The Federal Chamber of Automotive Industries says the false reporting of unsold vehicles issue is a practice dealers shouldn’t be undertaking.
FCAI chief executive Tony Weber tells AutoTalk dealers should be able to run their businesses of their own accord.
“If a dealer is pre-reporting cars, why are they doing that? They shouldn’t be,” Weber says.
Asked if the franchise agreements between manufacturers force or incentivise dealers to pre-report vehicles as sold in conflict with competition laws, Weber says it should not be the case.
“Dealers run independent businesses, they elect to do what they do. It’s their business, they control the way they handle the business,” he explains.
“There are extensive competition laws out there which protect the relationship between OEMs and dealers. If anything’s in contravention of those laws, then those laws should be utilised.”
After Australian Automotive Dealer Association (AADA) chief executive David Blackhall revealed last week the issue has been raised with the Australian Competition and Consumer Commission (ACCC), Weber says the two parties “have spoken”.
Weber does concede that the practice could lead to more serious undertakings.
“I’m no lawyer and I haven’t sought legal advice, but it seems that would be in contravention with the legal framework of this country.
“I’m not aware that it’s happening and the extent it may be happening, and I’m not sure if it is happening, why it’s happening.”
The FCAI has only heard about the problem of over-inflating sales figures to increase volumes moved by manufacturers via third-party evidence, Weber says.
“The only thing I hear about pre-reported or ‘cyber’ cars is through media or individuals,” Weber says,
“We always try to keep a view on the market, and it hasn’t been raised by any of our members to me.”
“I’ve got no view of that activity, I’m not part of the commercial arrangement; if it is happening or not, I do not know,” he adds.
“This is not a new issue, from time to time we hear evidence of it, so there’s nothing new in the claims out in the public at the moment,” he adds.
A recent survey by the Victorian Automobile Chamber of Commerce outlines 100 dealer members explicitly outlaying the extent of the practice.
Asked about the VACC’s survey and whether it has merit, Weber says he finds the weight of evidence hard to fathom.
“We sell 1.2 million cars a year, if there’s 30-40% reported sold that aren’t, that’s 400,000 cars. That’s an extraordinary number, I’d like to know where they’re parked,” he says.
Told that AutoTalk has been contacted by one dealer highlighting the issue as a “vicious cycle” where warranties are reduced by one manufacturer by pre-reporting, Weber says, “the consumer should have complete transparency on what the warranty on the vehicle is.”
The AADA reported the practice as early as December 2016, saying “everyone knows about it but no-one talks about it”.
“That means up to 200,000 new cars or more per year in Australia reported as sold are actually not,” the association said in a statement.
Weber maintains the responsibility of reporting sales is on dealers.
“We’re cognoscente that there’s post-reporting as well as pre-reporting, that a car may be sold in one month and reported as sold in a subsequent month. The reporting comes from the dealers.”
Have you experienced pressure from an OEM to pre-report vehicles? Email scott.murray@autotalk.com.au with your story.
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