Since this time we and MTAA members have continued to gather evidence from repairer members to provide a supplementary submission to the ACCC.
So it is time to set the record straight on this matter.
Voice for the whole industry
The MTA WA is often criticised for simultaneously representing many and varied industries within the automotive sector, many of whom are direct competitors. But it is this membership diversity that provides the MTA WA with the insight, knowledge and capability to understand the idiosyncrasies of each industry and their respective needs and requirements. Our diversity is what makes us such a strong, powerful advocate for the entirety of the automotive industry. This diversity has also greatly assisted the MTAs through our national body the Motor Trades Association of Australia (MTAA), to develop potential, whole of sector solutions, a process which is recognised and greatly appreciated by the Government, policy makers and legislators. It is also this recognition that allows the MTAA to hold seats on the Australian Tax Office’s Small Business Stewardship Group and ACCC’s Franchise and Small Business Consultative Committee and the MTA WA to hold seats on the Department of Commerce’s Motor Vehicle Industry Advisory Committee.
The MTA WA and MTAA have always maintained the consumer’s right to choose their repairer - be it mechanical, body, or a discrete profession (such as brakes, tyres, electrical, windscreen, engine etc.); be they dealer, franchised, independent, specialised or multi brand (or any other business model). This has been a foundation principal of the MTAA since its formation nearly 30 years ago and in MTA WA’s case over 80 years.
Freedom of Choice for a consumer is not a new mantra coined for current marketing spin by some other associations – it is a fundamental right for consumers and businesses alike and central to open and transparent economies.
The issue that the MTA is working to address is the need to identify a balanced, fair approach to access to technical information ensuring that no one sector within the automotive industry unfairly is advantaged over another.
So what has the MTA WA and MTAA achieved to date?
It was in fact the MTAs that were the first to identify the growing issue of access to technical information and the impact this has on members. The issue is and continues to be the lack of hard evidence to support further action. Governments will not accept anecdotal information as a means to intervene in the marketplace. This is why the MTAA established the complaints system on the MTAA web site and despite AAAA’s protests, MTA WA has only received four complaints over the past year. This is not to suggest that there is not a problem, but members need to provide the information to allow the association to take corrective action. It was this fact that was borne out in the original inquiry, which also could not point to overwhelming evidence despite expressed concerns.
It was the Victorian Automotive Chamber of Commerce (VACC) who established one of the world’s largest databases of technical information and made that information available to industry irrespective of whether they were members of their MTA or not. This service and facility is now nationally coordinated and available through all MTAA Members and is one of the most centralised, comprehensive, and coordinated service offerings provided anywhere in the world.
It was also the VACC that established a national technical information call centre providing real time assistance to repair inquiries, this centre also includes the largest collection of technical information in the southern hemisphere. It was also the VACC that negotiated agreements with key manufacturers to supply information through this portal and they continue to add manufacturers.
It was the MTAA that advocated and brought to the attention of regulatory and policy authorities the increasing concerns in relation to the complexity, technology and interdependency of vehicle systems and increased awareness of emerging problems in accessing information and properly using this on fair commercial terms.
The MTAA provided comprehensive and balanced representations to the Commonwealth Consumer Affairs Advisory Council Review of Sharing of repair information in the automotive industry and led the response to a major recommendation of this inquiry that the automotive sector address the issue through the creation and implementation of a voluntary code of conduct.
When it became clear, after protracted negotiations that representative organisations would not agree on a formalised Code of Conduct MTAA and Members assisted the Federal Government in facilitating and coordinating a whole of industry agreement to drive improvements in access to information as the first phase of addressing this critical issue.
This agreement only occurred because the Federal Government of the day responded to MTAA advocacy and representation efforts to drive an industry- led solution, and our offer to facilitate and coordinate this. By doing this the MTAA negated the real risk of government intervention, which may have had unintended consequences for repairers including increased costs and compliance; particularly if it had been designed by bureaucrats with no understanding of the automotive industry.
The Agreement that was developed was the best that could be achieved at the time given the positions of the participants, but there appeared to be genuine commitment to making it work. Clearly the issues of security and environmental information including access to re-initialisation codes and related matters were ‘parked’ as final resolution could not be achieved in the scope of the original agreement.
