The new car industry has been put on notice, as the ACCC reported 10,000 separate car complaints within the last two years.

In its research released today, the ACCC raised three key observations that were of concern to the entire automotive industry:

  1. car manufacturers’ complaints handling systems and policies are preventing consumers from obtaining the remedies to which they are entitled under the Australian Consumer Law (ACL)
  2. a mandatory scheme should be introduced for car manufacturers to share technical information with independent repairers
  3. buyers of new cars need more accurate information about new cars’ fuel consumption and emissions.

The move follows recent action against numerous manufacturers in the motor vehicle industry including Holden, Ford, VW and Audi.

Non-compliance with the Australian Consumer Law

“The ACCC is deeply concerned about the level of non-compliance with the Australian Consumer Law in the new car industry,” ACCC Chairman Jeremy Sims said.

“We will continue to take action to address failures by car manufacturers and retailers to provide the remedies to which consumers are entitled.”

The ACCC has identified five key issues contributing to the difficulties consumers are having enforcing their consumer guarantee rights:

  • car manufacturers’ focus on warranty obligations to the exclusion of their consumer guarantee obligations
  • there is a dominant ‘culture of repair’ underpinning car manufacturers’ systems and policies for dealing with car defects and failures
  • the widespread use of non-disclosure agreements by car manufacturers when resolving complaints
  • the lack of effective independent dispute resolution options for consumers
  • particular features of the commercial arrangements between car manufacturers and dealers

“The ACCC supports recommendations in the recent consumer law review to address uncertainties and strengthen the application of consumer guarantee rights,” Mr Sims said.

“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. 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.”

Sharing of technical information

The ACCC found problems with the detail and timeliness of technical information given to independent repairers. This is despite a voluntary commitment made by car manufacturers in 2014 to provide independent repairers with the same information to repair and service new cars that they provide to their authorised dealers.

“Car manufacturers should be required to share new cars’ technical information with independent repairers. For new cars to be properly repaired and serviced, independent repairers need access to electronic information and data produced by car manufacturers,” Mr Sims said.

“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.”

Fuel consumption and emissions performance figures

The ACCC also found that consumers are not receiving accurate information about the fuel consumption or emissions performance of new cars.

“Fuel consumption and emissions are often major purchasing factors for buyers when choosing their new car. We’re concerned that what new car buyers are told their car will achieve is very different from practice,” Mr Sims said.

Research from the Australian Automobile Association indicates that real-world fuel consumption is on average 25 per cent higher than official laboratory test results that are provided on mandatory vehicle labels.

 

This information was sourced from the ACCC report “New Car Industry Put On Notice”. Further information on the research can be found here.

 

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