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Australia’s peak National, State and Territory automotive representative organisations have reached a historic agreement at an Industry Summit on critical positions and pathways to achieve the considered and practical transition and electrification of the national motor vehicle fleet.

Representing thousands of businesses that make, sell, distribute, provide novated leasing, service, repair, supply aftermarket parts, components, and accessories, dismantle, recycle, and train tens of thousands of automotive professionals, the peak organisations developed and agreed to more than 25 principles including:

• Embracing the electrification of the Australian motor vehicle fleet.
• Mandating CO2 targets, not Electric Vehicles (EV) targets.
• Supporting the Federal Government in developing a National Zero and Low Emission Vehicle (ZLEV) Electrification Transition Strategy.
• Considering the entire registered vehicle fleet and the needs and requirements of Australians who own and operate them.
• Maintaining the safety, security, service, repair, and efficiency of the legacy Internal Combustion Engine (ICE) fleet.
• Opposing the introduction of bans that limit consumer choice and remove options for meeting car owners’ needs and Australia’s emission reduction targets.
• Ensuring Government targets and milestones are ideally Federally led (or at least nationally consistent), are realistic, supported by facts and sound qualitative data, and applied to an Australian context.

The organisations welcomed and congratulated the Albanese Labor Government for its decisive action in fulfilling its Fringe Benefits Tax exemption for Electric Vehicles promise. The legislation was in the first batch of 13 Bills introduced to the Parliament and will encourage the uptake of EVs once passed.

Automotive Organisation leaders shared and discussed comprehensive global and domestic data analysis on the future production and delivery of ZLEVs past 2030 (particularly to the Australian market); impacts and use of targets, milestones, incentives, subsidies, and penalties; jobs and skills; tariffs and taxation; fuel standards and security; legacy fleet management and maintenance; and awareness and education.

Over the coming weeks, the automotive organisations will engage with stakeholders, governments, and communities and share critical data and information to better balance discussion and partner with the Commonwealth Government to plan the actions necessary to reduce motor vehicle-sourced CO2 and GHG emissions.

 

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The peak body representing franchised new car Dealers notes the official release of the ACT Government’s Zero Emissions Vehicles Strategy 2022-30.

AADA acknowledges the strategy contains a number of good initiatives which support the transition to EVs and should help make ZEVs more affordable, but remains concerned about the proposed ban on ICE vehicles from 2035.

“We still hold concerns around the foreshadowed phase out of light internal combustion engine vehicles from 2035, but are pleased that the Government has said it will review this milestone to 2035,” said AADA CEO James Voortman.

“In other global markets ICE bans have been preceded by vehicle emission standards and generous incentives, neither of which currently exist in Australia,” he said.

“If we have learned anything in the past two years it is that the new vehicle supply chain is incredibly fragile. While we hope that we are able to supply 100% ZEVs by 2035, there are too many unknown variables to say with confidence that we can – reviewing this target in the lead up to 2035 is a sensible commitment,” he said.

“We agree with the ACT strategy that the Federal Government should take a leadership role on the emergence of ZEVs and would urge a national approach on areas such as emissions standards, vehicle taxation and vehicle standards – leaving it to the individual state and territory governments to set their own policies is not in the best interest of consumers or businesses,” he said.

We welcome the ACT Government’s commitment to work with industry to reach the targets outlined.

 

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The peak body representing franchised new car Dealers is concerned over reports the ACT Government will ban internal combustion engine (ICE) vehicles by 2035.

 

“We have serious concerns that this policy will have adverse consequences for the automotive industry, the people they employ and consumers in the ACT,” said AADA CEO James Voortman.

 

“Electric vehicles are currently more expensive and at present there is a distinct lack of choice in available makes and models. These factors may well change by 2035, but this ban has been foreshadowed in an environment where there is great uncertainty,” he said.

 

“The big risk is that people hold onto their older, more polluting cars for longer which will do nothing for reducing emissions.”

 

“It is unclear how the ACT will enforce this ban and prevent consumers from simply purchasing an ICE vehicle across the border and re-registering it here as a used car,” said Mr Voortman.

 

“Rather than a crude ban on ICE’s, the best way to lower emissions is to put a technology-agnostic CO₂ standard in place, so that Manufacturers have a clear understanding of what they need to achieve and are given the freedom to deploy any technology to achieve that goal.”

 

“The transition to low emissions vehicles will have major consequences for Canberrans and all Australians and it is critical that we develop a national strategy to facilitate the transition,” he said.

 

“This is another example of why the transition to low emissions vehicles should be led by the Federal Government, which controls the importation of new vehicles into the Australian market,” Mr Voortman said.

 

“Disappointingly, there has been no consultation on this major change and automotive businesses in the ACT are left scratching their heads and asking what the future holds for them.”

 

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The Motor Vehicle Information Scheme (MVIS) comes into effect as of tomorrow, 1 July 2022, allowing independent repairers the option of purchasing vehicle service and repair information from car Manufacturers and other information providers.

The scheme will create a level playing field in the automotive service and repair market, allowing independent repairers to obtain the information OEMs share with their Dealers on fair and reasonable commercial terms.

“Franchised new car Dealers welcome the competition. Our technicians are factory trained in the latest service and repair techniques and they have the most up to date Manufacturer specified tools and equipment. Franchised Dealers have and always will have an important role to play in the service and repair market,” said AADA CEO James Voortman.

“Dealers already have good relationships with their local independent repairers to whom they regularly sell genuine parts and accessories. There are over 20 million registered cars in Australia and keeping them safe and reliable is a job bigger than any one sector of the service and repair industry,” he said.

