Prime Minister Anthony Albanese has warned new Chinese car brands that they must not rip off customers during a meeting with Australian car dealers.
Mr Albanese addressed around 200 people representing almost 4000 dealerships at an Australian Automotive Dealer Association summit on Wednesday.
Promising to improve the balance of power between manufacturers, dealers and customers, Albanese recognised the industry is addressing the impact of “a growing field of new manufacturers” reshaping the industry.
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“We want Australians to be able to choose from the broadest possible range of vehicles and manufacturers at the best possible price,” he said.
“We want to make it clear to companies new to the Australian market that they also have to meet standards around service, not rely on volume alone.”
New brands such as BYD have acknowledged customer service must improve as sales have grown far faster than support networks, leading to parts supply shortages and long delays in servicing.
Industry figures show BYD sells more cars per dealer outlet than any other brand in Australia, having delivered an average of 989 cars per showroom last year – more than established rivals such as Toyota (857), Ford (477), Volkswagen (246) or Honda (183) that have decades of history in Australia.
James Voortman, AADA chief executive, said 28 new brands have joined Australia in the last five years and that there are many more to come.
Industry experts expect the number of brands in Australia to grow from around 70 today to more than 100 before 2030.
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Voortman said dealers scarred by Holden’s decision to leave Australia are worried that “this level of competition is unsustainable”.
“The thing we’re most fearing is that brands are required to withdraw from the Australian market,” he said.
“It wasn’t that long ago that Holden packed up. We’ve seen others depart this market in recent years.
“We will see more of these.
“Whether it’s legacy brands that can no longer compete with an emerging Chinese sector, or whether it’s Chinese brands you have to depart because some kind of rationalisation has occurred in China, meaning that brands here are no longer viable.”
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Car dealers have lobbied the government for changes to franchising laws that allow manufacturers to set terms in their favour, requiring enormous investment from dealers who have little protection from the car companies they represent.
The Prime Minister said “unfair trading practices” were in the government’s sights, and that laws addressing the situation would be introduced this year.
“We know that in order to protect consumers from unfair practises, we have to protect dealers as well,” he said.
“We’re going to get this balance right.
“This is about addressing the power imbalance, correcting a double standard that the AADA has campaigned strongly against, and making sure that multinational manufacturers cannot engage in conduct towards dealers that would be illegal if it was directed at consumers.”
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Mr Albanese said cars were not a purchase taken lightly.
“There are plenty of items we buy online on impulse,” he said.
“Scrolling Instagram, ad pop-up, click through, a few days later the delivery arrives and you wonder what on earth you were thinking. I cannot imagine doing that with a new car.
“It is a moment in its own right, something that you never forget.
“And more often than not it’s tied to a significant event in your life – a couple with a bub on the way who want a new car to put their child’s seat in, someone finishing their apprenticeship and upgrading to their own ute, an Australian starting a small business or expanding their fleet, backing themselves, creating jobs, and seeing their car as a statement about their service and standards.
“When those are the stakes, no one wants to just tick a box. We want to kick the tyres, see the choice on offer, go for a test drive.”
Mr Albanese acknowledged that “war in the Middle East is disrupting supply chains”, and driving up the cost of living.
“It’s pushing up fuel prices and it’s adding to pressure on inflation here and right around the world,” he said.
“Australians understand this. People are not just reading about this conflict in the news, they’re seeing the economic impact that it’s having in their daily lives, not least of which is of course the interest rate increase decision by the Reserve Bank just yesterday.
“It is obvious but important to say that the longer this war goes on, the more significant those effects will be.
“Even if this is a relatively short conflict, it will have a long economic tail.
“We want to make sure that we do everything we can to shield the Australian economy, households, and businesses from the worst of global uncertainty.”
The Prime Minister responded to criticism surrounding the Government’s role in maintaining stead fuel supply in Australia, saying local fuel reserves “are the largest they’ve been in 15 years, as a result of us making that conscious decision to build them up”.
