Regulation Impact Statement Updates

Official website for publishing regulatory impact analysis information for regulatory decisions announced by the Australian Government, COAG and COAG Councils.

Franchise relationships between car manufacturers and new car dealers

Aust Gov
24th February 2020

Regulation Impact Statement for consultation – Department of Industry, Science, Energy and Resources

On 14 February 2020, the Department of Industry, Science, Energy and Resources released a RIS for consultation that explores options to address concerns with the power imbalance between car dealers and manufacturers.

This RIS identifies four options for regulatory intervention which will have a positive net benefit. Together these options seek to address the identified problems in the new car retailing sector in scope for this RIS:

  • Option 2A – requiring manufacturers and dealers to provide at least 12 months’ notice when not renewing a dealer agreement. It will also require manufacturers and dealers to discuss, plan and agree end of term arrangements when not renewing an agreement.
  • Option 2B – requiring manufacturers and dealers to provide a statement to the other party outlining why a dealer agreement is not being renewed.
  • Option 2D – requiring pre-contractual disclosure of significant capital expenditure to have a greater degree of specificity.
  • Option 2F – enabling multi-franchisee mediation.

The RIS estimates the average annual regulatory costs at $4.575 million. The OBPR has agreed to the regulatory costs.

Details of the Consultation process can be found on the Department’s website. The consultation period closes on 13 March 2020.

The RIS was prepared and certified by the then Department of Industry, Innovation and Science. The Office of Best Practice Regulation assessed the RIS as suitable for public consultation.

An earlier Regulation Impact Statement (RIS) was prepared by the then Department of Industry, Innovation and Science and was published for consultation on 20 December 2018.

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