Allens Insight: Automotive sector outlook

AFIA Associate Member Allens has published a new Insight, ‘Automotive sector outlook: what's driving recent trends’, which reflects on key issues and trends impacting the sector.

The Insight notes the Federal Government has now legislated a new Franchising Code of Conduct, which will take effect on 1 April 2025, replacing the current version of the Code, which is due to 'sunset'.

For motor vehicle franchisors, the following represents some key aspects of the new Code:

• A revised definition of 'motor vehicle dealership', which expressly captures 'any servicing or repairing of motor vehicles' conducted by dealers, or associated with a dealership agreement, where the dealer buys, sells, exchanges or leases motor vehicles.

• Franchisors will no longer need to provide a key facts sheet to franchisees, separate from the disclosure document. Existing franchisees will be entitled to opt out of receiving disclosure documents, and also the 14-day cooling-off period, at the time of renewal or extension of the franchise agreement.

• Under the new Code, all substantive obligations will attract civil penalties if breached.

The Insights also highlights the recent commencement of the New Vehicle Efficiency Standard Act 2024, forming a central part of the Government's National Electric Vehicle Strategy which aims to promote Australia's transition to a decarbonised transport system by providing a national framework to enhance the supply of, and access to, EVs. 

Treasury is also expected to publish a Decision Regulation Impact Statement that will set out the Government's preferred options in relation to proposals to strengthen the consumer guarantees under Australian Consumer Law and has also outlined proposals for a new prohibition on unfair trading practices.