New Car Retailing Report Provides Direction for Industry

Public news

The Motor Trade Association of South Australia (MTA) today welcomed the final report of the Australian Competition and Consumer Commission’s (ACCC) Market Study into New Car Retailing which will improve the operation of the new car retailing market and provide a roadmap for resolution of a number of longstanding issues in the industry.

MTA CEO Paul Unerkov said that many of the ACCC’s recommendations align with the submissions put forward by the MTA and will benefit vehicle dealers, independent repairers and consumers.

“Dealers and repairers will welcome several of the recommendations, particularly those relating to access to repair information and reform of franchise agreements,” Mr Unerkov said.

“A mandated repair information scheme, complete with an accreditation process or safeguard represents the best way forward to provide security to dealers, independent repairers and consumers.

“Clearly there is still much more to do to finalise the detail of the recommendations in the report, which will require substantial consultation with industry.”

“However, it is pleasing that the findings of the report appear to enjoy broad industry support.”

Key recommendations contained in the report include:

  • Manufacturers’ complaint handling systems, policies and practices that do not comply with the consumer guarantee requirements of the ACL will continue to be targeted through action by the ACCC and fair trading agencies, including enforcement action where appropriate.
  • Manufacturers will be required to:
    • update their dealer agreements and policies to expressly state that obligations under the manufacturer’s warranty are in addition to, and do not exclude or limit, the manufacturer’s obligations to indemnify the dealer under section 274 of the ACL
    • review their dealer agreements, policies and procedures to ensure that these commercial arrangements:
      • do not contain unfair contract terms that go beyond what is reasonably necessary to protect their legitimate interests
      • place appropriate limits on any terms which enable manufacturers to unilaterally vary the agreement and/or operations manuals
  • The introduction of a mandatory scheme for car manufacturers to share technical information with independent repairers, on commercially fair and reasonable terms. This scheme should provide independent repairers with access to the same technical information which car manufacturers make available to their authorised dealers and preferred repairer networks, including environmental, safety and security related information where it is available to dealers.
  • That a mandatory scheme be put in place obliging car manufacturers and other industry participants to achieve the underlying aims and principles of the Heads of Agreement, including those in relation to training and reinforcing existing statutory obligations on independent repairers to insure repairs and servicing are carried out correctly to manufacturer’s specifications to assure the safety of consumers.

The MTA will continue to examine the report in detail, but encourages the ACCC and government to move as swiftly as possible to finalise the details of the recommendations to provide certainty to industry.