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FCA_LowerVOLKSWAGEN’S emission scandal and Fiat Chrysler Automobiles (FCA) Australia’s warranty claims for Jeep are two issues that have triggered a new-car retail industry market study by the Australian Competition and Consumer Commission (ACCC).

The study, announced today and with a draft report expected in early 2017, will focus on competition and consumer issues that the ACCC said is now a priority area for the commission.

 


The ACCC said the market study will be supported by enforcement, education and research projects focusing on four key areas:

  • Compliance with consumer guarantees obligations and the ability of consumers to enforce their rights
  • False, misleading and deceptive practices in performance, fuel efficiency, fuel consumption and emissions
  • The effect on competition and consumers of post-sale care arrangements (such as servicing)
  • Whether consumers and businesses could be affected by any restrictions on vehicle access to data

Rod_sims_portraitACCC chairman Rod Sims said: “The ACCC and other Australian consumer law agencies continue to receive a high volume of complaints from consumers about defects with vehicles, covering a broad spectrum of manufacturers”.

“These complaints reveal that many consumers are having difficulty enforcing their consumer guarantee rights, which are in addition to the warranties provided by manufacturers.

“Following the Fiat Chrysler Australia (Jeep) investigation, the ACCC is considering concerns about compliance with the consumer guarantee provisions in the motor vehicle industry more generally, and is looking at complaints and practices of specific brands.”

The ACCC said it already has investigations into the car retailing industry underway, including into the Volkswagen emissions issues.

The acting CEO of the Australian Automotive Dealers Association (AADA), David Blackhall, said he was “ready, willing and looked forward to working with the ACCC on the study” but cautioned that there was a need to accurately determine the reality of many consumer complaints.

“That will be one of the roles of the study – to ascertain if there really are a ‘very high’ level of complaints as reported by (ACCC chairman) Rod Sims,” he said.

“There is a need to find out how much reality is injected into the fact. Too often government gives credence to economists and academics who get more freedom of opinion than the actual people working in the business.”

David_Blackhall_portraitMr Blackhall said he was also concerned about the multiplicity of government agencies and their overlapping inquiries into the car industry and “the resulting drain on industry resources answering these inquiries”.

In April at the Australian Auto Aftermarket Conference in Melbourne, the ACCC commissioner Roger Featherston said there had been “widespread consumer dissatisfaction about poor handling of complaints” involving Jeep.

He said this included one consumer “who even engaged in a Kickstarter campaign called ‘Destroy my Jeep’ which culminated in him hiring excavators to publicly destroy his vehicle.”

“It is important to note that under the Australian Consumer law, a consumer’s rights are not limited by a manufacturer’s warranty,” Mr Featherston said at the conference.

The ACCC said that it had since accepted an undertaking from FCA Australia (Jeep) to “review its handling of warranty claims and to compensate consumers whose claims had been wrongfully refused”.

The study will also review industry practices in the sector to assist in identifying risks to consumers and the competitive process.

The ACCC said it will seek information from the public to inform its study as well as through collecting data through surveys. Later this year it will provide detailed information on the scope of the study and invite written submissions from the public.

By Neil Dowling

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