The Shadow Assistant Treasurer, Dr Andrew Leigh MP, today announced at the AADA National Dealer Convention in the Gold Coast that, if voted into office at the next Federal election, a Labor Government will implement an industry-specific Code for the new retail franchised automotive industry.
Dr Leigh said that the new ‘Dealer Code’ will ‘drive a better deal for auto dealers by levelling the playing field between the overseas multinationals that manufacture cars and the small businesses that operate car dealerships.’
The Dealer Code will be implemented through regulations under the Competition and Consumer Act and will deliver clear rules for manufacturers and dealerships.
Dr Leigh said that the current power imbalance between manufacturers and dealers means manufacturers can impose contract terms and set dealership expectations which are to the manufacturers’ own advantage, making it difficult for dealers to properly look after their customers. The pressure this creates on dealers impacts on small business and can affect how cars are serviced and repaired, and how warranty claims are handled. The independent code will create a set of rules that both the manufacturers and dealers must observe when establishing expectations around dealer conduct.
This announcement comes after AADA advocated for a dealer-specific code to help address the power imbalance between dealers and manufacturers, and to address behaviours within the franchised new car retail industry which were not effectively prevented by the existing Franchising Code of Conduct.
Dr Leigh also said that, if elected, the new Dealer Code would be drafted in consultation with AADA and other industry stakeholders.
This article was written by Evan Stents, Partner and Christian Teese, Senior Associate.
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