On 12 March, the Australian Government announced reforms to the regulatory arrangements governing relationships between automotive manufacturers and franchise automotive dealerships.
The announced measures involve:
- Increasing the penalties available under the Franchising Code.
- Transforming the existing voluntary principles into mandatory obligations under the Franchising Code.
- Clarifying the Franchising Code by explicitly recognising that dealers operating as a manufacturer’s agent in relation to new vehicle sales are still protected by the Franchising Code.
These additional changes follow a package of reforms to the automotive franchising sector enacted by the Australian Government in 2020, which were subject to a Regulation Impact Statement and extensive consultation.
The Prime Minister granted an exemption from the Regulation Impact Statement (RIS) requirements because due to urgent and unforeseen events requiring a decision before an adequate regulatory impact assessment could be undertaken.
Consistent with the Australian Government’s RIS requirements, a post-implementation review must be completed by the Department of Industry, Science, Energy and Resources within two years of implementation.
Consistent with the Australian Government’s RIS requirements, a post-implementation review has been completed by The Department of the Treasury Franchising Code of Conduct – expanding the scope of automotive franchising protections | The Office of Impact Analysis (pmc.gov.au).