Recommendations and proposals to emerge from the ACCC’s New Car Retailing Industry Market Study will be tabled before the end of this year.
It is expected to be made public soon after an industry round table, with invited key stakeholders including the Australian Automotive Dealer Association.
“ACCC Chairman, Rod Sims, will no doubt provide some insight on the findings when he delivers his opening address at the AADA Convention Auto IT breakfast, and he has also agreed to answer questions without notice at the conclusion of his address,” said AADA CEO, David Blackhall.
Mr Blackhall said the first draft ACCC Report released in August generated spirited debate that created sensationalised reporting by some media outlets who might have done better to check their facts before pillorying an entire industry. The biased headlines were in many cases promoted by industry and consumer organisations with preconceived agendas. It created confusion among consumers and, despite our objections, journalists and editors elected not to deliver balanced views on the debate.
“The media grabbed onto Chairman Rod Sims’ quote that Dealers were making excessive profits on service to the tune of 64 per cent. He was quoting a gross figure, not a net figure, but this fundamental difference was lost on journalists and consequently fell on deaf ears. It makes me wonder what level of financial literacy exists at some mastheads when this kind of rubbish gets through the editorial process.
“A media release headed ‘New Car Industry Put On Notice’, issued by the ACCC, stated that the ACCC was deeply concerned about the level of non-compliance with Australian Consumer Law.
“It amounted to a total condemnation of the industry,” said Mr Blackhall, “but was based on dubious statistics that would not pass muster at a first year stats class in any reputable university.”
“The other headline grabber rolled out by the media – that consumers can only have their new cars serviced by a franchised Dealer – left consumers further confused.
“We have never said that,” he said. Our members are clear that consumers have choice and they make no attempt to restrict that choice – but at the same time there is a clear contract between the customer and the manufacturer spelled out in their warranty terms and conditions. If you inadvertently breach those contract terms as a result of something an incompetent repairer does then of course there can be consequences.
“A draft recommendation to introduce a mandatory scheme for car manufacturers to share technical information with independent repairers on ‘commercially fair and reasonable’ terms is not defined at all in the draft.
“We have made it abundantly clear to the regulator that we have no objections to sharing any information providing all players bear the same costs – the level playing field approach.
“Our Dealers have incurred substantial investments in tools, equipment, facilities and training to ensure vehicles are properly maintained and serviced, and if independent repairers wish to have access to the market we serve then they need to make the same investments, buy the same equipment, do the identical training. It’s as simple as that.
“Unfortunately, in relation to securing a solid outcome for consumers, situations sometimes arise where we are the meat in the sandwich between consumers and manufacturers, which Mr Sims fully understands. We’ve seen some recent glaring examples where Dealers were wanting to help resolve issues, but were prevented from doing so by maladroit administration of warranty and repair policies on the part of some manufacturers.”, Mr. Blackhall said.
To quote from the draft study, it basically confirmed the AADA’s position, saying that given the nature of commercial relationships between Dealers and manufacturers, Dealers are frequently in the challenging position of balancing their Australian Consumer Law obligations to customers, safeguarding their own financial interests and maintaining a long-term commercial relationship with their manufacturer.
These commercial arrangements can have the effect of denying or making it difficult for consumers to readily access the remedies to which they are entitled.
“Another major concern for us, and what consumers should be aware of in any ‘open slather’ approach, is that only NSW and WA require automotive repairers to be qualified, which means that everywhere else in Australia you can hang out a shingle and call yourself a specialist in repairing all makes and models, which is ludicrous,” he said.
“Almost 60% of the 27,000 independent repairers in Australia operate in markets where there is no mandatory licensing of mechanics. We recently saw a NSW government cabinet minister withdraw a policy proposal to allow unqualified people in independent garages remove and replace airbags – a good example of common sense prevailing to avoid serious risk of consumer harm.
AADA continues to work closely with ACCC to ensure the recommendations reflect realistic assessments the impact any regulations will have on the businesses owned by thousands of franchised new car Dealers and their families.
The final report is due in December