ACCC looks to shake-up car industry

THE Australian Competition and Consumer Commission (ACCC)’s 18-month-long investigation into the automotive retail industry has determined that manufacturers need to improve how they handle guarantee claims, consumers should be given more accurate fuel consumption and emissions data, and independent repairers should gain access to car-maker’s technical data.

The consumer watchdog’s report found that customers could be mistreated in the handling of complaints if manufacturer’s procedures do not properly recognise consumer guarantee rights.

ACCC chairman Rod Sims recommended “that car manufacturers update their complaint handling systems to ensure consumer law is front and centre of relevant systems, policies and procedures”.

“Conditions or obligations under the manufacturer’s warranty must not exclude or limit consumers’ rights,” he said.

“We will take action if a manufacturer prevents a dealer from fulfilling their legal obligations under consumer law.”

Furthermore, the report found that current real-world fuel economy and emissions figures could be up to 23 per cent higher than official test results.

The ACCC has proposed more realistic laboratory tests to better reflect real-world driving conditions and give buyers a more accurate picture of the cost to run a vehicle.

“Our research shows fuel consumption is the third most significant purchasing factor for consumers after price and model,” said Mr Sims.

“We are concerned that new car buyers are not receiving accurate information about fuel consumption or emissions performance.”

Finally, the ACCC’s study concluded that vehicle repair and service information should be freely available to independent workshops who have had “problems accessing technical information to repair and service new cars” in the past.

Since publishing the full report last week, a number of industry-leading bodies have voiced support for the proposed changes, including the Australian Automobile Association (AAA), the Motor Trades Association of Australia (MTAA) and the Australian Automotive Aftermarket Association (AAAA), who all praised the improved transparency afforded to customers purchasing a new vehicle.

AAA chief executive Michael Bradley called on the government to implement the suggested actions to give buyers the power to make better informed new-car purchasing decisions.

“If the government is serious about providing greater consumer choice and awareness about the efficiency of their vehicle to help reduce CO2 emissions, then now is the time to act,” he said.

“Our research indicates that in reality, many Australians are just not getting the sort of vehicle that they are paying for.

“There are millions of Australian motorists that can potentially benefit from the sensible ACCC recommendations and we urge the government to seriously consider those that improve consumer knowledge and choice.”

Meanwhile, MTAA CEO Richard Dudley also invited swift government action, and said the increased availability of repair information would be a boon for customers as Australia’s car parc swells.

“As the nation fast approaches a national fleet of 20+ million vehicles by 2020, consumers must be assured there are sufficient numbers of automotive businesses across all sectors that are not constrained in providing the ongoing sales, service and repair capability they will require, and that appropriate protections for consumers and industry participants alike are in place,” he said.

“We can no longer afford ongoing debate and procrastination in a rapidly changing industry and MTAA urges the federal government to not only support the ACCC recommendations, but for relevant ministers to call on the automotive industry to action those recommendations within their remit and within defined timeframes.”

AAAA executive director Stuart Charity said: "We also believe that there (is) an argument for ensuring a transparent and fair relationship between the car manufacturers and their franchise dealers.

"We believe that the key to great consumer outcomes is to have both dealers and independent repairers on a level playing field, competing for customers on their merits," he said.

However, the Federal Chamber of Automotive Industries (FCAI) has criticised the report for “a poor understanding of the industry” and lack of substantial evidence to back up its claims, with FCAI chief executive Tony Weber saying “at first blush it appears that the ACCC has taken 18 months research and understand a complex industry, and failed to properly comprehend it”.

“The ACCC’s report appears to be predicated on a very small number of complaints which it uses to tarnish Australia’s $17.5 billion retail motor industry. This is not only unfair, it is inaccurate,” he said.

Mr Weber says that the ACCC’s findings were based on “85 consumer complaints and 229 small business comments to support its position on mandating unfettered access to service and repair information”.

“The ACCC cherry-picked information to support its bias. Information provided to the FCAI by the ACCC on a confidential basis of complaints over a two-year period again reinforce the fact that the number of complaints are exceptionally small and most have been addressed by the car companies.

“Unfortunately, the ACCC has handcuffed us from releasing this information publicly.”

In particular, the Mr Weber took issue with the report’s conclusion that independent repairers should be given access to all original equipment manufacturer (OEM) service information when car-maker’s already voluntarily share high-level data.

“The reality is that as modern motor vehicles become more sophisticated, the independent repair sector needs to continue to adapt and change to ensure it remains relevant and up to date,” he said.

“Independent repairers shouldn’t be able to say they can repair all makes and models when clearly they can’t.

“If the ACCC supports mandating the sharing of service and repair information above the already high level of information provided voluntarily by car companies, then the ACCC will own the responsibility of the misuse of that information.”