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Senate Committee resolves to investigate the relationship between car manufacturers and car dealers

On 7 October 2020, the Senate Education and Employment References Committee (“the Committee“) resolved to investigate the regulation of the relationships between car manufacturers and car dealerships in Australia.

Accordingly to the Committee’s press release, this investigation will include the following

  1. Practices employed by manufacturers in their commercial relations with dealers, with specific focus on:
    1. Investment required and tenure provided
    2. Termination and compensation practices
    3. Performance requirements
    4. Behaviour around warranty claims and Australian Consumer Law
    5. Unfair terms in contracts
    6. Goodwill and data ownership;
  2. Existing legislative, regulatory and self-regulatory arrangements;
  3. Current and proposed Government policy;
  4. Dispute resolution systems and penalties for breaches of the Franchising Code of Conduct;
  5. Current and proposed business models in selling vehicles;
  6. Legislative, regulatory and self-regulatory arrangements found in international markets; and
  7. The imposition of restraints of trade on car dealers from car manufacturers.

The investigation arises from the Committee’s inquiry into the announcement by General Motors on 17 February 2020 that it will withdraw the Holden brand and operations from Australia.

The deadline for the report from the Committee is 10 December 2020.

Long Saad Woodbridge’s expert automotive team has been advising automotive manufacturers for over 20 years. We will continue to monitor the developments and update our clients accordingly.

For further assistance in this regard please contact Eric Louca elouca@lswlawyers.com.au

Important Disclaimer: The content of this publication is general in nature and for reference purposes only. It is current at the date of publication. It does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.



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