MITSUBISHI Motors Australia Limited (MMAL) has been slapped with at least 150 submissions that object – some in very terse terms – to its proposed 10-year/unlimited kilometre warranty for its new cars based on the requirement that the vehicles must be serviced at a Mitsubishi authorised centre or the warranty reverts to five years.

The submissions have been lodged with the Australian Competition and Consumer Commission (ACCC) after the watchdog called for public opinion.

The submission period is now closed and the latest news is that the ACCC reports that the issue is “under consideration”. MMAL told GoAutoNews Premium that it has had no response from the ACCC as yet.

Core to the objections is Mitsubishi’s plan to tie the long warranty – now Australia’s longest for a new passenger car range – with exclusive servicing from an MMAL dealership.

In one response, the Australian Automotive Aftermarket Association (AAAA) said “large scale responses to Exclusive Dealing Notifications are rare” and it is aware that the ACCC has received opposition from automotive parts suppliers, industry associations and small independent repairers.

AAAA chief executive officer Stuart Charity said Mitsubishi’s 10-year conditional warranty “essentially encourages consumers to trade away their statutory rights to avoid any potential future issues.”

“It is a blatant attempt to reinforce the myth promulgated by car companies that the only protection a consumer has on their vehicle is under the manufacturer’s warranty,” he said.

“Mitsubishi’s application constitutes a deliberate attempt to exclude Australian-owned businesses from supplying safe and legitimate products and services to consumers and should be revoked.”

Mr Charity said there was also real concern that by approving this application the ACCC will set a precedent that other car companies will follow, and likely result in 10-year conditional warranties being offered by many of the car companies operating in Australia.

“Given the average age of registered vehicles in Australia is just over 10 years, the widespread adoption of these conditional warranties would have a detrimental impact on the 30,000 predominately family-owned mechanical repair businesses in Australia as well as the globally recognised $5 billion Australian automotive parts manufacturing sector,” he said.

“This will result in reduced competition and choice and drive up the cost of vehicle ownership for all Australians.”

Australia’s largest automotive aftermarket parts supplier GPC Asia Pacific, which operates businesses including Repco and NAPA through 517 stores, said it supports vehicle owners’ choice of a repairer.

GPC said in its submission that through its 495 independent repairers under the Repco Authorised Service network, that “choice is critical to ensuring a vibrant competitive industry of automotive service and repair workshops, tens of thousands of whom are independent small businesses, as well as a competitive market for the supply of service and replacement parts. The proposed 10-year warranty will substantially lessen competition.”

A submission from Facebook campaigner Lemon Laws 4 Australia that said MMAL should be applauded for the 10-year/200,000km warranty which indicates Mitsubishi has “reached the reasonable reliability and durability expectations many consumers have for when they have purchased a brand-new car costing tens of thousands of dollars.”

However, the group said that by making the warranty conditional, it “will restrict consumer freedoms to choose with whom, in what or where they deal if wanting to benefit from a 10-year/200,000 kilometre warranty”.

It said some Mitsubishi owners may not want to service their vehicle through a Mitsubishi dealer because of price “or for other reasons eg: a poor service experience with an approved MMAL centre” while others live in remote areas where a Mitsubishi repair centre is not accessible which would make the warranty void without any fault by the owner.

It wrote to the ACCC saying that if the intent of the proposed warranty was that MMAL wanted to be more competitive “then it may be limiting potential new-vehicle and spare part sales by placing this condition on their proposed warranty.”

“If Mitsubishi removed this condition, then not only would they be more competitive in those remote regions where they are up against manufacturers with seven-year/unlimited kilometre warranties but they would also have more opportunities to expand sales of their genuine parts to independent service centres in those regions.”

Kia Motors Australia (KMAu), which has previously said it would consider lifting its current seven-year warranty to 10 to maintain the industry’s (then) top cover, would not comment directly about the Mitsubishi warranty.

KMAu chief operating officer Damien Meredith told GoAutoNews Premium: “If a 10-year warranty is an improvement on current warranties then I think they would be tremendous for the consumer.

“If there are checks and balances that dilute the warranty and make it more difficult, then I see no value at all,” he said.

“Kia Motors Australia is in continued dialogue with (parent company) KMC regarding our warranty coverage and we collectively believe Kia’s seven-year warranty and its ancillary aspects are still leaders in coverage.”

MMAL lodged its application with the ACCC on September 11 seeking approval of the 10-year warranty with the deadline for submissions commenting on the application to be lodged by October 9.

ACCC chairman Rod Sims said in a statement that his organisation had seen examples of practices by some car manufacturers “that raise concerns”.

“We found that there is a dominant ‘culture of repair’ underpinning systems and policies across the industry based mainly around the manufacturer’s warranties, when enhanced remedies may be available under Australian Consumer Law,” he said.

The ACCC is expected to make a decision on the application this month to either revoke the notification or allow it to stand.

By Neil Dowling