Category: Latest News

Australia’s peak body representing independent automotive repairers, the Australian Automotive Aftermarket Association (AAAA), welcomes today’s release by the Federal Government of a Consultation Paper relating to the introduction of a Mandatory Scheme for the Sharing of Vehicle Service and Repair information between car companies and Australia’s 23,000 independent automotive repair businesses.

The AAAA and its members have anticipated the release of this Consultation Paper since the Australian Competition and Consumer Commission (ACCC) recommended that the Government mandate the sharing of vehicle data between multinational car companies and Australia’s independent repairers following a comprehensive industry study that was completed in December 2017.

While supporting the Federal Government’s move towards the establishment of a mandatory code for vehicle data sharing, the AAAA warns that some aspects of this Consultation Paper are inconsistent with the ACCC’s findings.

“We welcome the steps forward that the Government has made in moving towards the establishment of a mandatory code under the Competition and Consumer Act (CCA) for the sharing of vehicle data with Australia’s independent repairers by releasing this detailed Consultation Paper today,” stated AAAA Chief Executive Officer, Stuart Charity.

“We strongly encourage the Government to take on board the full ACCC findings and recommendations relating to the attributes of a mandatory scheme, as the overriding objective of this scheme is to provide fair and open competition to promote choice and affordability for all Australian car owners.

“We are concerned about the language used throughout the Consultation Paper that relate to “exclusions” and “restrictions” that may be included in a mandatory code.  Of course there will need to be safeguards in place to protect the security and integrity of vehicle related data, however vehicle security should not be used as an excuse by car companies to withhold critical information required to complete a vehicle repair or service.

“These terms were not used in the ACCC Final Report and if they are included in the final code, we have no doubt that car companies will fully exploit this by linking all required information to either security, safety or emissions and in reality nothing will have changed for consumers,” Mr Charity stated.

“In order for Australian consumers to be treated fairly when it comes to the scheduled servicing, maintenance and repair of their vehicles, car companies should not be able to decide who receives information based on their own definitions relating to safety, security and emissions. The ACCC’s Final Report recommended that all required technical information ‘be shared with independent repairers on commercially fair and reasonable terms, subject to appropriate safeguards to enable the sharing of environmental, safety and security-related technical information’ and we fully support this recommendation,” Mr Charity added.

The Consultation Paper also refers to vehicle manufacturers potentially being able to determine the appropriate level of investment by independent workshops in order to receive access to service and repair data. It is the firm belief of the AAAA that this will provide vehicle manufacturers with the ability to charge exorbitant fees for information, special tools, training and equipment and is completely unworkable in a market which has over 74 different car brands on sale. All this will achieve is higher servicing and repair costs for Australian consumers, defeating the entire purpose of establishing a mandatory code.

The AAAA would also like to see greater acknowledgement of the important role of third party data aggregators in the Australian market. With 74 vehicle brands on Australia’s roads, combined with the need for consumers to be able to access convenient and affordable servicing and repairs wherever they live and for whatever brand of car they drive, the majority of repairers use data aggregators to access servicing information. It is commercially unrealistic for an all-makes-all-model repairer to subscribe to every individual car brands’ data service. The Consultation Paper does not discuss this sector in any depth, yet data aggregators are vitally important to enable our industry to provide consumers with choice and competition for vehicle servicing and repair work.

Of additional concern is the Consultation Paper’s suggestion that there may be no penalties imposed for car companies while they transition from their current anti-competitive behaviour in their own time. While it is only fair that an implementation date is established to allow car companies sufficient time to launch subscription services, there is no point in establishing a mandatory code that does not include sanctions for non-compliance once that phase-in period has ended.

“The AAAA will participate constructively in this Consultation process as it is a step in the right direction.

“However we believe that after two separate Government Inquiries on this matter and over eight years of consultation, it is now time for the Government to build on the ACCC’s findings and recommendations and implement a Mandatory Code as a matter of urgency.

“We also have the advantage of being able to mirror the main attributes of the highly successful USA model which has resulted in all relevant technical information being shared with independent repairers without limitations, exclusions or restrictions,” Mr Charity added.

