Tuesday, 13 December 2016 14:57

After significant consultation with the automotive industry the Motor Trades Association of Australia (MTAA) provided this submission to the ACCC's New Car Retailing Industry Market Study Issues Paper.  The MTAA submission was wide ranging and covered a number of key issues including:

  • Franchising Code of Conduct and the imbalanced relationship between manufacturers and dealers.
  • The consumer purchase process and the practice of the Australian Consumer Laws (ACL).
  • Recommendations for improvement and clarification of the ACL.
  • Interpretations and application of consumer guarantees and warranties.
  • Post sale service arrangements.
  • Access to repair information and data for new cars.

Please note you MUST be a member and log into read the following submission.

  pdf CLICK HERE (1.92 MB) to read the full MTAA Submission

Submission Executive Summary

  • New car retailing is often unfortunately portrayed as the pariah industry of the automotive sector. While any genuine consumer concern or problem is of paramount importance, focus on new car retailing is almost always unbalanced, adding fuel to the negative reputation fire.
  • Rarely is the contribution of more than 1500 new car dealers operating from more than 2600 facilities nationwide; or the 66,000+ Australians employed by industry; or its economic contribution of 1% of nominal GDP; or the important community roles played by dealerships in cities and towns across the nation; given equal recognition.
  • The purchase of a motor vehicle is still the second largest individual transaction a consumer will likely make after a home, even though they may now do this more frequently than 20 years ago. It is easily the most recognised industry in a highly fragmented automotive sector. It has presence (large prominent retail premises, hundreds of thousands of online sites, blogs, and references); it delivers highly complex products critical to the daily lives of most Australians; and is one of the few products where there is often a direct human emotional attachment.
  • New car retailing also seemingly gets disproportionate attention from consumers, consumer representative groups, legislators, regulators, manufacturers / distributors, other sector industries, and other parts of the supply chain. In 2016 alone, new car retailing: Has been subjected to further examination by separate Federal Government authorities looking into finance and insurance provision, vehicle standards, taxation and competition; and o Faces ongoing uncertainty created by the Commonwealth Government’s consideration of a potential deliberate intervention in the new car retailing market with ill-conceived policy (personal imports) and lack of attention to other out of date and illogical policies including the Luxury Car Tax.
  • New car retailing does not deserve the negative reputation, perception or the imputation it endures. More often than not the new car retailing industry and its dealer participants are the ‘scapegoats’ or the ‘meat in the sandwich’ for problems and issues created by other sector industries and supply chain participants who obfuscate their own obligations and relationships to, and with, consumers.
  • These observations must not be misinterpreted. Like any industry, new car retailing will have businesses and individuals within those businesses whose behaviours, processes or actions may be found to be in breach of consumer laws, or not meet consumer expectations, requirements or protections, and as such they should, and must, be held accountable.
  • Nor is the MTAA and members suggesting that there is not room for improvement; room for proactive solutions to emerging matters; room for greater collaboration with other supply chain participants; room for improved relationships; and most importantly room to reduce the incidence of consumer complaint or concern, raise levels of consumer comfort and satisfaction and improve the core reputation of the automotive sector and industries within it such as new car retailing.
  • MTAA and Members genuinely welcome the ACCC’s interest in the new car retailing industry and the wider automotive sector in undertaking this market study. It comes at a time of unprecedented change and considerable pressure.
  • MTAA and Members firmly believe that for the study to be valuable the team must approach its task with an open mind and it must dig deeply into this highly complex industry. The ACCC Market Study Team needs to explore and properly understand highly complex relationships, and largely unseen or unknown interdependencies and interrelationships which are not readily apparent to external parties or consumers.
  • The intricacies of the dealer and manufacturer / distributor relationship and their agreements should also be closely examined as imbalances in these relationships could and do impact consumers, but not necessarily at the fault of dealers.
  • The Market Study Team should pay particular attention to notified imperfections of current legislation and regulation and not be swayed by populist and potentially ‘easy’ solutions such as ‘lemon laws’ which ultimately are, in the opinion of MTAA and Members a ’legislative sledgehammer’ and a disproportionate response when the entire market is considered. These imperfections should be addressed - not just from a consumer perspective, but for business participants in the market so that more balanced outcomes are achieved
  • MTAA members are in a unique position. They represent the interests of all retail, service, repair recycling and associated industries in the automotive sector, including new car dealers, used car dealers, independent mechanical and motor body repairers, recyclers and other discrete automotive professions and services. Membership and structures allow the State and Territory representative organisations to have a thorough understanding of the critical issues and problems facing these industries most of which are undergoing unprecedented change and structural adjustment. It also provides opportunities for identifying commonality, potential for compromise, and to identify, facilitate and coordinate solutions, where possible
  • MTAA has addressed critical issues as far as practicable, and as far as shy and sometimes fearful business members will allow, but suggests the ACCC market study team, allocate enough time to independently access industry business members to support their investigations and analysis.

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