the luxury car tax are protecting a domestic manufacturing industry which no longer exists and their removal could benefit consumers and retail businesses,” he said.

Download Media Release

The peak body representing Australia’s franchised new car Dealers has welcomed the Government’s lending reforms which will free up credit and boost the economic recovery.

“These reforms are sensible and strike a good balance between freeing up credit and protecting consumers,” said AADA CEO James Voortman.

“Under these changes access to credit for consumers looking to buy a car will be less onerous and application timeframes will be more responsive,” he said.

“As the Australian economy recovers from the effects of this pandemic, it is absolutely crucial that we allow credit to flow appropriately. We simply cannot afford to discourage consumers and businesses from lending,” Mr Voortman said.

“There is no doubt that the overly strict application of the responsible lending obligations has contributed to new car sales falling for 29 consecutive months. We hope today’s announcement will breathe some life into our industry,” he said.

“The Government should be congratulated. Over the past few years it has done the hard work and implemented various consumer protections and is now in a position to make this important change to our lending framework,” he said.

Download Media Release

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.

 

Download Media Release