Oz Consumer Agency to Scrutinize New-Car Retailing

The Australian Competition and Consumer Commission releases an outline of a planned new-car retailing industry market study, but immediately faces complaints the inquiry doesn’t go far enough.

The market study will review industry practices to assist in identifying risks to consumers and the competitive process.

Key issues include compliance with consumer-guarantee obligations; interaction among consumer guarantees and extended warranties by manufacturers and dealers; the effect on competition and on consumers of post-sale service arrangements; availability and access to new-car repair and service information; and false, misleading and deceptive practices in fuel consumption, carbon-dioxide emissions, noxious emissions and car performance.

The study also will look at the buying behaviors and expectations of consumers purchasing new cars, in addition to the structure and operations of the new-car retailing industry.

But the Australasian New Car Assessment Program says the scope of the study needs to be widened to cover safety-rating information.

ANCAP CEO James Goodwin says it’s unfortunate the commission fails to recognize the importance of safety-rating information in new-car purchasing.

“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 says in a statement.

Commission Chairman Rod Sims says in a statement his group and other Australian consumer-law agencies receive a high volume of complaints from consumers about new cars.

“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,” Sims says. “This issues paper will assist people in identifying and alerting the ACCC to risks to consumers and the competitive process that may occur when buying a new car.”

The Australian Automobile Association calls the market study an important step in safeguarding consumers’ right to choose the vehicle repairer of their choice.

AAA CEO Michael Bradley says the telematics revolution is seeing new vehicles gather more information than ever before about drivers and transmit that information directly to the automaker.

“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.”

The AAA also says it welcomes the commission’s focus on fuel-consumption and vehicle-emissions information.

“The Australian government performs no independent or real-world testing of vehicle manufacturer claims when it comes to the emissions and fuel usage of new cars sold in Australia,” Bradley says.

As a result, fuel-consumption labels are based on laboratory tests largely performed overseas or, in some cases, by the automaker.

“The failure to adequately audit manufacturer compliance with current or future emissions standards will see Australians at risk of paying much more than they expected to run their new car.”