FCAI: Car dealers immune from change

The Federal Chamber of Automotive Industries (FCAI) says recent events have led to an increased reference to – and discussion about – how consumers buy vehicles in Australia.

FCAI Chief Executive Tony Weber is keen to ensure there is a clear understanding of what these potential models, including agency, will mean to consumers.

Weber said consumers had choice in how they buy clothes, electronics and watch TV, and want the same choice when buying a new car.

“Innovation and competition are kings across the retail landscape. Despite this, some car dealers want to immune themselves from change, even when customers are crying out for new ways to do business,” he said.

“Efficient, effective markets rely on innovation, transparency and flexibility – the new car market is no different.”

Weber said over-reaching regulation from government should not stand in the way of reform, improvement and growth that responds to consumers’ changing needs.

“The agency model is one example that enables innovation and evolution and provides choice and competition to today’s consumers, regardless of where they live, who do not want the same car buying methods and experience their parents and grandparents had.

“Even the federal government acknowledged the importance of the agency model as an option by including it in the franchising code, which was implemented in July 2021,” Weber said.

“It introduces consistent pricing to Australia’s new car market and retains competition between car brands. Australia has 52 brands and more coming – that is the competition which drives down prices for consumers.

“This model will for the first time enable regional car buyers to buy any model through their local dealership and not have their choice limited by their location.”

FCAI says Deloitte research shows that new car sales account for less than five per cent of dealer revenue.  The more profitable areas of after sales service, parts and accessories, used cars, and finance remain unchanged under the new sales models which are designed to improve the experience of customers. Weber said the FCAI believed that Australia had extensive competition and franchising regulations and further Government intrusion into the marketplace would stifle the industry’s capacity to innovate to meet the changing needs of the Australian consumer.