Investigation highlights ‘widespread issues’ among Australia’s new car manufacturers

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More than 10,000 complaints have been made about new car manufacturers in Australia over the past two years, a new report has revealed.

The Australian Competition and Consumer Commission (ACCC) has released a draft report, which highlights an “urgent need to address widespread issues” across the country’s new car industry

According to the investigation, car manufacturers’ complaints handling and policies are shunning consumer entitlements under Australian Consumer Law (ACL).

To help, it states that a mandatory scheme should be introduced for manufacturers to share technical information with independent repairers.

“The ACCC is deeply concerned about the level of non-compliance with the Australian Consumer Law in the new car industry,” said We will continue to take action to address failures by car manufacturers and retailers to provide the remedies to which consumers are entitled,” Mr Sims said.

The report found that many car manufacturers have not factored consumer guarantee rights into their complaints handling systems and new car buyers are losing out as a result.

These rights provide remedies for consumers if their new car experiences a failure, including a right to a repair without charge for a minor failure, or a replacement or a full refund for a major failure.

Read: ACCC investigation launched amid Takata airbag recall

The ACCC has identified five key issues contributing to the difficulties consumers are having enforcing their consumer guarantee rights:

  • Car manufacturers’ focus on warranty obligations to the exclusion of their consumer guarantee obligations
  • There is a dominant ‘culture of repair’ underpinning car manufacturers’ systems and policies for dealing with car defects and failures
  • The widespread use of non-disclosure agreements by car manufacturers when resolving complaints
  • The lack of effective independent dispute resolution options for consumers
  • particular features of the commercial arrangements between car manufacturers and dealers.

“The ACCC supports recommendations in the recent consumer law review to address uncertainties and strengthen the application of consumer guarantee rights,” Sims said.

“We will work with car manufacturers and dealers to develop easy guidelines which should be provided to consumers when they buy a new car so they are better informed.”

In addition, the ACCC has also found that buyers need more accurate information about fuel consumption ad emissions in new cars.

Research from the Australian Automobile Association indicates that real-world fuel consumption is on average 25 per cent higher than official laboratory test results that are provided on mandatory vehicle labels.

“Fuel consumption and emissions are often major purchasing factors for buyers when choosing their new car,” Sims said. “We’re concerned that what new car buyers are told their car will achieve is very different from practice.

“Car manufacturers and dealers must ensure the representations to consumers about fuel consumption and emissions are accurate and appropriately qualified.

“We also support introducing more realistic laboratory tests and an on-road ‘real driving emissions’ test to give people more accurate information before they buy.”

The ACCC is seeking comments on the draft report by September 7.