The current power imbalance means manufacturers can impose unfair contract terms and set dealership expectations which are to their own advantage, making it difficult for local dealers to properly look after their customers.
As part of its New Car Retailing Industry report, the Australian Competition and Consumer Commission investigated concerns raised by new car dealers about the commercial arrangements between car manufacturers and dealers.
The power imbalance arises because the terms of dealer agreements are set by the manufacturer and dealers risk huge costs if the manufacturer decides not to renew the agreement.
Manufacturer policies often do not include claim-handling processes that specifically address or comply with consumer responsibilities under the Australian Consumer Law.
This hurts dealers, and can adversely affect how cars are serviced and repaired, as well as how owners' warranty claims are handled.
A Shorten Labor Government will drive a better deal for auto dealers by levelling the playing field between overseas car manufacturers and the small businesses that operate car dealerships.
Labor will implement an industry-specific code through regulations under the Competition and Consumer Act to deliver clear rules for manufacturers and dealerships.
The independent code will create a set of rules that both the manufacturers and dealers must observe when establishing expectations around dealer conduct.