Dealers versus FCAI

Fresh franchising reforms affecting car dealerships have divided the industry.

BATTLE LINES

The Federal Government has released a new discussion paper outlining its plans to introduce a standalone code of conduct and mandatory binding arbitration.

While the proposed changes are welcomed by the Australian Automotive Dealer Association (AADA), the Federal Chamber for Automotive Industries (FCAI) says the reforms don’t focus enough on consumers.

James Voortman, AADA CEO says, “The release of this discussion paper marks another significant step in reforming the imbalances which exist between dealers and some manufacturers.

“We believe this provides an opportunity for our industry to come together and build on the progress that has been made towards a fair and reasonable set of rules which govern relations.”

The new franchising reforms follow other revisions to the regulations, which came into effect earlier this year, aimed at protecting dealers with their investments if a manufacturer decides to leave the local market.

The FCAI, however, says the latest proposals “forget the consumer” and risk over-regulating the market.

“The ink is not yet dry on far-reaching industry regulations introduced [in July]. Their impact needs to be seen before more regulations are contemplated,” says FCAI Chief Executive Tony Weber.

“Over-regulation will not protect the industry, but what will is a choice of sales models, better service and competitive pricing.”

Changes were first floated when General Motors pulled Holden from the Australian market in February 2020, leaving dealers with next to no support.