Have you been locked out of updating a customer’s log book?

Lately there has been an increase of members unable to update electronic logbooks. Some car brands are denying independent repairers access to update service information. All year we have been submitting complaints to the ACCC on a case by case basis, but we feel that now is the right time to step up our efforts.

Due to this recent increase in reports we will now be making a formal submission to the ACCC supported by a collection of case studies.  It’s obvious to everyone that some manufacturer’s electronic logbooks (we’re talking  about you, Land Rover) are intentionally designed to block out independent repairers from accessing the logbooks and updating service information. Do you have some evidence – even a quick email with the date, time, year and  vehicle model – that’s enough for us!  Or, have you contacted the manufacturer/dealer and asked for access and they have rudely told you where to go? Send us the emails, or a record of the conversation to Elyse Keyser at elyse@aaaa.com.au. Or call Elyse on 03 9545 3333 and tell her what happened.

These actions matter – whatever you do makes a difference, we just need to work together.  We’ve already had considerable success on the wording  of hard copy log books, so It’s worth the effort – we promise.

The Australian Automotive Aftermarket Association (AAAA) warmly welcomes the Australian Competition and Consumer Commission (ACCC) Final Report into The New Car Retailing Industry which was released today.

Following on from the detailed recommendations made in the ACCC’s Draft Report which was released in August, the ACCC’s Final Report recommends a mandatory scheme that will compel all car companies operating in Australia to share the same repair and service information that they currently share with their dealerships, with independent repairers on fair and reasonable commercial terms.

“To say that we are delighted with this outcome would be a major understatement,” AAAA Executive Director Stuart Charity stated.

“This is a David and Goliath story. A group of small independent repairers spread throughout the country with limited political skill and very limited resources, took on the might of the multinational car companies. The car industry leveraged their financial, lobbying and marketing power to criticise the skill and credentials of our industry, telling Government that all vehicle repair and service information was being made available but independent repairers didn’t have the skills to use it. The ACCC has refuted those claims and the evidence supports our seven year Choice of Repairer campaign.”

Mr Charity also believes that time is of the essence to act on the recommendations contained in the ACCC’s Final Report. “The Government has the independent umpire’s verdict which contains clear evidence of anti-competitive behaviour. They now need to act quickly to protect consumer choice and competition in the automotive repair and service industry. There is no reason for any delay as this recommendation has been a long time coming. It has been five years since the Commonwealth Consumer Affairs Advisory Council (CCAC) recommended that the Government consider the introduction of a mandatory code for data sharing. Finally, after an exhaustive 18 month review, the ACCC has recommended government intervention in the form of a mandatory scheme, so it is now time to act,” Mr Charity stated.

“Australia’s 17 million car owners and more than 20,000 independent automotive repairers deserve better than the current situation that finds the car manufacturers routinely and deliberately preventing consumers from exercising choice and their consumer legal rights,” He concluded.

The ACCC’s Final Report has also recognised the key role that third party data aggregators play in supporting all make and model repairers and has included this important sector into their recommended mandatory scheme.

The adoption by government of the ACCC recommendations will provide a level playing field and help to secure the future of over 20,000 Australian independent automotive repairers that consumers trust to service and maintain their cars on a daily basis all over the country.

The real congratulations for achieving this long awaited recommendation from Australia’s peak competition umpire belong to the AAAA members. These businesses took on the might of the multi-national car industry and provided evidence to the ACCC of instances where vital repair data was being withheld.  They also invited local Members of Parliament into their workshops to witness first-hand the impact that lack of data access has on their ability to compete and provide competition and choice for their customers.

Australia’s independent repairers, their staff and their customers all shared in this journey and this achievement belongs to them. The ACCC’s Final Report findings are testament to their tenacity and their commitment to our industry. More importantly, the ACCC’s Final Report findings detail their commitment to their customers – Australian car owners, who have suffered the most as a direct result of the withholding of service and repair information.

The ACCC Final Report also outlines the power imbalance between the car manufacturers and their franchise dealers, supporting further examination into this relationship and its impact on consumer outcomes.

