Car manufacturers and new car dealers have been asked to review the Australian government’s ideas for improving their relationship, in an effort to make the nation’s new car market more competitive.
Requiring big manufacturers to give dealers at least 12 months notice when they won’t be renewing a dealer agreement is among suggestions contained in a paper released for consultation on Thursday.
The step comes after a 2017 study by the Australian Competition and Consumer Commission found a power imbalance between large car manufacturers and new car dealers was hampering competition.
Industry Minister Karen Andrews said the sector makes a significant contribution to the economy and the government wants to keep it competitive.
Almost $63 billion in revenue was generated in the sector last year, with 1.2 million cars sold through 3500 outlets that employed 67,000 people.
‘We want to hear how we can best support car dealers and manufacturers to thrive in the changing business environment, ensuring long-term business growth,’ Ms Andrews said on Thursday.
The newly-released paper considers whether car manufacturers and dealers should be governed by a different, unique code, rather than the Franchising Code that they currently fall under.
Making manufacturers give dealers more notice if they won’t be working with them again and explaining exactly why are also among ideas being considered.