The Federal Government has committed to extending protections against unfair trading practices and unfair contract terms to all franchisees, including Australian new car and truck Dealers.
It has also committed to prioritising work to ensure compliance with the New Vehicle Efficiency Standard at the point of sale, rather than the point of import.
The Australian Automotive Dealer Association (AADA) has welcomed the announcement. It has played a longstanding role in advocating for these additional protections for its members.
AADA says reforms will go some way towards addressing the power imbalance that exists between new vehicle dealers and the global manufacturers to which they are franchised.
It says the automotive industry is undergoing a period of great change, driven by a worldwide transition towards new technologies and business models. As this shift unfolds, there will be winners and losers – but these new protections will level the playing field for Dealers and allow them to make informed business decisions with greater security.
“These changes are a major step forward for Australian Dealers who are navigating the most significant transformation in automotive history,” AADA chief executive James Voortman says.
“The exit of Holden from the Australian market, along with the ongoing court cases between Dealers and Honda and Mercedes-Benz, have underscored the urgent need for stronger protections. Dealers deserve fair treatment, reasonable contractual terms, and the ability to make business decisions with confidence. These reforms deliver on that need.
With the global automotive industry shifting rapidly due to electrification and the emergence of many new manufacturers to our shores, these strengthened protections come at a critical time. By establishing a fairer and more balanced framework for franchise relationships, the reforms will bolster investment in the market, secure jobs, and provide a level playing field for Australian businesses.
“The transition we are witnessing presents both challenges and opportunities,” Voortman says. “Ensuring fairness in contracts and trading conditions is essential to allowing Australian Dealers to compete and thrive in a changing world.”
“The AADA also welcomes the additional funding provided to the ACCC to enforce the Code and looks forward to working with the regulator to ensure franchisees are protected through a tough cop on the beat,” he says.
The AADA commends the government for its leadership on this issue and remains committed to working alongside policymakers to ensure a strong and competitive franchising environment for all Australian businesses.
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