The MTAA and state associations are now advocating for an accreditation program to improve the current access to information impasse. It must be recognised that the existing dealership network cannot cope with a national car park fast approaching 20 million vehicles on their own; or can independents, or any other individual sector of the industry. There is room for all businesses and industry should work together to provide the means to ensure that consumers are not disadvantaged.
In developing any solution there must be consideration of the following:
- Respect the intellectual property and R&D costs of the OEM, be that a manufacturer or supplier.
- Recognise that new car retailers incur costs to access repair information; equip and tool workshops; and train their people. Independent repairers should not expect any less requirement in terms of ensuring consumer safety or protection albeit they may not necessarily carry the same overheads or business costs.
- Recognise that independent mechanical and motor body repairers and discrete automotive professions provide alternative consumer choice, and do so under different business models and with different overheads and product /service offerings.
- Ensure that as far as practicable there is no competitive advantage to any sector within the automotive industry in regard to access, cost of access, training , tooling and equipment because of market dominance or penetration.
- The security of the information is assured and protected; not just motor vehicle data, but also personal consumer data that may also be embedded in vehicle systems.
- All agreed information is provided on terms that are timely, comprehensive and commercially fair and reasonable.
- That in accessing the information, that the repairer is also appropriately qualified, licensed (where applicable), properly trained and equipped, in order to carry out the repair in accordance with consumer safety and protection requirements.
Careful what you wish for
AAAA have stated that there is no need for an accredited model and whilst in Western Australia there may be an argument to support this it needs to be remembered that in at least three other states there is no licensing requirement for repair businesses, meaning any individual can set up a repair business. The outcome of allowing this type of business access to manufacturer’s information could be catastrophic for the consumer and the MTA cannot support this view.
The MTAA and state associations have tried to engage other peak automotive groups since the signing of the agreement to progress this enhancement. Indeed the agreement reached made it clear we were to continue to bring enhacements and address the ‘parked’ issues, but momentum was lost when everyone started to go back to preferred positions.
We have also put forward a number of potential solutions to manufacturer / distributor and dealer associations in 2016 after consultations with Australian Automotive Repairers Association (AARA) divisions nationwide. These solutions have, contrary to the assertions of another association, included models or variations of models found in the United States and Europe. These approaches have unfortunately been rejected by these associations.
Little or no understanding exists within any government departments or agencies of the nuances of the motor vehicle retail, service, repair or recycling industries. Existing models / legislation from the United States and Europe will be points of reference for Australian Government policy makers and legislation drafters. However other considerations and influences must also be, and will be, taken into account; such as Australia’s Competition and Consumer Laws and other legislative and regulatory instruments.
If a government solution / intervention is enacted it must take into account the needs of the Australian consumer and all parties impacted and the result could well be cumbersome, complicated and increase compliance burdens and costs. It is very much a case of “be careful what you wish for”.
None of these matters are given any airtime in the rhetoric you may hear from others and this is why MTAA and Members have advocated a preferred position of the solution being industry driven and identifying what these solutions might be for consumer benefit.
However, given the ongoing intransigence and reluctance of all industries representative organisations in the automotive sector to negotiate, compromise and provide a solution, MTAA and Members believe that the Government must use a legislative instrument to force the Sector to comply with the development and implementation of an industry led solution that enhances the existing agreement to cater for full access and include (where a repairer business wishes to do so) security and environment information. This should include strict timelines for adherence - ideally within 18 months.
Whether that is in the form of an accredited brand repairer scheme or an alternative model that ensures that the consumer can deal with confidence with their repairer of choice, the issue needs to be addressed and the time for government to make a call on this issue is now.
The MTAA and MTA WA will continue to work with the government and other industry bodies to develop a solution that provides for an equitable approach to accessing repair information. Currently there are 17 manufacturers who account for approximately 75% of all vehicles on the road providing access to technical information on the web. This is a good start but we will continue to have this extended.
This article was originally published in Motor, Volume 82 No.1 March 2017.