“We also believe that there an argument for ensuring a transparent and fair relationship between the car manufacturers and their dealers. We have always stated that the dealers are the “meat in the sandwich” in much of this debate, with the car companies dictating the dealership business model,” Mr Charity stated.

“We believe that the key to great consumer outcomes is to have both dealers and independent repairers on a level playing field, competing for customers on their merits. The Choice of Repairer campaign has never been about bashing dealerships and if they also need a fairer deal, the AAAA would fully support that,” He added.

The AAAA sincerely thanks its members for their outstanding efforts and dedication to doing the best they possibly can for their customers on the Choice of Repairer campaign journey.

The AAAA also wishes to thank the ACCC for their thorough investigative work into our industry, which now will ultimately achieve the outcome that was always its main goal – to best protect the people who are affected the most by the lack of a mandatory scheme for data sharing in the automotive repair sector, Australia’s 17 million car owners.

CLICK HERE to view the complete ACCC Final Report into New Car Retailing.

CLICK HERE to view the fact sheet for Independent Repairs.

The Australian Automotive Aftermarket Association (AAAA) has launched an information brochure titled The truth about Capped Price Servicing – a workshop guide to the facts to ensure independent workshops – and their customers – understand the facts about these car company offered packages.

This is the third part of a AAAA led national education campaign to place key facts about vehicle service and repair issues in the public forum. The first two information brochures covered the facts about new car servicing and about so called “genuine” parts.

Executive Director Stuart Charity said the AAAA Capped Price Servicing brochure aims to dispel some of the myths and spin perpetuated by the car industry. “This brochure presents the facts clearly and simply to educate consumers and to give independent workshops confidence in dealing with their customers,” said Stuart Charity.

“These three brochures are part of the AAAA Choice of Repairer initiative. This is a member driven campaign designed to help protect consumer choice and advocate for fair competition in the car repair and maintenance sector,” said Stuart Charity.

 

What is Capped Price Servicing?
Capped Price Servicing (CPS) is a routine maintenance program that purportedly offers new car owners a fixed or capped price on (some) servicing requirements, provided that certain conditions are met.

CPS plans are usually marketed as an enticement for purchasing a new car, although they are primarily used as a customer retention tool designed to keep service work and the purchase of parts and accessories within the dealership network.

Stuart Charity said many car companies use the term “Capped Price” to give the impression to motorists that such plans offer full transparency over pricing and superior value for money.

“In reality, this is often not the case. It is important that consumers carefully read the conditions involved in any CPS deal prior to purchasing a vehicle,” he said.

“For example, vehicle owners may not be aware that the cost of a CPS program may be built into the purchase price of that car.

“In addition, many CPS plans do not cover critical service items as specified in the manufacturers own recommended service schedules. These services or replacement parts often come at additional cost.

“This is despite the services or parts being identified by the car manufacturer as essential to preserving the new car warranty, as well as protecting the resale value and life of the car,” said Stuart Charity.

 

Exposing the myths
Stuart Charity said it is in the interests of every workshop owner, and the general automotive community, to provide factual information and to educate the motoring public to ensure that they are aware of their statutory rights with respect to buying and maintaining a new car.

“This Capped Price Servicing element of the AAAA campaign includes an educational brochure containing facts to help workshop staff answer some basic questions that their customers may have about CPS. It also contains vital questions that vehicle owners should ask before entering into a CPS plan.

 

“AAAA encourages all independent workshops and all vehicle owners to get the facts by downloading a copy of the “The truth about Capped Price Servicing – a workshop guide to the facts” at www.choiceofrepairer.com.au,” said Stuart Charity.

 

 

Before you sign – make sure the Capped Price Servicing contract says what you think it says!
The AAAA information brochure includes these vital questions that consumers should ask their new car dealer before entering into a Capped Price Servicing (CPS) agreement:

• Is the service price actually capped for the life of my car, or can these prices be increased over time?

• Does the CPS include a full safety check, or is this an additional charge?

• Will there be additional parts and services required to maintain my new car warranty and if so, at what cost?

