Franchised new car retailers will soon be able to apply for an exemption to collectively bargain with their respective franchisor brands.
The Australian Automotive Dealer Association has applauded the Australian Competition and Consumer Commission’s proposal to create a class exemption that will allow dealers big or small to band together in negotiations with manufacturers.
Businesses with less than $10 million turnover in its previous financial year will be able to collaborate in a way that will exempt them from being in breach of competition law in certain situations.
Competing dealers under the same franchise agreement with manufacturer brands will be able to jointly negotiate for improved terms and conditions, policies and strategic decisions over similar issues.
The proposal will be legislated after its draft development process which goes out for public consultation in the first quarter of 2019.
AADA chief executive David Blackhall says dealers will finally be able to have their say.
“I congratulate the ACCC for this decision which takes account of the significant power imbalance between franchisor and franchisee, particularly in the new car retail industry,” he explains.
“This most welcome proposal could result in our members being in a position to work with their franchisors in a more cooperative and integrated fashion,” Blackhall says.
The ACCC says business are already able to apply for case-by-case legal protections to collectively bargain, albeit with authorisation from the ACCC itself, but with the class exemption in place, eligible businesses will automatically be granted “easier access”.
“Businesses can sometimes be better off negotiating with their customers or suppliers as a group,” ACCC deputy chair Mick Keogh said in August.
“Working together, they may be able to negotiate more efficiently with larger businesses to achieve better terms and conditions than they can on their own,” he adds.
Join the conversation