Industry experts claim that franchise code alterations do not shield dealers from the same repercussions experienced by Holden dealers.

Franchise Code of Conduct Review Leaves Industry Figures Disappointed

The long-awaited results of a review of the Franchise Code of Conduct have finally been released, and the outcomes have left many in the industry dissatisfied. The review was conducted by small business expert Dr. Michael Schaper, who presented his recommendations to Parliament in February 2024.

Industry bodies such as the Australian Automobile Dealers Association (AADA) and the Motor Trade Association of Australia (MTAA) have expressed concerns that the proposed amendments do not go far enough to protect car dealers, especially in the wake of major brand exits from the market like Holden’s departure in 2020.

According to the AADA chief executive, James Voortman, car dealers across Australia are disappointed with the response to the review. They are urging the government to consider stricter regulations for specific car franchises to prevent future situations like the Holden exit.

The MTAA also believes that more work needs to be done to ensure that the Franchise Code is suited for the rapidly changing automotive retail environment, especially as the industry transitions towards electric vehicles.

One of the key recommendations from the review is the introduction of a licensing regime to better regulate the relationship between franchisees and franchisors. While this change is significant, it is expected to take longer to implement compared to other amendments set to take effect in April 2025.

The Federal Chamber of Automotive Industries (FCAI), representing car manufacturers, has welcomed the outcomes of the review, particularly the provisions related to new car dealers. They have expressed their commitment to promoting fair and transparent trading practices in the evolving automotive industry.

Overall, the review of the Franchise Code of Conduct has sparked a conversation about the need for stronger regulations to protect the interests of both car dealers and manufacturers in the changing landscape of the automotive industry. The government will need to carefully consider the recommendations and work closely with industry stakeholders to address the concerns raised by the review.

In conclusion, the Franchise Code of Conduct Review has highlighted the need for ongoing dialogue and collaboration between government, industry bodies, and businesses to ensure a fair and competitive environment for all stakeholders in the automotive sector.