• Is the CPS price built into the purchase price of the vehicle and if so, do I have the option of taking this as a discount off the sale price?

• Does the capped price include all parts and lubricants that are required to be replaced on my car over the duration of the program, and if not, how can I be assured that these will not be supplied at an inflated cost?

• How long am I locked into a dealer only service option under the CPS program and are there any penalties imposed if I miss a scheduled service?

CLICK HERE to download the ‘Truth about Capped Price Servicing’ brochure.

 

 

What are “genuine” car parts?  Are they really made by car companies? Does fitting independent aftermarket parts and accessories risk voiding your manufacturers’ warranty?

Research by the Australian Automotive Aftermarket Association (AAAA) has shown these are questions many workshop technicians may find difficult to answer.

AAAA Executive Director Stuart Charity said: “If the industry cannot answer these questions accurately, what hope do car owners have?”

Stuart Charity said for many years car companies have successfully promulgated the “myth” that you need to fit “genuine” parts sold by their dealerships, or risk voiding your manufacturers’ or “new car” warranty.

“Most consumers are completely unaware that they have extensive statutory rights under Australian Consumer Law when buying a new car. Car companies cannot restrict these rights by forcing car owners to use their dealerships and branded parts when servicing their new car.

“The AAAA believes in free and open competition as the best way to ensure that all Australian car owners have access to affordable, high quality repairs and parts,” said Stuart Charity.

“To achieve this we must ensure that consumers have access to factual information, so they can exercise their statutory rights under Australian Consumer Law. To help deliver the facts to consumers, the AAAA has initiated an educational campaign for independent aftermarket workshop operators,” said Stuart Charity.

The AAAA is distributing a brochure titled The Truth about Genuine Parts – A Workshop Guide to Dispelling the Myths to provide workshops with:

• Definitions used to distinguish between the different sources of parts available in the market.
• Previously released Australian Competition and Consumer Commission (ACCC) guidance on car parts.
• An outline of “best practice” workshop procedures in relation to parts ordering and the benefits of workshops communicating clearly with customers about the parts they are fitting.

And for the record . . .
The term “genuine” parts is used as a marketing tool by car companies as a general reference to parts and accessories that are sold in their own branded packaging.

“It is important to note that car manufacturers do not make the majority of parts themselves. They are almost always made by third party component suppliers and put in boxes with the manufacturer’s brands on them.

“It is common for these same component suppliers to also sell parts under their own brand – same part, same factory, different box,” said Stuart Charity.

“And while it is true that not every part sold in the aftermarket is manufactured by an Original Equipment Manufacturer (OEM) supplier, every parts manufacturer and distributor has the same obligations under Australian Consumer Law.

“The Australian Competition and Consumer Commission (ACCC) has previously issued guidelines that explain that the issue is not who manufactured the part, it is whether the parts are fit or appropriate for the purpose intended.

“If a part is non-genuine, but is interchangeable with the genuine part, it would be viewed as being fit or appropriate for the purpose and would therefore not void the manufacturer’s warranty.

Source from reputable manufacturers and suppliers
“However, if the aftermarket part fails, or causes damage to the vehicle, the vehicle manufacturer would not be liable for any damage caused by the failure of that part. It is therefore important to ensure that both workshop operators and their parts suppliers provide reliable warranty support and have adequate insurance.

“The critical point for independent workshops is to only source parts, lubricants and accessories from reputable manufacturers and suppliers. These parts also come with Consumer Guarantees under Australian Consumer Law in the very same way that OEM parts do.

“Aftermarket parts may also provide a significant price advantage. Using unknown internet sources to get a cheap price is not good policy,” said Stuart Charity.

AAAA invites independent workshop owners to download a copy of the “The truth about genuine parts – a workshop guide to dispelling the myths”

AAAA lodged a comprehensive submission to the Australian Competition and Consumer Commission (ACCC) on Monday November 14. This has been a long process and the AAAA remains committed to ensure the fairest possible outcome is achieved for its members who are trusted by millions of Australian motorists nationwide. Our customers own their cars and should also own the right to select who repairs their vehicle without any form of competitive restriction.

