ACCC Releases Issues Paper for New Car Retailing Industry Market Study

Tuesday 18 October 2016 @ 9.01 a.m. | Trade & Commerce

The Australian Competition and Consumer Commission (ACCC) has released an Issues Paper for the New Car Retailing Industry Market Study which was announced in June 2016, providing detailed information on the scope of the study and how interested parties can participate.

Aim of the Market Study

The market study will review industry practices in the sector to assist in identifying risks to consumers and the competitive process. The key issues to be covered by the study include:

  • compliance with consumer guarantees obligations and the ability of consumers to enforce their rights;
  • interaction between consumer guarantees, manufacturer’s warranties and dealer’s extended warranties;
  • the effect on competition and on consumers of post-sale service arrangements (such as servicing and repair);
  • availability and access to repair and service information and data for new cars; and
  • false, misleading and deceptive practices in fuel consumption, carbon dioxide (CO2) emissions, noxious emissions and car performance

The study is also exploring buying behaviours and expectations of consumers purchasing new cars, in addition to the structure and operations of the new car retailing industry.

How does the ACCC use market studies?

The ACCC uses market studies for a variety of reasons to support its various functions which may include improving the ACCC’s understanding of a specific sector, as well as enabling the identification of:

  • competition issues;
  • market failures; and
  • possible solutions.

Alternately, a market study may confirm competition in the relevant markets is functioning effectively and no action is needed. The ACCC has been increasingly using market studies as a tool for this purpose. It has recently completed the East Coast Gas inquiry and is currently undertaking market studies of the cattle and beef markets  in Australia.

Comment from ACCC

ACCC Chairman Rod Sims said:

“A new car is one of the most significant purchases that a consumer will make and issues with these purchases can have a significant financial consequence. The ACCC and other Australian Consumer Law agencies continue to receive a high volume of complaints from consumers about new cars and this market study will help identify any systemic issues across the sector. 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. The representations made to consumers about fuel consumption and emissions are another key issue, as are issues around regular servicing and repairs and the ability of independent repairers to access repair and service data. 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 ACCC will be seeking information from the public to inform its study. Submissions are invited until 14 November 2016. The ACCC expects to release a draft report for comment in mid-2017 before publishing a final report in late 2017.

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products.

Sources:

ACCC releases issues paper for new car retailing industry market study – ACCC Media Release MR 189/16

Related Articles: