The Australian Automotive Dealer Association (AADA) says Consumer Affairs Ministers’ commitment to strengthen supplier indemnification under the Australian Consumer Law is a positive step for dealers facing a wave of new and emerging vehicle brands entering the market.
The announcement also confirms work has begun on introducing an Unfair Trading Practices regime to the franchising sector.
AADA chief executive James Voortman says the measures represent a necessary early move as Government policies such as the NVES and the fringe benefit tax exemption for electric vehicles accelerate the number of manufacturers entering Australia.
“The AADA is seeing an unprecedented number of new brands entering or signaling their intention to come to Australia. This will bring positive consumer outcomes in terms of competitive pricing, but it is important that adequate protections are also in place,” Voortman says.
He says strengthening indemnification laws will provide greater certainty for dealers supporting both established and new entrants.
“The changes to the law will make it harder for international car brands to escape their indemnification obligations under the ACL and result in better outcomes for dealers and consumers. The ACCC and other inquiries have found that new car dealers often struggle to enforce their statutory rights to be indemnified when honouring their ACL obligations with existing brands let alone new untested brands.”
While the AADA welcomes the commitment, Voortman says further work is needed to ensure Australia’s consumer law settings are robust enough to handle increasing brand variety and new technologies.
The association also supports the Government’s progress on its election commitment to introduce an Unfair Trading Practices regime to the Franchising Code of Conduct. A recent Federal Court ruling found amendments to the Code were needed to better protect dealer investments.
Automobile Magazine-AU