The 80 page submission responds to important questions raised by the nation’s foremost competition regulator and consumer law champion relating to the sharing of vehicle repair data and information, as a part of the ACCC Market Study on New Car Retailing. In our formal response to the ACCC, we presented the results of an independent study of 325 independent repairers who service more than 18,000 cars per week.

Background:
We met with the government soon after the election and applied pressure to ensure that the election promise on choice of repairer was honoured. Federal Minister for Small Business, the Hon Michael McCormack annexed the critical issue of the sharing of vehicle repair data and information to the ACCC study in October 2016.

October 2016
The ACCC released an issues paper with detailed questions in relation to vehicle manufacturer and dealer practices that are severely disadvantaging independent repairers and importantly, our customers. The breadth of the ACCC’s investigative questioning represents the most detailed study the competition regulator has ever undertaken into the new car sales and after sales service sector.

November 2016
In our formal response to the ACCC, we presented the results of an independent study of 325 independent repairers who service more than 18,000 cars per week. This study was designed to quantify the direct effects of the withholding of codes, software updates, Technical Service Bulletins, vehicle specific tooling and access to repair information portals by vehicle manufacturers from these predominantly small, family operated businesses and their customers. The independent study found that the direct losses suffered by independent vehicle repairers in time, effort and overall productivity comes at a staggering cost to of more than $4 billion per annum. The overwhelming majority of this cost is absorbed by independent repairers and not passed onto consumers, but such drastic productivity and profitability losses clearly cannot be sustained in an industry that employs tens of thousands of Australians and provides trusted quality automotive repairs, service and maintenance to millions of Australian consumers each year.       The questions raised by the ACCC and supported by the AAAA’s survey research responses bode well for greatly needed changes to regulation. A mandatory industry code is the solution to ensure fairness not just for independent repairers, but importantly for our customers: The vehicle owners in Australia who elect to have their vehicle maintained and repaired by an independent repairer.

The fact that the current consumer and competition laws allow vehicle manufacturers to restrict access to a car owner’s online service logbook, software updates, known manufacturing faults and fixes or even the vehicle’s oil blend is simply unconscionable. The fact that our members are being regularly sought by their customers to assist them in having their warrantable consumer rights honoured by new car dealerships is equally disturbing. Somewhere in all of this, the concept of who actually owns the car has been totally lost. Consumers must retain the right to select their preferred repairer, access their vehicle service logbook, be given transparency and choice over where their vehicle data is sent and stored and have their statutory warranty rights respected. Through this detailed submission in response to the ACCC’s study, we seek to rectify this.

Independent Repairers: Invest in Training and Equipment.
The car manufacturers association has stated that our sector ‘needs’ to invest in tools and training. We wanted to address this head on because we know that they are telling government that cars may be a little too sophisticated for our sector and that why data can only go to dealerships.

We now have evidence that independent repairers are investing heavily in training and equipment in order to best service customers. The study found that this issue has nothing to do with our sector not being able to service and repair more sophisticated modern vehicles. All that is missing in most cases are things as simple as a six digit code to finish the work, or access to manufacturer information relating to known faults and fixes for specific vehicles. The withholding of this information by vehicle manufacturers and their dealer networks ensures that independent repairers spend hours troubleshooting issues that with direct access to the manufacturer information, could in many cases be rectified in less than 15 minutes.

The AAAA study of 325 independent vehicle repairers across Australia found that more than 80% view the withholding of vehicle repair data, vehicle specific tooling and known vehicle fault and rectification updates as a serious or critical issue for the future of their business viability.

The car companies, through their peak body the Federal Chamber of Automotive Industries (FCAI), maintain that they are not aware of any issues with independent repairers accessing repair and service information. This complete denial of the problem continues, despite the clear and repeated evidence provided to the FCAI through the AAAA’s register of complaints from consumers and workshops.

Our submission to the ACCC also strongly supports the competition authority’s view that vehicle manufacturer extended warranties may not offer additional benefit to consumers beyond their existing statutory consumer guarantee rights. In most if not all cases, these “free” extended warranties are merely a strategy to once again compel consumers to return to the dealership and pay heavily marked up prices for service and parts.

