THE popping of corks had barely begun in the wake of the announcement that Labor has moved to get tough on unfair practices in franchiseland (including auto dealers) when the question reared its head: does this depend on the result of the election?

If Labor wins, the tougher new protections for retailers will go through, but what’s the position of the Coalition?

James Voortman, CEO of the Australian Automotive Dealer Association (AADA), which joined with the motor trades associations throughout Australia in the drive to get a fairer deal for car retailers, told GoAutoNews Premium that retailers will be calling for a bipartisan approach from the Coalition and that there is a strong expectation that a Dutton government will waive the new rules through. 

“Generally speaking, with most of the franchising changes that have occurred over the past few years, most of those proposals have been supported by both sides of parliament,” he said. 

“We’ve had dealers visiting Coalition-held electorates to discuss these issues with their local members. This has definitely been underway for a while.

James Voortman

Mr Voortman said that “there is work to be done, and we are doing that work in which we will be seeking to make sure that the election result does not mean this new protection for Australian business does not get up”.

“The reality is, we live in a very competitive automotive industry at the moment, and there are international forces at play that are affecting all of us (dealers and OEMs). 

“So I just don’t think you can sustain the argument that some of the key participants in our industry should be allowed to engage in unfair contractual terms or unjust and unfair trading practices any more. That is a very difficult argument to sustain,” he said.

“It would be a hard argument to make to say that you don’t want the government to create a fair balance between car dealers and the OEMs.”

Hon Peter Dutton MP – Leader of the Opposition

“This is a recognition by the government of the day that a power imbalance exists between OEMs and dealers; that the unconscionable conduct hurdle is too high. We have shown the government how many OEMs regularly treat dealers unfairly in their day-to-day operations and so the government is lowering that hurdle to stop that type of behavior. 

“The positive outcome is dealers will have the confidence to invest and to take on a new dealership, for example, to take that risk, to take on a new brand where they’re not going to be worried about a new brand just entering and then suddenly leaving the Australian market leaving dealership closures behind them.

“It actually provides certainty for these businesses to go in and spend many millions of dollars to build a new showroom for a brand that has only been in the country for a year, for example.

“It’s not just giving dealers peace of mind. It’s also preventing them from being forced to accept something less than they deserve in a settlement. So it’s not just avoiding years in court, it is giving dealers more leverage in a discussion where a franchise is pulling out of the market to be provided with a more relevant settlement.” 

Mr Voortman said that OEMs would need to think twice when there is recourse for the dealer to prove that an action is unfair, and compensate the dealer, 

“On a day-to-day level it gives confidence for the dealer to push back and say: ‘No, I cannot afford that extra stock’. It will reshape that behavior, that relationship.” he said.

By John Mellor