The Australian Competition and Consumer Commission (ACCC) has commenced Federal Court proceedings against Honda Australia for allegedly telling customers two dealerships had closed when they were still operating.
The consumer watchdog’s filing relates to statements Honda Australia made to customers about two former authorised Honda dealerships: Brighton Automotive Holdings Pty Ltd (Astoria) in Victoria and Tynan Motors Pty Ltd (Tynan) in New South Wales.
The ACCC is seeking “declarations, pecuniary penalties and costs”.
It alleges Honda Australia represented to customers between January and June 2021 that these two dealerships either would close or had already closed, and would therefore no longer service Honda vehicles.
While these locations’ franchise agreements had been terminated following Honda Australia’s restructure, the businesses were still operating as independent dealerships and continued to service vehicles including Hondas.
The ACCC alleges Honda informed customers of these two dealerships via email, text message and phone calls that they needed to visit a different Honda dealership for servicing.
One automated text message published by the ACCC reads: “Your previous service dealer has closed so please find your nearest Honda Service Centre here: [link]”
“We allege Honda deprived customers of the opportunity to make an informed choice about options for servicing their car in favour of a Honda-linked dealership which may have been less convenient or more costly for them,” said ACCC Commissioner Liza Carver.
“We also allege Honda caused harm to the Astoria and Tynan businesses, by falsely claiming they had closed or would close, which may have led customers to have their Honda vehicles serviced elsewhere.”
Honda Australia has released a statement, saying:
“Honda Australia has cooperated with the ACCC’s investigation into this matter. We are reviewing the recent filing by the ACCC and at this stage are unable to comment further on specific circumstances or details regarding the claims made or individual dealers.”
The company terminated 36 of its dealerships’ franchise agreements effective from June 30, 2021 as part of its restructure and shift to an agency sales model.
Astoria and Tynan had both been selling Honda vehicles for approximately 50 years.
In a submission to the Senate Inquiry into the relationships between car manufacturers and dealers late in 2020, Brighton Automotive Holdings alleges it was told “without any prior notice” on March 23, 2020 that its agreement would end on June 30, 2021.
Their agreement had been set to end on June 30, 2023.
It further alleged the compensation methodology used by Honda and Deloitte “grossly” undervalued the loss the dealer suffered.
Later mediation between Brighton and Honda was unsuccessful.
In addition to announcing the court proceedings against Honda, the ACCC has also highlighted the introduction of the Motor Vehicle Service and Repair Information Sharing Scheme, which comes into effect on July 1, 2022.
This scheme requires OEM service and repair information to be made available for purchase by Australian independent repairers at a fair market price.
MORE: Honda to slash dealers, sales volume by July 2021
MORE: Toyota Australia faces payouts as Federal Court finds DPFs faulty
MORE: NSW Senator says Mercedes-Benz misled Senate over agency switch
MORE: ‘The ’70s are gone’: Car dealers must be prepared to evolve, says FCAI chief
