Consumer watchdog takes Honda to court

The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court against Honda Australia, alleging the car-maker misled customers about where they could get their cars serviced.

The litigation concerns Honda’s actions with customers of two high-profile dealerships – Astoria Honda Brighton (Brighton Automotive Holdings) in Victoria and Tynan Motors in New South Wales – which had their franchise agreements terminated as the Japanese brand restructured its operations in Australia last year.

Under the new structure, which took effect on July 1, 2021, Honda has reduced the size of its retail network and its remaining dealers now operate as agents for the car-maker, adhering to fixed vehicle pricing for its pared-back model range and what’s claimed to be industry-leading capped-price service costs.

The ACCC alleges that between January and June last year, Honda represented to customers of Astoria and Tynan that the dealerships would close – or had already closed – and would no longer service Honda vehicles.

However, the two long-standing dealers – both of which had been with Honda for some 50 years – were continuing to trade independently and were continuing to service vehicles, including Hondas.

“While Astoria and Tynan were no longer a Honda franchisee, they remained open as independent dealerships and were able to service Honda vehicles,” said ACCC commissioner Liza Carver.

In its statement to the court, the ACCC alleges Honda told customers of Astoria and Tynan – via emails, text messages and phone calls – that the dealerships had closed and that they should contact an authorised Honda dealership or Honda Service Centre to book their next service.

“We allege Honda deprived customers of the opportunity to make an informed choice about options for servicing their car in favour of a Honda-linked dealership which may have been less convenient or more costly for them,” said Carver.

“We also allege Honda caused harm to the Astoria and Tynan businesses by falsely claiming they had closed or would close, which may have led customers to have their Honda vehicles serviced elsewhere.

“It is important that independent dealerships can service vehicles of all brands, and from 1 July dealerships will have fair access to the necessary technical information from all manufacturers to service and repair all makes of cars.”

This last statement references new laws passed last year that allow independent repairers to gain access to vehicle data held by car-makers for the exclusive use of their franchised dealers.

In response, Honda Australia said it “has co-operated with the ACCC’s investigation into this matter”.

“We are reviewing the recent filing by the ACCC and at this stage are unable to comment further on specific circumstances or details regarding the claims made or individual dealers,” the company said.

The ACCC’s court action is the latest development in a long-running dispute between Honda and key dealer partners since the restructure was announced in May 2019, which has seen 36 dealers have their franchise agreements terminated.

Honda’s actions were also scrutinised in a 2020 Senate inquiry into the relationship between car manufacturers and retailers.

During the inquiry, the directors of Astoria Honda Brighton revealed that they had taken separate court action against Honda Australia after failed mediation over compensation for the franchise termination.

In the wake of the inquiry, which was an extension of an earlier probe established after Holden was axed by General Motors, the federal government introduced a new franchising code of conduct that brings tough new penalties of up to $10 million for car-makers who don’t treat their dealers fairly.

Related: Dealer takes Honda to court

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