The Australian Competition and Consumer Commission (ACCC) released a draft report today of its market study into Australia’s new car retailing industry.
The study comes following a series of complaints received by the ACCC and other Australian Consumer Law (ACL) agencies about misrepresentations to consumers, defects with vehicles, and problems in post-sale service markets.
ACCC Chairman Rod Sims says the draft report highlights the “urgent need to address widespread issues in the industry”.
“Complaints to the ACCC about new car manufacturers have risen to more than 10,000 over the past two years,” he said.
The ACCC has identified three key observations that came from the study:
- Car manufacturers’ complaints handling systems and policies are preventing consumers from getting remedies they are entitled to under ACL.
- New car buyers need more accurate information about their car’s fuel consumption and emissions.
- A mandatory scheme should be introduced for car manufacturers to share technical information with independent repairers.
So far in 2017 the ACCC has taken action against Ford, Holden, Volkswagen and Audi.
The ACCC invites comments on the draft report from the public before it is finalised in late 2017.
— 7 News Melbourne (@7NewsMelbourne) July 26, 2017
Consumers cheated by non-compliance with the law
The ACCC has found that new car buyers are “losing out” thanks to many car manufacturers not factoring consumer guarantee rights into their complaints-handling process.
These rights would help consumers if their new car experiences a failure, whereby they would be entitled to a free repair for a minor failure, or a replacement or refund if there is a major failure.
Mr Sims says the ACCC supports recent recommendations made in a consumer law review to address uncertainties and strengthen consumer guarantee rights.
“These proposed changes would entitle consumers to get a refund or replacement within a set period of time if their new car doesn’t work,” he said.
“They would also clarify that multiple non-major failures can amount to a major failure and also require that there be clearer disclosure to consumers in relation to warranties.”
Demand for more “real-world” fuel consumption and emissions information
The ACCC’s draft report also shows that consumers are not receiving accurate information about fuel consumption or emissions performance when they buy a new car.
The ACCC Chairman says it is very concerned about what new car buyers are being told, considering fuel consumption and emissions are often “major purchasing factors”.
According to the Australian Automobile Association, “real-world” fuel consumption is on average 25% higher than the official laboratory results printed on vehicle labels.
“Car manufacturers and dealers must ensure the representations to consumers about fuel consumption and emissions are accurate and appropriately qualified,” said Mr Sims.
ACCC said it supports the introduction of more realistic laboratory tests and an on-road ‘real driving emissions’ test, which may allow consumers to make more informed decisions.
Independent car repairers not given the information they need to do their job
The $24.8 billion repair and servicing sector has also been affected, according to the ACCC’s findings.
Independent repairers are having problems with the detail and timeliness of technical information provided to them by new car manufacturers – information which is essential for them to make the correct repairs for consumers.
“Car manufacturers should be required to share new cars’ technical information with independent repairers,” said Mr Sims.
“For new cars to be properly repaired and serviced, independent repairers need access to electronic information and data produced by car manufacturers.
“This lack of competition hurts new car buyers who have fewer options to get the best deal for repairs and servicing, and restricts independent repairers from competing on a level playing field.”