“The AADA is proud to have played a part in establishing the scheme, working collaboratively with our industry colleagues at the FCAI, AAAA and MTAA. Together, our respective organisations have formed the Australian Automotive Service and Repair Authority (AASRA) which has been appointed by the Australian Government as the Scheme Adviser, responsible for managing the scheme and reporting to government on its progress. Never before have our organisations worked so closely together and this serves as a powerful example of what we can achieve when we work co-operatively,” he said.

The AADA commends Assistant Minister for Competition, Charities and Treasury, Dr Andrew Leigh, for his long standing support of the scheme. We look forward to working with the Government and our fellow automotive industry bodies in implementing these regulations.

 

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The peak body representing franchised new car Dealers has welcomed the Federal Budget’s provision of fuel tax relief but called on the Government to commit to structural tax reform in the automotive industry.

“While today’s Budget responds to the current cost-of-living pressures being experienced by so many car owners, we desperately need a national plan for the major changes facing the automotive industry,” AADA CEO James Voortman said.

“In the lead up to the reintroduction of the full fuel excise in September 2022, the Government should consult widely on reforming this heavily taxed sector,” he said.

“Dealers’ customers provide tens of billions in taxes annually to federal, state and territory governments. Halving the fuel tax for motorists for six months will relieve some pressure in the short term, but what is desperately needed is a wholesale review of the automotive taxation system in Australia,” said Mr Voortman.

“This budget shows that motorists will be paying billions in taxes, such as import tariffs, the luxury car tax, fringe benefits tax, GST and excise. With Australia no longer manufacturing passenger vehicles and with the emergence of low emissions vehicles (LEVs), it is questionable whether our current automotive taxation regime is fit for purpose,” he said.

“This is a time of immense change in the automotive industry, and we are seeing state and territory governments follow their own paths on crucial issues such as provision of incentives for LEVs, vehicle taxation and road user charging. We simply need national leadership,” said Mr Voortman.

 

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The peak body representing franchised new car Dealers has welcomed the Morrison Government’s announcement of increased penalties for breaches of the Franchising Code of Conduct.

“Stronger penalties in conjunction with recently introduced reforms to the Franchising Code of Conduct are good for small businesses and they are good for franchised new car Dealers,” said AADA CEO James Voortman.

“The penalties come after a series of franchising disputes between automotive Dealers and vehicle Manufacturers and they provide a greater deterrent for those franchisors which breach the Franchising Code of Conduct,” he 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 encourage all Manufacturers to rise to the standard already employed by ethically-minded car brands operating in Australia,” he said.

“Franchised new car Dealers are determined to work with Manufacturers in good faith in this time of great change in the automotive industry. The Government’s reforms are not aimed at stopping change, but rather ensuring it is conducted in a fair and reasonable manner,” said Mr Voortman.

“We would like to thank the Minister for Small and Family Business, Stuart Robert, for the work he and other members of the Government have undertaken in bringing about these landmark reforms in recent times,” 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.

 

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The AADA has welcomed consultation on options to ensure businesses comply with the consumer guarantee provisions in the Australian Consumer Law.

“New car Dealers are very much focused on providing their customers with a first-class experience and we welcome the Government’s efforts in trying to ensure compliance with consumer guarantees,” said AADA CEO James Voortman.

‘It is encouraging that the regulation impact statement has identified options to strengthen supplier indemnification. The ACCC’s market study into the new car industry highlighted the issue of Manufacturers not indemnifying their Dealers,” he said.

“Too often Dealers, which are the suppliers under the ACL, are the meat in the sandwich caught between the customer and the Manufacturer of the vehicle when there is a request for a remedy” Mr Voortman said.

“Motor vehicles are a high value purchase and require ongoing maintenance which is often conducted through the Dealer network. Dealers often suffer significant financial loss by replacing or refunding a vehicle only to be told they will not be indemnified,” said Mr Voortman.

The AADA has previously expressed concern around practices such as warranty extrapolation and denial of warranty payments as well as terms in franchise agreements, which:

• prohibit Dealers from making admissions of liability without prior approval of a Manufacturer;
• require Dealers to obey Manufacturer instructions in relation to a consumer’s request, complaint, claim or legal proceeding; and
• state Dealers will lose their right of indemnity if they did not adhere to such Manufacturer instructions.

The AADA looks forward to working with the Government and other stakeholders through this consultation process.

 

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The peak body representing franchised new car Dealers has responded to the ACCC’s conclusion of its investigation into General Motors’ conduct towards Dealers in withdrawing the Holden brand from Australia.

The ACCC announced it was concerned by the behaviour of GM, but it was concluding its investigation so as not to prejudice the legal action being undertaken by Holden Dealers against GM.

“This will be disappointing news for many ex-Holden Dealers, but General Motors should not see this as vindication of their actions,” said AADA CEO James Voortman.

“The ACCC has by no means endorsed their actions, labelling its treatment of Dealers as ‘a lesson to all franchisors of what not to do’ and ‘damaging the General Motors brand’,” he said.

“The ACCC’s comments came after a bi-partisan Senate committee censured General Motors for their treatment of Holden Dealers, employees and their families,” he said.

“GM’s actions led the Government to introduce reforms on 1 July of this year which would prevent other car Manufacturers following their actions. These are important reforms for the Australian automotive industry and we will continue to monitor the operation of these laws,” Mr Voortman said.

“The ACCC has been very clear that it is not pursuing this matter because it does not want to prejudice the private actions being taken by Dealers against General Motors,” he said.

The AADA will continue to support those Dealers who are battling GM in court.

The ACCC is looking into whether Holden’s car servicing arrangements, and the decision to end the ‘lifetime’ capped price servicing program, raise any issues under the Australian Consumer Law.

 

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