Auto principles to guide car dealers and manufacturers

The Australian Government has today launched a set of auto principles to guide agreements between car dealers and manufacturers.

The six auto principles are designed to help steer contract negotiations and build on the historic introduction of a separate schedule to the Franchising Code of Conduct for the auto industry on 1 June 2020.

Those reforms were the biggest for the industry in years and included extending the notice needed to terminate agreements, as well as regulations to improve transparency and communication.

The federal government’s response to the ‘Fairness in Franchising’ report in August this year, also included reforms that allow auto-dealers to have a fair, effective and accountable framework while still encouraging competition in franchising.

This included doubling the maximum fiscal penalty applying to a breach of the Franchising Code and implementing more accessible, enforceable and effective dispute resolution.

The federal government’s work on Unfair Contract Terms will also benefit dealers by making unfair contract terms unlawful, and giving courts the power to impose civil penalties.

These efforts have been made to work towards balancing the need to better protect car dealers with an environment that is attractive to manufacturers to invest in the nation – as well as ensuring the best deal for everyday Australians buying vehicles.

Since this is a dynamic and changing industry, the government said it will review the relationship between car dealers and manufacturers in two years.

Source: Minister for Industry, Science and Technology media release