Why a loophole in government policy could end up costing motorists

The government has worked with car companies and independent workshops for eight years to make running costs fairer for consumers. It may be in vain.

A loophole in proposed changes to vehicle repairs could prevent motorists from saving money by having cars serviced through independent workshops.

As exclusively revealed by News Corp Australia on Monday, nationwide changes outlined in a Treasury consultation paper will require car companies to co-operate with smaller businesses, giving independent mechanics access to material withheld by manufacturers.

But the Australian Automotive Aftermarket Association (AAAA) said proposed policy crafted through eight years of industry consultation could be compromised by a clause allowing manufacturers to restrict information or access for independent workshops wherever safety, security or the environment is concerned.

AAAA chief executive Stuart Charity said the Treasury’s proposal includes a “loophole” which car companies could use as “a catch-all excuse”.

“Anything could be related to security, safety or the environment,” he said.

“We just want a fair go.”

Changes outlined in a Treasury consultation paper will require car companies to co-operate with smaller businesses. Picture: Supplied

While manufacturers claim the increasingly complex nature of cars makes it risky to give smaller companies access to key information, Mr Charity said cash is at the core of the issue.

“This is purely about the commercial return of car companies,” he said.

“There’s a commercial incentive for car companies to tie customers to their dealership network.

“There should be some safeguards around security-related information — key codes and immobilisers and so on. But security should not be used as an excuse.”

A Treasury spokeswoman said “the government has not yet decided on the details” of the information-sharing scheme, and that the proposal released on Tuesday only set out “possible elements” of potential regulations.

“The Government is keen to ensure that all consumers can have their vehicles repaired safely and professionally, and that all repairers are competing on a fair playing field,” she said.

“We will work very closely with industry to make sure the right balance is struck.”

Manufacturers fighting to retain lucrative service dollars have been put on notice by the ACCC.

Manufacturers claim the increasingly complex nature of cars makes it risky to give smaller companies access to key information. Picture: Jay Town

Holden agreed to a court-enforceable undertaking with the ACCC in 2017 after the consumer watchdog found it misled customers regarding warranties, some of whom “were told that a remedy would not be provided because the vehicle had not been serviced by a Holden dealer”, in contravention of Australian consumer law.

While companies such as Kia offer free roadside assistance for the first seven years of ownership, Ford only grants roadside coverage to customers who service their car through official dealer networks.

Capped price servicing programs have also made it difficult for smaller workshops to compete with dealerships.

Toyota’s policy to support dealers by subsiding service costs — priced from as little as $140 per visit — keeps customers coming back.

The Treasury’s consultation paper said equal access to information such as diagnostic equipment, service manuals, wiring diagrams and computer codes “would provide a level playing field in the sector and ensure consumers can have their vehicles safely repaired by the repairer of their choice”.

It said the Federal Government will carefully consider eligibility for third-party technicians, setting in place requirements for “skills, training and equipment, to ensure that repairers are able to repair cars safely and securely”.

Ford Australia offers roadside assistance to customers — but only if they pay for servicing through official dealers. Picture: Bloomberg News

Data subject to privacy legislation, along with trade secrets, intellectual property and commercially sensitive elements will be deemed off limits.

But a clause suggesting “access to safety, security and environmental (SSE) information would be restricted” has the AAAA concerned.

“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 said.

“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.”

Lenore Fletcher, director of communications for the Federal Chamber of Automotive Industries, said manufacturers are right to take a guarded approach to third-party repairs.

“Given the highly sophisticated and technical nature of the modern automobile, the FCAI will bring a strong focus on the safety and wellbeing of automotive staff, technicians and customers to the discussion,” she said.

“This focus on safety is particularly relevant considering the new and innovative technology that is now entering the market in the form of pure electric, hybrid and hydrogen fuel cell vehicles, and the tooling and training that is critical to safely service and repair these vehicles.”

Treasury is open to consultation surrounding the issue until March 11.

More information: Treasury.gov.au/consultation

Originally published as Why a loophole in government policy could end up costing motorists