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The Australian Automotive Dealer Association (AADA), the peak body representing franchised new car Dealers has welcomed the release of the Government’s consultation paper for a mandatory scheme on the sharing of motor vehicle service and repair information.

“The AADA welcomes this consultation paper and looks forward to working with the Government to inform the details of a service and repair information sharing regime,” said AADA CEO David Blackhall.

“Franchised new car Dealers need a strong independent repairer network, because the task of repairing and maintaining the entire vehicle fleet is too big a task for our members alone”, he said.

“It is critical that this regulation provides access to information on a fair, equitable basis and that sensitive information is shared in a responsible way,” Blackhall said.

“The ACCC recommended that car manufacturers share technical information with independent repairers, on commercially fair and reasonable terms and we would expect to receive information on the same basis,” Blackhall said.

“We look forward to participating in the consultation process so that an effective code of conduct is developed, that meets the demands of all repairers, while safeguarding safety, environmental and security information appropriately, as per the ACCC’s recommendation,” he said.

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The Government’s decision to abolish the point of sale exemption for retail dealers providing car finance has come as a surprise to the new car industry.

The Banking Royal Commission handed down its report today recommending the removal of the exemption of retail dealers from the operation of the National Consumer Credit Protection Act (NCCP Act). Simultaneously, the Government issued its reponse to the report and accepted this recommendation.

“I am surprised given the point of sale exemption was only briefly mentioned in the Royal Commission’s interim report and suddenly, its abolition is now Government policy,” said AADA CEO David Blackhall.

“It is unclear what this policy will mean for the provision of finance at dealerships. It is not certain how many new car Dealers already have credit licences, but we do know that many mid-to-small and regional dealerships do not,” he said.

“I appreciate the Government’s commitment to carefully consider how this reform is implemented. The AADA will make ourselves available to work with the Government to ascertain the impact this will have on Dealers and to ensure that the transition is as smooth as possible,” he said.

“Leadership in this area is with the finance providers and we look forward to working with them to ensure that financiers, Dealers and consumers are not disadvantaged during this transition,”he said.

“It is unclear why the exemption needs to go. Obtaining finance from a dealership is a cost effective, convenient solution for many consumers and the Royal Commission by its own admission repeatedly said that delinquencies in the car finance market are very low,” he said.

The Government has also agreed to changes in the sale of add-on insurance products by Dealers, including working towards a deferred sales model and the imposition of a cap on the amount of commission paid to vehicle Dealers.

“The concept of a deferred sales model is already under consideration by ASIC. We will be urging Treasury to adopt a model which defers the sale for around three to four days and allows informed consumers a waiver,” Blackhall said.

“Allowing ASIC to impose a cap on add-on insurance commissions will only formalise a practice already being employed by the main insurance companies,” Blackhall said.

There will also be a review on commissions for general insurance and consumer credit insurance to test whether the exemption to the ban on conflicted remuneration remains justified, which the AADA looks forward to participating in.

 

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The AADA supports the release of the Senate Committee’s report on electric vehicles but is disappointed in evidence suggesting Dealers are not promoting the sale of EVs.

“There are some important recommendations in this report and new car Dealers are looking forward to playing our part in supplying EVs to the Australian market,” said AADA CEO David Blackhall.

“We are supportive of a public education campaign and a coordinated approach to skills and training. We are also supportive of a CO2 standard, and Australia should work towards an achievable standard that does not punish local consumers and businesses,” he said.

“It is also encouraging that the Committee has not recommended a relaxation of used car imports as was suggested by certain groups,” he said.

“However, it is very disappointing that this report has mentioned evidence claiming that car Dealers are not interested in promoting and selling electric vehicles. This assertion, which was repeated by certain groups throughout the inquiry, is completely false,” said AADA CEO David Blackhall.

“To resist selling EVs would reduce profits and put Dealers in breach of their franchising agreements with vehicle manufacturers, potentially risking their businesses,” said David Blackhall.

“In our numerous representations to this committee, we consistently made the point that new car Dealers are technology agnostic and will sell whatever vehicles our customers want,” said David Blackhall.

“Unfortunately, the authors of this report have quoted the Tesla Owners Club and ignored the evidence of Australia’s 1,500 franchised new car Dealers and the 70,000 people they employ,” he said.

“Electric vehicles are part of the future and Dealers are determined to be part of a thriving industry which supplies them to the market – the primary reason that they are not yet selling well is related to supply, cost and range.”

Talking down the efforts of the tens of thousands of dealership employees across Australia will do nothing to accelerate the uptake of EVs.

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