For interviews or additional comments please contact:

Mr Stuart Charity
Executive Director
Australian Automotive Aftermarket Association
T: 0418 563 959

Ms Lesley Yates
Senior Manager, Government Relations & Advocacy
Australian Automotive Aftermarket Association
T: 0402 005 476

To read the full AAAA submission to the ACCC Market Study on New Car Retailing please CLICK HERE.

The Federal Election is now over and we finally have a result

During one of the longest election periods in living memory, we invested in a highly strategic effort to gain awareness of what is happening in our industry and to our customers, and more importantly to secure solid election commitments to fix it.

There can be little doubt that most people in our industry are aware of the more high profile components of our campaign during the election.  Whilst many other activities occurred behind the scenes, it was common knowledge that hundreds of workshops made direct representation to their local MPs, MPs and candidates conducted visits to local constituent premises and you are no doubt aware that we met with every major political party and released an Election Scorecard (see AAAA Scores Political Parties’ Policies on Vehicle Data Sharing article) detailing all of the formal election commitments that we had gained from Labor, The Coalition, Nick Xenophon Team, Ricky Muir (AMEP) and The Greens.

The short summary of the Election Score card is that every Party acknowledged that the consumer should chose who repairs their car – a principle endorsed by everyone and acknowledged as a pre-condition to a fair and competitive market. As we expected we achieved varying levels of commitment on a formal review process from everyone. Each Party positon varies slightly on how to conduct the review and many of these commitments stated that they were aware of failings in the current voluntary Heads of Agreement.

The Greens formally adopted a position in favour of a Mandatory Code. The Labor Party expressed their support for consumer choice. Ricky Muir promised to push for a Mandatory Industry Code (see Make It Mandatory: Automotive Repair Code Of Practice article) and he launched a draft of this code prior to Election Day (sadly we do not think we will see Ricky Muir back in the Senate for this election term). The Coalition provided a commitment that we were pleased to receive. Actually we were delighted to see that after so many representations to the Government, there can be no doubt that we finally succeeded in shaping their policy commitment. The words used in their formal election commitment were our words, they offered solid commitments with clear timelines, a process and clear outcomes. We could not have hoped for a better outcome and it is a clear endorsement for our strategy, our persistence and our determination. The Coalition stated that if re-elected, a Turnbull Government would commission an independent review of the current Agreement and its supplementary codes. They included a timeline – this review is to be commissioned within three months of the election. Most importantly, the Coalition committed to include consideration of a national mandatory portal.

You may not be as delighted as we are; the thought that we went through all of this process for yet another review may be received with some despair. This is because most repairers have already conducted their own review in the form of real life every day experiences of not being able to access software updates, PIN codes or TSBs. Most repairers have already given the voluntary process a resounding fail. But the commitment from the re-elected Turnbull Government goes much further than that. Firstly the timeline – this is warmly welcomed by us, a clear timeline creates almost a contract between us, it gives the process a sense of urgency and it helps to counter the car manufacturers greatest weapon – stall and delay. We have an agreement that within three months we will have a review and we have already written to the Minister to start this process.

What else do we have? For the first time in this campaign, the government of the day has used the M word – MANDATORY. The fact that the review will consider how the Agreement has (not) worked, how the parties to the Agreement have behaved, how consumers are disadvantaged – this is great. But what is even better is that the Government will start to canvass the options for solving the problem, including a mandatory data sharing portal, as part of the Review process. This is a great win for our industry and for consumers. What this effectively means is that we have a review, that we have no doubt will discover that the voluntary Agreement is not working and more importantly we will have our preferred option evaluated as a solution – all in the same process.

So what happens now? We continue with the same determination and the same energy that we have shown for the past seven years. We gather strong evidence, we work ethically and tirelessly and we work together as a team. We stick to the truth and to the principle of fair and open competition on fair and reasonable terms. We go back to government as quickly as we can and we hold them to their promises.

Stay tuned for more updates.