The Senate Committee for Education and Employment has urged the Australian Competition and Consumer Commission (ACCC) to expedite its investigations into the behaviour and actions of GM Holden.

On 19 March, the Committee released its final report into the Relationship Between Car Manufacturers and Car Dealers in Australia, making a total of seven recommendations.

The Committee said the ACCC should commit to providing regular public updates on the Holden investigation and similar investigations into the relationship between Manufacturers and Dealers in the future.

It also recommended that the ACCC proactively ensured that General Motors Australia and New Zealand was meeting its Australian Consumer Law obligations to Holden vehicle owners in relation to warranty and recalls, technical support and access to parts.

The other recommendations were:

  • That the Australian Government prioritise the new automotive reforms announced on 12 March 2021 and implement the increased fines, mandatory principles and protection of Dealers operating as a Manufacturer’s agent by 1 July 2021.
  • That the mandatory best practice principles include a provision for the reimbursement for all reasonable expenses incurred in relation to warranty and recall work, including expenses associated with diagnosis, administration of claims and claim audits.
  • That the Australian Government introduce mandatory binding arbitration to resolve disputes during contracted negotiation in the automotive industry which are not able to be resolved by other dispute resolution mechanisms.
  • That the Australian Government appoint a senior officer in the Office of the Australian Small Business and Family Enterprise Ombudsman to investigate and coordinate dispute resolution investigations and facilitate mediation and arbitration arising from the transformation of the voluntary best practice principles into mandatory obligations.
  • That the Australian Government undertake a review into effectively enforcing alleged contraventions of the Competition and Consumer Act 2010 as it relates to the regulation of the relationship between car Manufacturers and car Dealers.

The inquiry was a comprehensive review into Manufacturer/Dealer relations and received over 70 submissions from interested parties as well as hearing public testimonies from several franchised new car Dealers.

The inquiry proved to be a very important platform from which the AADA and Dealers were able to demonstrate the effects of the power imbalance that exists between Manufacturers and Dealers.

AADA CEO James Voortman welcomed the bi-partisan report, which was the result of an Inquiry that ran over 12 months and shone a light onto serious issues within the industry following General Motors’ withdrawal of Holden from Australia.

“This Inquiry has reaffirmed the existence of a power imbalance between car Manufacturers and the Dealers and made a number of recommendations to provide a degree of balance to these relationships,” Mr Voortman said.

“The Inquiry has made a number of sensible and fair recommendations which will set an appropriate standard for Manufacturers in their commercial relationships with Dealers. Australian car Dealers desperately want strong and respectful relationships with their Manufacturers, but they also need assurances that the massive investments they have been required to make will be protected.

“We sincerely hope that this Inquiry, its recommendations and the reforms announced by the Prime Minister and outgoing Minister for Small and Family Business, Michaelia Cash, will foster better relations between Dealers and all Manufacturers.”

On behalf of the retail automotive industry, Mr Voortman commended both sides of Parliament for coming together to launch the Inquiry.

“It is so important that we have managed to reach a bi-partisan report and we would like to extend a special thanks the Committee Chair Senator Louise Pratt, as well as the work done by Senator Deborah O’Neill and Senator James McGrath,” he said.

“We would also like to thank the Morrison Government for listening to Dealers and their concerns and announcing landmark reforms. It is also important to thank all of the Dealers who participated in this process. Speaking out is never easy due to the potential for retribution. A number of Dealers appeared publicly, delivering powerful and heart felt accounts. Dozens more lodged confidential submissions.”

The full report is available for download from the Senate Inquiry’s website.

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