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The Federal Chamber of Automotive Industries (FCAI) has condemned the move by the Hon Karen Andrews MP, Minister for Industry, Science and Technology, to ‘fast-track’ changes to new vehicle franchising agreements.

Tony Weber, chief executive of the FCAI, said the Chamber had been working with the Government for many months on this topic, and industry was awaiting confirmation of the Minister’s decision to implement changes from 1 July 2020 at the earliest.  The industry was aware of, and had been working towards, incorporating those changes across the network in a fair and equitable manner to benefit the entire industry.

By providing the industry with no effective notice of the change to the commencement date, new vehicle distributors are understandably furious with the so-called improvement in transparency that has not only confused the industry, but also, it appears, the Government.  The Government has been unable to articulate how this change to the implementation date does anything other than create confusion.  How can policies be announced on Friday that start on Monday?  Who benefits from these timetables?

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“The automotive industry in Australia agrees in principal with the updated Franchising Code.  However, the timing of the implementation is complex and problematical.

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“There was a clear understanding between the Minister’s office and the industry that the implementation date was 1 July or later, and this is demonstrated throughout all the documents including the exposure draft legislation.

“The fact that the Government has randomly brought forward the commencement date and prematurely implemented the changes is simply inexplicable,” Mr Weber said.

“The ramifications of this early implementation include significant commercial and potentially legal implications for network management for automotive brands and their dealers. The Minister needs to correct this error and ensure that the distributors and dealers can make decisions that are in the best interests of the whole network.”

This issue comes at a time when automotive brands and their networks are facing the toughest conditions in recent history, with the industry facing its 26th consecutive month of decreasing sales. In addition, the effects of the COVID-19 pandemic on the industry has been crippling, with May 2020 sales down 48.5 per cent on the previous year.

“The industry, which employs over 60,000 people, is in difficulty, and randomly implemented legislation is the last thing we need.

“We implore the Minister to immediately implement changes to the commencement date,” Mr Weber said.