AAA praises ACCC car retailing study

The Australian Competition and Consumer Commission (ACCC) is about to initiate a study into Australia's new car industry that will address numerous aspects of new-car retailing, including warranties, after-sales practices and the fuel consumption and CO2 exhaust emissions figures claimed by car makers.

Due for completion with the publishing of a final report in late 2017, the study was flagged by the ACCC in an announcement in June this year.

According to ACCC Chairman Rod Sims "The ACCC and other Australian Consumer Law agencies continue to receive a high volume of complaints from consumers about new cars and this market study will help identify any systemic issues across the sector."

Key issues to be considered in the study will include:
• compliance with consumer-guarantee obligations and the ability of consumers to enforce their rights,
• interaction between consumer guarantees, manufacturer's warranties and dealer's extended warranties,
• the effect on competition and on consumers of post-sale service arrangements (such as servicing and repair),
• availability and access to repair and service information and data for new cars,
• false, misleading and deceptive practices in fuel consumption, carbon dioxide (CO2) emissions, noxious emissions and car performance

Mr Sims continued: "The ACCC would like to determine if car manufacturers and dealers understand their consumer guarantee obligations, and whether consumers are able to exercise their rights."

The study has been welcomed by the Australian Automobile Association (AAA), which recognises within the study further support for its stand against the FCAI. As the body representing car importers and manufacturers in this country, the FCAI has been reluctant to hand over new vehicle data to AAA members engaged in repairing and servicing vehicles.

AAA Chief Executive Officer Michael Bradley said: "Australia is on the cusp of a 'telematics' revolution which is already seeing new vehicles gather more information than ever before about drivers; and transmit that information directly to the car maker.

"Access to diagnostic information is critical to ensuring cars are properly serviced. So with the amount of data produced by cars set to skyrocket and the rights to that data to become even more important to consumers, it is timely for the ACCC to examine whether there has been a lack of access to vehicle service and repair data, and if so, whether it has caused consumer detriment or created barriers to entry for independent servicing and repair businesses."

However James Goodwin, who is the Chief Executive Officer at the Australasian New Car Assessment Program (ANCAP), while praising the study as "an important step in understanding consumer needs in a changing and competitive marketplace" was critical of its failure to look into safety rating information.

"It is unfortunate the issues paper released by the ACCC fails to recognise the importance of safety rating information as a key element in the new car buying process. A recent survey showed nine in ten new vehicle buyers believe ANCAP safety ratings should be displayed on all new cars," he said.

"Consumers invest significant amounts of money in a new car purchase so it is important to ensure safety information is correctly marketed and no competitive advantage is gained from brands or dealers through the misuse of vehicle safety ratings," Goodwin observed.

The ACCC is inviting submissions from the public to help further inform the study. These should be received before November 14 2016. A draft report will be released for comment in mid 2017 before the final report later in the year.