AUSTRALIA’s new mandatory merger control regime has arrived at a time when the automotive retail market is changing faster than many traditional competition frameworks can comfortably accommodate.

The policy intent behind the reforms is clear. Competitive markets matter – they support consumer choice, innovation, and economic confidence.

The key issue for automotive retail, however, is whether merger assessments are being conducted on the basis of how consumers bought cars in the past, or how they buy them today.

Historically, dealership competition was viewed largely through a local geographic lens.Consumers visited nearby showrooms, compared a limited number of options, and often relied heavily on information provided by individual dealers.

That market has fundamentally changed.

Today’s buyers can compare prices online, obtain quotes from multiple dealers, search inventory nationally, purchase interstate, and arrange delivery without ever visiting a traditional showroom.

Generative AI is accelerating this shift further, helping consumers compare specifications, pricing, reviews, reliability, servicing options, and ownership costs before they even contact a dealer.

This has important implications for the Australian Competition and Consumer Commission’s (ACCC) assessment of automotive transactions.

A dealer’s closest competitor may no longer be located in the same suburb. It may be in another city, another state, or even represent a different brand altogether.

The proposed acquisition of Wakeling Automotive by Peter Warren Automotive Holdings is an early example of the practical issues emerging under the new regime. The transaction progressed to a Phase 2 review before subsequently being withdrawn.

The process extended timelines and created uncertainty for buyers, sellers, employees, manufacturers, and investors.

More broadly, it highlights the need for regulators to carefully consider how automotive markets are defined, how online competition is assessed, and how consumer benefits arising from scale are recognised.

Scale is often treated cautiously in competition analysis, but in automotive retail it can deliver tangible consumer benefits.

Larger dealer groups are often better placed to invest in digital platforms, electric vehicle capability, service infrastructure, technician training, cybersecurity, inventory systems, and the customer experience.

These investments can support sharper pricing, better stock availability, faster response times, and stronger aftersales support.

Steve Bragg

Australia is arguably the most competitive automotive market in the world, with more than 80 brands competing for annual sales of around 1.2 million new vehicles.

This level of brand competition places significant pressure on dealers regardless of ownership structure.

Consumers are not simply choosing between dealerships. They are choosing between brands, products, price points, finance offers, service experiences, and ownership models.

Comparable jurisdictions, including the United States, Canada, the United Kingdom, and New Zealand, increasingly recognise that merger analysis must reflect actual consumer behaviour, digital search activity, switching patterns, and broader competitive constraints.

Australia has an opportunity to do the same without weakening competition policy.

The central objective should remain protecting Australian consumers. The challenge is ensuring the framework used to protect them reflects the market in which they now participate – transparent, digital, brand-rich, price-sensitive, and increasingly national.

Stephen Bragg is the lead partner in the Motor Industry Services division of Pitcher Partners.