May 15, 2020
The Australian Automotive Dealer Association (AADA) – the peak body representing new car dealers – says it strongly supports Senator James McGrath calling out General Motors’ poor treatment of Australian car dealers.
“The COVID-19 crisis has overshadowed the actions of a multinational, Fortune 500 company ending its more than a 100-year association with Australia and treating local dealers very poorly in the process,” AADA CEO James Voortman said.
“After announcing it was terminating 185 dealers across Australia, the compensation offered to those dealers has been described as totally inadequate and not one dealer has accepted the offer,” he said.
The AADA said the behaviour of Holden, along with Honda who have more recently cut their operations in Australia, highlights the risks many local car dealers face, and the power imbalance that exists between them and multinational car companies.
“It’s not just the car companies pulling out of Australia who are a threat to local dealers, but the unfair terms many of them face in their commercial arrangements,” Mr Voortman said.
“This is an ongoing problem, not just for the dealers but also for Australian consumers and small business who rely on them.”
The AADA has been working with the Federal Government on draft automotive franchising laws due to be finalised in coming weeks.
“It is crucial that these laws are strengthened so that dealers are given protections similar to those afforded to dealers in countries like the USA and the European Union,” Mr Voortman said.
“Since the emergence of the COVID-19 crisis, GM have reportedly turned the screws and failed to budge on their initial compensation offer, telling dealers their ability to be a future authorised service dealer is dependent on them accepting the offer.
“After so many Holden dealers have given so many years to this brand, it is incredibly disappointing that during a very tough time for the industry GM are not exiting Australia in a fair and dignified manner, despite their assurances they would do so.”
Mr Voortman said Holden had terminated all its dealers and Honda have cut a substantial portion as well.
“If these multinationals need to withdraw or restructure their networks, so be it, but there must be a set of regulations that ensure they do so fairly,” he said.
“Dealers are doing it extremely tough with some of the worst sales figures in living memory.
“The ability to recover from this economic downturn will be greatly assisted by laws which protect dealers against the abuses of multinational vehicle manufacturers.
“We need local dealers to provide local jobs and work for local small businesses, and we need to encourage and support local dealers to invest and grow their business, especially as we look to recover from the terrible impacts of drought, bushfires and COVID-19.”