Consumer law proposal for car manufacturers in Australia

Recommendations have been tabled for changes to Australia’s new car retailing industry, insisting manufacturers need to be more transparent with new buyers around repair claims and car emissions.

The Australian Competition and Consumer Commission (ACCC) has released the final report from its 18-month market study, which investigated the automotive industry’s consumer relations.

It states that car manufacturers need to update their complaint handling systems and improve their approach to the handling of consumer guarantee claims.

The report proposes that manufacturers should adhere to a mandatory scheme whereby technical information with independent repairers is shared, providing new buyers “more accurate” information including a car’s fuel consumption and emissions.

“The ACCC recommends several reforms to improve the new car retailing industry, which should lead to better outcomes for consumers,” said ACCC Chairman Rod Sims.

“Some will require industry led change and others, we consider, require regulation.”

The ACCC has reviewed a range of “dealer agreements”, which are commercial arrangements between car manufacturers and dealers.

As it stands, information available to the ACCC indicates that dealers respond to consumer guarantee claims within the framework of the policies and procedures set by manufacturers.

“If manufacturers’ policies and procedures don’t adequately recognise consumer guarantee rights, this can influence the behaviour of dealers in responding to complaints,” Sims continued.

“We recommend 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.

“We are concerned that some manufacturers impose unnecessarily complex warranty claim processes, leaving dealers inadequately compensated for repairs or remedies provided to consumers,” he added.

Dealers have direct responsibility to provide remedies to consumers, according to the ACCC, but they also have a right under the Australian Consumer Law to recover the reasonable costs of providing these from the car manufacturers when the manufacturer is at fault.

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

The ACCC recommends that the Federal Government introduces more realistic laboratory tests for fuel consumption and emissions, and an on-road ‘real driving emissions’ test to give new car buyers more accurate information.

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

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