Tony Weber

FEDERAL Chamber of Automotive Industries (FCAI) chief executive Tony Weber has warned that adoption of an industry-specific franchising code risks forfeiting the flexibility and innovation that will be needed to evolve with the fast-changing technological and market landscape through over-regulation.

Mr Weber’s comments were in response to this week’s announcement by shadow assistant treasurer Andrew Leigh that Labor would implement such a code if it won the next federal election.

“I don’t know what the automotive world is going to look like in 15, 20, 30 years’ time, but what I do know is it will look different to what it looks like today,” Mr Weber told GoAutoNews Premium following the events at this week’s Australian Automotive Dealer Association (AADA) National Dealer Convention on the Gold Coast.

“Both the OEMs and dealers need to have flexibility of arrangements so that they can be innovative and bring the right products and the right services to meet the consumers of tomorrow.

“Ultimately, if you over-regulate an industry, what happens is the consumers pay more for the same product.”

Mr Weber also disagreed with statements by Dr Leigh and AADA CEO David Blackhall that the existing Franchising Code was insufficient for businesses the size and scale of automotive dealers.

“I think the Franchising Code provides a framework for businesses to work together and works right across all sorts of businesses, whether it be bread-makers or ice-cream shop franchises,” he said.

“The basic elements of franchising remain the same, it then becomes a question of how prescriptive we become. We need to work together with the AADA and the dealers more broadly to come to the best conclusion about where we sit with this because being too prescriptive is extremely dangerous.”

However, Mr Weber was heartened by the fact Dr Leigh mentioned that many dealers did work in mutually beneficial partnerships with manufacturers.

He said his preferred outcome would be for both sides of the industry to work together and “think about it deeply so that we come up with the best framework to go forward”.

“I was concerned at the AADA convention that people who spoke haven’t necessarily gone through and plotted it out that way, with that kind of forethought about what needs to happen.

“I think the best way to handle this is to sit down as two parties and work through it, recognising the best pathway forward is one where there is mutual benefit. That is the best way to do these things because success comes when we work together. Success is not mutually exclusive.”

By Haitham Razagui