CONVENTION TOPIC: CEO DAVID BLACKHALL OUTLINES AADA POLICY OVERVIEW

On 29 October 1941, then British Prime Minister, Winston Churchill, visited his old school of Harrow to speak to the students.

The myth is that Churchill stood before the students and said, “Never, ever, ever, ever, ever, ever, ever, give in. Never give in. Never give in. Never give in,” and then sat down.
In reality he made a complete speech that included these words:

“… Never give in. Never give in. Never, never, never, never – in nothing, great or small, large or petty … Never yield to … overwhelming might …”

Now you might say it isn’t 1941 and we are not locked in a mortal battle for the very survival of our way of life. But I’d disagree. I’d argue that the idea of steely determination, captured in Churchill’s words, is critically relevant to our battle today to preserve a viable business model for franchised dealers and prepare ourselves for the future.

In my more than 30 years in the car business around the world and in Australia, I have never witnessed a more wide-ranging government regulatory agenda than the one we’re experiencing right now.

At a recent meeting of the Australian Motor Dealer Council (which comprises the Chairmen of the various brand Dealer Councils), the AADA team outlined what we call the ‘Vital Five’ regulatory issues of today – which is in turn a sub-set of over 20 major policy projects we are presently managing.

Let me quickly run you though the ‘Vital Five’ and our action status on each:

Priority #1 – ASIC review of flex-commissions and origination fees

AADA is working with ASIC at finding ways to address the regulator’s key concerns without unrealistically compromising franchised Dealers’ business viability. Following two detailed submissions to ASIC and telephone and face-to-face discussions, we believe we are making some progress.

In particular, ASIC is showing a willingness to listen to our point of view and to investigate different levels of commissions and origination fees under different models. Working with our Dealer F&I professionals and our accounting advisors, we were able to share with ASIC a sophisticated income model that demonstrated beyond doubt that the original proposals and timing are not realistic.

This consultation process will continue over the next three months and we will keep you updated through our newsletters and website.
This issue is without doubt the single most significant regulatory challenge we face.

Priority #2 – Personal imports

Throughout the election campaign this issue bubbled to the surface in various ways. The most important development was the written endorsement of the AADA’s position by Senator Nick Xenophon, who came out publicly opposing the plan.

The electoral success of the Nick Xenophon Team is an encouraging sign that we may have tactical options on this issue if it continues to be Coalition policy. On this latter point, our discussions with various MPs lead us to the view that a significant number of government back-benchers are not sold on the idea.

This issue is far from resolved, but we do have some interesting cards to play if it gets to an end game.

Priority #3 – Review of access to Service and Repair Information Agreement

The Hon Kelly O’Dwyer MP (Assistant Treasurer in the prior government) initiated a review of the 2014 industry agreement on this matter. Minister O’Dwyer intends, among other things, to consider establishment of a mandatory web portal as a repository for the relevant repair information. It appears that existing portals are not considered adequate – but we have been given no reason as to why the government has formed that opinion.

We believe the Minister’s interest in this stems from strenuous agitation and a misinformation campaign by the AAAA. The fact is that independent repairers already have access at low cost to relevant information reasonably required to run their businesses.

This one is all about hidden agendas to flood our market with non-genuine reverse-engineered parts.

We will engage with the new Minister as soon as required to ensure the real facts are tabled.

Priority #4 – ACCC market study of new car retailing

This ‘no notice’ added starter from the competition and consumer regulator will inquire into:

  • compliance with consumer guarantees obligations and the ability of consumers to enforce their rights
  • false, misleading and deceptive practices regarding performance, fuel consumption and emissions
  • after sale servicing arrangements including capped price plans, and
  • restrictions on access to vehicle data.

In launching this review, ACCC Chairman, Rod Sims, referred to ‘a high volume of complaints’ from consumers over unrectified vehicle defects.

We have no information as to the source of Mr Sims’ data for such an assertion. Obviously we will engage as needed when the ACCC issues paper lands later this year.

Priority #5 – Australian consumer law review

This review, which has been under way for over a year, focuses on so-called ‘lemon laws’, unfair contracts, price transparency and a range of other related matters. AADA staff attended a Treasury forum, conducted direct meetings with Treasury and prepared written submissions on behalf of dealers during the last year. We are working closely with our colleagues at the Federal Chamber of Automotive Industries on these matters.

This quick snapshot gives you an idea of some of the complexity of overlapping regulatory activity presently aimed at our industry.
At AADA we remain energetically committed to effective advocacy on behalf of all franchised Dealers. We face many challenges from well-funded groups that do not have our best interests at heart and are attempting to influence legislators and regulators to our detriment. To put it in terms that one of my early bosses in the car business always used, “They want to eat our lunch…”

Our job is to ensure this does not happen.

You can help by making sure your teams are fully aware of these matters, by meeting with and presenting the facts to your local MPs, and by attending the AADA Convention in September to get an update on the ‘Vital Five’ and ensure your individual voices are heard.

Churchill got it right – we must … never, never, ever … give up on these key issues.

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