Car dealers call for code of conduct

Dealer Association says the industry needs specific code

car dealership

The Australian Automotive Dealer Association (AADA) says Australia’s new car sales yards need to be covered by an industry-specific code of conduct.

The calls come as the Australian Competition and Consumer Commission (ACCC) continues its probe into the new car retailing industry ahead of handing down a report in December.

Related: Car Dealership asks “How do we list our cars with you?”

AADA CEO David Blackhall tells us the study has highlighted the structural imbalance between manufacturers and dealers.

He says this imbalance, including issues like one-sided dealer agreements and other restrictions, aren’t good for car buyers.

“Under the current system dealers have no security of tenure; are increasingly being served with non-renewal notices; have ineffective capital expenditure protections; and are subject to unfair end of term arrangements.

“This has the effect of giving manufacturers significant commercial leverage to force dealers to obey instructions given to them (even if that is to the detriment of consumers).

“Non-renewal notices are issued despite dealers fulfilling their end of the bargain by exceeding performance targets and injecting significant capital investment into their facilities.”

And Mr Blackhall says that means that the industry needs a specific code of conduct.

“The Franchising Code of Conduct does not take account of dealers’ specific and unique circumstances and has not served dealers and consumers well.

“The automotive industry is very different to other franchised industries and an industry-specific code specifically designed for dealers will better protect consumers and dealers.”

Related: Car dealerships back penalties for credit fraud

We will bring you more details on the ACCC report as they come to hand.

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