Senator O’Neill said that since giving evidence to the committee in November 2020, events had transpired that indicated seven claims made by Mercedes-Benz senior management to the Senate Education and Employment references committee were incorrect.

She said that she particularly wanted to raise the issues regarding the agency model that have arisen since those initial hearings on the car dealership industry in Australia and the seven key assertions were made by the senior executives of Mercedes-Benz in statements to the committee. 

She told the Senate: “Mercedes-Benz (management) asserted that:

1. The dealers were happy with the proposed changes to the agency model
2. That they had consulted widely with the dealers regarding the changes
3. That the agency model would be a win for dealers
4. That the reason Mercedes-Benz was shifting to the agency model was driven by consumer benefits
5. That dealer profits would not be impacted
6. That Mercedes-Benz was committed to the dealers for the long term
7. That Mercedes-Benz would not profit from the shift to an agency model”. 

Deborah O’Neill

Senator O’Neill told the Senate: “I assert under the weight of current evidence that Mercedes-Benz appears to have misled the Senate Committee. The dealers detailed Statement of Claim from the Mercedes-Benz dealers in their current court action, instead (is) pouring water on those seven claims. 

“The dealers were not happy with the proposed changes and in multiple meetings, multiple meetings, they voted overwhelmingly not to proceed with the agency model. 

“Mercedes-Benz did not consult widely with dealers. In fact, when dealers tried to negotiate some of the terms of the model Mercedes-Benz issued a dispute notice under the franchising code. 

“The agency model is not a win for dealers. If instituted, (it was predicted) the agency model will cut the profitability of some dealerships by over 50 per cent. And the experience, now that the model has been introduced, has sadly lived up to those dire predictions. 

“The agency model is not about consumer benefits; it merely is about ensuring greater profits in Stuttgart instead of main streets and suburban and regional Australia. 

“Dealer profits will be impacted. Deloitte analysis said that the profitability under the new model declined by more than 50 per cent. 

“Mercedes-Benz wasn’t committed to dealers long term. Dealers were issued non-renewal notices as a means of terminating their agreements. 

“And Mercedes-Benz will profit from the shift to the agency model. It will take profits out of dealerships and straight into the pockets of Mercedes-Benz. 

“This is an extremely serious matter and begs the question if the Mercedes-Benz are willing to perpetuate untruth to the members of the Australian Senate, who else are they willing to lie to? 

“These untruths must be called out in the public interest; in the interests of Australian businesses and Australian dealer networks. 

“The Australian Senate must not be treated with contempt by large multinationals who are only concerned with extracting profit and shipping it offshore,” Senator O’Neill said. 

“I will be watching developments and, given the seriousness of my concerns, I intend to take this matter to the Senate Education and Employment references committee to request that it be raised with the President of the Senate as a matter of privilege.” 

In her opening remarks, Senator O’Neill said that she rose “to speak about an issue of great concern to the hard working car dealers of Mercedes-Benz and the car dealer network in Australia more broadly”. 

“The imposition of the agency model by Honda and now Mercedes-Benz onto Australian dealers is a disaster for these local businesses who provide local jobs, apprenticeships and community sponsorship. And, of course, they pay their taxes. 

“I’m in this place to stand up for fairness; fairness in workplaces, fairness in our society, and fairness in business,” she said.

A Mercedes-Benz Cars Australia spokesperson told GoAutoNews Premium: “Mercedes-Benz Cars Australia has long flagged a move towards modernising the purchasing experience for our customers.

“Notwithstanding the fact that all of our dealers have signed on to the new agency model after a lengthy and inclusive process, unfortunately some of our network have elected to commence legal proceedings.

“It would be inappropriate to make any comment until such time as the legal proceedings have been concluded. We ask that the court process be respected at this time.”

Footnote: Before each witness commences their testimony to a Senate committee they are warned against making false or misleading statements. Where Senators believe false or misleading testimony was given they seek remedy by reporting their allegations to the  President of the Senate for determination.  

The Parliamentary Privileges Act 1987 provides that a House of Parliament may impose terms of imprisonment or substantial fines for individuals and corporations as a penalty for contempt. 

To date the Senate has not had occasion to use either of these penalties, preferring an educative and preventative approach. The Senate has accepted apologies and remedial action, and has encouraged government officials in particular to attend training courses on the rights and obligations of witnesses before parliamentary committees.

It is a matter of public record that the evidence to the committee referred to by Senator O’Neill was given by Horst von Sanden, who was at the time managing director and CEO at Mercedes-Benz Australia/Pacific and is now an independent consultant and consults to Deloitte motor industry services and Jason Nomikos, director, customer management, retail network development and strategy at Mercedes-Benz Australia.

By John Mellor