ACCC cracking down on car industry

Alex Ritchie

Alex Ritchie

( 3 min read )

The days of being sold a lemon could be coming to an end. 

The Australian Competition & Consumer Commission (ACCC) has released the draft report of its market study into Australia’s new car retailing industry. 

The draft report illustrates an urgent need to address widespread issues, with the ACCC receiving more than 10,000 complaints over the last two years. 

The ACCC have listed three key observations as drawn from this market study: 

  1. Non-compliance with the Australian Consumer Law 

In a statement released regarding the draft report, the ACCC has identified car manufacturers’ complaints handling systems and policies are “preventing consumers from obtaining the remedies to which they are entitled under the Australian Consumer Law (ACL)”. 

ACCC Chairman Rod Sims says the ACCC is deeply concerned about this level of non-compliance, finding 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”. 

Five factors contributing to difficulties Aussies are having in enforcing 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.

2. Sharing of technical Information


The ACCC have also found serious issues with the detail and timelines of technical information being supplied to independent repairers compared to authorised dealers. 

They have proposed that a mandatory scheme should be introduced forcing car manufacturers to “share technical information with independent repairers”. 

“The repair and servicing sector was worth a combined $24.8 billion in 2016-17 and dealers have an average 64 per cent profit margin on new cars they service,” according to the ACCC. 

“For new cars to be properly repaired and serviced, independent repairers need access to electronic information and data produced by car manufacturers,” said Mr Sims. 

  1. Fuel consumption and emissions 

Consumers are also not receiving accurate information about new cars’ fuel consumption and emissions, according to the ACCC draft report. 

“We’re concerned that what new car buyers are told their car will achieve is very different from practice,” said Mr Sims. 

According to the Australian Automobile Association, real-world fuel consumption is on average 25 per cent higher than official laboratory test results provided on mandatory vehicle labels. 

“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,” said Mr Sims. 

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