THE Victorian Automotive Chamber of Commerce (VACC) has met with the Australian Competition and Consumer Commission (ACCC) alerting the regulator to impending supply chain issues affecting the sale and repair of Victorian motorists’ vehicles and possible ramifications under the Australian Consumer Law (ACL).

VACC discussed with ACCC that the international supply shortages may mean dealers and repairers are physically unable to meet the requirements of the ACL because cars and parts cannot be delivered within the timing requirements of the law.

VACC also put the case forward that some service customers are using the terms of the ACL to force dealers into supplying new loan cars where repairs are delayed by lack of parts and that the ACL was never intended to be used in such a manner.

The chamber is pointing out that its members are concerned that due to no fault of their own they could see themselves facing legal action because they are unable to meet repairs or supply timelines stipulated under the ACL.

It asked the ACCC to widely issue statements to the public alerting buyers and service and repair customers to the shortages issue and stating that the ACCC is aware that timing delays in supply and repairs are outside the control of the industry.

The issue applies to dealers and repairers around Australia.

The VACC’s Michael McKenna advised the ACCC that there was a potential, because of shortages and other disruptions due to backwash from the COVID-19 pandemic, for stakeholders in the supply and repair of vehicles to inadvertently find themselves in breach of the strict ACL rules.

Mr McKenna said: “As a direct impact of those supply chain issues, members of the Victorian automotive retail sales and repair sectors are concerned about possible consumer claims that will be brought forward for failure to repair, service or deliver a motor vehicle within a reasonable time.”

He said there was also “the ever-present issue of consumers using the ACL as a buyer’s remorse tool”.

He said the VACC’s members “have been trading under restrictive and uncertain conditions because of international supply chain issues and an uncertain Victorian business landscape that has been aggravated by recent state lockdowns”.

“The VACC seeks the support of the ACCC via messaging to alert consumers and other stakeholders on the impacts of these issues.”

Mr McKenna said that disruption to the Australian and international supply chains were “causing a degree of frustration for both retailers and consumers in an automotive sales and repair market that is currently best described as dynamic”.

He said that feedback from a whole-of-industry survey of VACC members shows that the bulk of the supply chain issues are a result of :

•     COVID-19 pandemic
•     Logistical issues for international shipping companies
•     Suppliers diverting stock away from Victoria (specifically) and also from Australia to other prime (international) markets
•     The slowdown or cessation of industry (manufacturing) in Europe, Asia and North America
•     Instances such as the Suez Canal blockage are also a contributing factor
•     An international supply crisis in the supply of microchips and semiconductor components

Mr McKenna said: “VACC members are very aware of their responsibilities under the Australian Consumer Law where the manufacturer must take reasonable action to ensure that facilities for repair of the goods and parts for goods are reasonably available for a reasonable period after goods are supplied.

“This guarantee applies to consumers who did not purchase the goods directly from the manufacturer.

“It is the view of VACC members that the current supply chain situation is well outside the scope of influence of manufacturers or suppliers because the industry is experiencing issues with all international logistics involved in the transshipment of vehicles and parts.

“It is not solely the global pandemic and associated disruption to international shipping and logistical arrangements that has put such pressure upon our supply chains.

“It is our members’ view that the current environment is also currently impacted by the fact that many internationally based car-makers are facing crippling supply issues with the shortage of semi-conductor components.

“Due to the current supply chain issues being experienced by the retail automotive market it is VACC’s view that there are sections of the ACL that are articulated within the consumer guarantees that, if followed by dealers, will become the prescribed defence for the industry to stave off consumer proceedings because of a failure to supply and repair a vehicle in a reasonable time.”

Analysis of VACC LMCT and aftermarket industry survey on supply chain issues

The catalyst for retailers being permitted to enact ACL s58 (2)(b) is validated by VACC research conducted in late February 2021 reveals that:

•     95.73 per cent of Victorian dealers are witnessing a disparity and disruption in supply of mainstream dealer stock supply in their new car, motorcycle, commercial vehicle, farm machinery and automotive parts retail sales markets. Those benchmark figures for those delays are on average more than 120 days. The pre-COVID benchmark was less than 14 days.
•     97 per cent of Victorian independent and franchise dealer service and repair businesses are experiencing delays of up to 90 days for the delivery of aftermarket or original equipment manufacturer (OEM) automotive parts. The pre-COVID delay was less than 3 days.
• Currently many dealers and repairers are providing consumers with a loan vehicle whilst they wait for the repair or supply of a vehicle where a vehicle is rendered as unsafe to drive. The provision of such a vehicle to all consumers affected by the supply chain issues is not sustainable, realistic nor efficient.

“VACC members have advised that opportunistic consumers are pressuring dealers by insisting on the supply of a brand-new replacement vehicle as the dealer cannot source a part to rectify an issue nor advise an accurate date for supply or rectification. This is not what the ACL should be utilized for, ACCC agrees with that sentiment.” Mr McKenna said.

What VACC seeks from the ACCC

Victorian industry seeks the support of the ACCC on this issue.

Industry cannot be anchored down by consumer claims citing ACL provisions that industry, including OEMs, have no opportunity to rectify. VACC requested

A clear message from ACCC to community, consumer groups and state based Offices of Fair Trading in regard to this will provide solace to industry and a very clear direction for  the benefit of consumers.

By John Mellor