AUSTRALIA’S consumer law framework must be fit for purpose for the automotive industry, especially needing work to improve supplier indemnification as the new-car industry attracts a record number of brands.

The nation’s peak dealer body this week said strong consumer and dealer protections needed to be in place.

The Australian Automotive Dealer Association (AADA) said it welcomed the commitment by consumer affairs ministers to improve supplier indemnification under the Australian consumer law (ACL).

It also welcomed the announcement that work has started to introduce an unfair trading practices regime to franchising.

Hon Dr Andrew Leigh MP

“This announcement is testament to the effective work of minister Andrew Leigh and represents a crucial first step in giving confidence to new car dealers to provide new and emerging car brands and technologies to consumers,” the AADA said.

“With Government policies such as NVES and the FBT exemption for EVs incentivising a record number of new-car manufacturers to enter the Australian market, it is imperative to have in place strong consumer and dealer protections.  

“While this is a very important first step, the AADA believes a lot more work needs to be done to ensure that Australia’s consumer law framework is fit for purpose for the challenging times ahead when consumers are looking to purchase new and emerging brands.”

AADA CEO James Voortman said the AADA was seeing “an unprecedented number” of new brands entering or signalling their intention to come to Australia. 

“This will bring positive consumer outcomes in terms of competitive pricing, but it is important that adequate protections are also in place,” he said.

James Voortman

“The changes to the law will make it harder for international car brands to escape their indemnification obligations under the ACL and result in better outcomes for dealers and consumers. 

“The ACCC and other inquiries have found that new car dealers often struggle to enforce their statutory rights to be indemnified when honouring their ACL obligations with existing brands let alone new untested brands.”

The AADA said that while the move by the consumer affairs ministers was “a very important first step”, it believed a lot more work needs to be done to ensure that Australia’s consumer law framework is fit for purpose for the challenging times ahead when consumers are looking to purchase new and emerging brands.

“The AADA also commends the announcement that work has begun on their election commitment to introduce an unfair trading practices regime to the franchising code of conduct,” it said.

“Recently a federal court judge said that amendments must be made to the franchising code in order to protect dealer’s investments,” Mr Voortman said.