Australian car dealers lose again as court rules in favour of Mercedes-Benz
The Federal Court has dismissed an appeal, filed in 2024, against a judgement it handed down in 2023.
In that ruling, where it found in favour of Mercedes-Benz Australia Pacific over a majority (38 of 50) of its franchised dealers, the Court found dealers hadn't been misled about the agency move and that Mercedes-Benz hadn't engaged in unconscionable conduct.
The Australian Automotive Dealer Association (AADA) said it's "bitterly disappointed" by today's decision, particularly as it follows the Supreme Court of Victoria's ruling earlier this year which found General Motors didn't breach its agreement with Australian dealers when it axed the Holden brand in 2020.
Hundreds of new car deals are available through CarExpert right now. Get the experts on your side and score a great deal. Browse now.
It's pushing for the Federal Government to introduce additional protections for automotive franchisees "so that the blueprint created by this court decision is not used by others".
"We welcome the decision of the Full Court of the Federal Court in this matter. Our focus continues to be on delivering luxury products and services for our valued customers around Australia," said a spokesperson for Mercedes-Benz.
At the heart of the original case, which commenced in October 2021, was the compensation Mercedes-Benz offered to dealers, although Justice Beach indicated Australian franchise law may once again need to be revisited and potentially modified.
"Australian dealers have been fighting to stop Mercedes-Benz using their power over franchised dealers to force them into one-sided business relationships. Today's decision is a significant blow to that fight which will have detrimental effects on Australia's franchising sector," said AADA CEO James Voortman.
"In handing down today's decision, there is now a clear need to protect Australian franchisees against unfair treatment from franchisors to arbitrarily change business models with no compensation.
"The presiding Judge in the original court decision clearly articulated the need for further amendments to the Franchising Code to protect the investments dealers make in their businesses.
"Today's decision confirms that current laws in Australia do not adequately protect new car dealers against unfair conduct and particularly are not being supported against unfair decisions being made in head office overseas.
"It is imperative that the Federal Government moves at speed to implement the commitments it made in the election to protect franchisees against unfair contract terms and unfair trading practices."
The move to an agency retail model resulted in Mercedes-Benz taking ownership of dealership stock, and removing the ability for customers and dealership staff to negotiate on prices – a change which dealers claimed would drive up prices of new models.
At the time of the initial court action, the 38 dealers were pursuing approximately $650 million in compensation.
Mercedes-Benz isn't the only auto brand to switch to an agency model in Australia, with Honda also doing the same – also resulting in legal action from some of its dealers.
Like Honda, Mercedes-Benz experienced a sales downturn after the switch in January 2022.
Deliveries of vehicles from its Cars division fell from 28,348 in 2021 to 26,801 in 2022, before dropping again in 2023 to 24,315 and then 19,989 in 2024.
But there's light at the end of the tunnel, it would appear, with deliveries in the first half of 2025 up 15.9 per cent on the same period last year to 11,146 in total – its best first-half of a year since 2023.
MORE: Everything Mercedes-Benz
Content originally sourced from: CarExpert.com.au
The head of the peak body for car dealers in Australia has slammed a Federal Court appeal decision that found in favour of Mercedes-Benz over dealers unhappy with its move to an agency sales model.
The Federal Court has dismissed an appeal, filed in 2024, against a judgement it handed down in 2023.
In that ruling, where it found in favour of Mercedes-Benz Australia Pacific over a majority (38 of 50) of its franchised dealers, the Court found dealers hadn't been misled about the agency move and that Mercedes-Benz hadn't engaged in unconscionable conduct.
The Australian Automotive Dealer Association (AADA) said it's "bitterly disappointed" by today's decision, particularly as it follows the Supreme Court of Victoria's ruling earlier this year which found General Motors didn't breach its agreement with Australian dealers when it axed the Holden brand in 2020.
Hundreds of new car deals are available through CarExpert right now. Get the experts on your side and score a great deal. Browse now.
It's pushing for the Federal Government to introduce additional protections for automotive franchisees "so that the blueprint created by this court decision is not used by others".
"We welcome the decision of the Full Court of the Federal Court in this matter. Our focus continues to be on delivering luxury products and services for our valued customers around Australia," said a spokesperson for Mercedes-Benz.
At the heart of the original case, which commenced in October 2021, was the compensation Mercedes-Benz offered to dealers, although Justice Beach indicated Australian franchise law may once again need to be revisited and potentially modified.
"Australian dealers have been fighting to stop Mercedes-Benz using their power over franchised dealers to force them into one-sided business relationships. Today's decision is a significant blow to that fight which will have detrimental effects on Australia's franchising sector," said AADA CEO James Voortman.
"In handing down today's decision, there is now a clear need to protect Australian franchisees against unfair treatment from franchisors to arbitrarily change business models with no compensation.
"The presiding Judge in the original court decision clearly articulated the need for further amendments to the Franchising Code to protect the investments dealers make in their businesses.
"Today's decision confirms that current laws in Australia do not adequately protect new car dealers against unfair conduct and particularly are not being supported against unfair decisions being made in head office overseas.
"It is imperative that the Federal Government moves at speed to implement the commitments it made in the election to protect franchisees against unfair contract terms and unfair trading practices."
The move to an agency retail model resulted in Mercedes-Benz taking ownership of dealership stock, and removing the ability for customers and dealership staff to negotiate on prices – a change which dealers claimed would drive up prices of new models.
At the time of the initial court action, the 38 dealers were pursuing approximately $650 million in compensation.
Mercedes-Benz isn't the only auto brand to switch to an agency model in Australia, with Honda also doing the same – also resulting in legal action from some of its dealers.
Like Honda, Mercedes-Benz experienced a sales downturn after the switch in January 2022.
Deliveries of vehicles from its Cars division fell from 28,348 in 2021 to 26,801 in 2022, before dropping again in 2023 to 24,315 and then 19,989 in 2024.
But there's light at the end of the tunnel, it would appear, with deliveries in the first half of 2025 up 15.9 per cent on the same period last year to 11,146 in total – its best first-half of a year since 2023.
MORE: Everything Mercedes-Benz
Content originally sourced from: CarExpert.com.au
The head of the peak body for car dealers in Australia has slammed a Federal Court appeal decision that found in favour of Mercedes-Benz over dealers unhappy with its move to an agency sales model.
The Federal Court has dismissed an appeal, filed in 2024, against a judgement it handed down in 2023.
In that ruling, where it found in favour of Mercedes-Benz Australia Pacific over a majority (38 of 50) of its franchised dealers, the Court found dealers hadn't been misled about the agency move and that Mercedes-Benz hadn't engaged in unconscionable conduct.
The Australian Automotive Dealer Association (AADA) said it's "bitterly disappointed" by today's decision, particularly as it follows the Supreme Court of Victoria's ruling earlier this year which found General Motors didn't breach its agreement with Australian dealers when it axed the Holden brand in 2020.
Hundreds of new car deals are available through CarExpert right now. Get the experts on your side and score a great deal. Browse now.
It's pushing for the Federal Government to introduce additional protections for automotive franchisees "so that the blueprint created by this court decision is not used by others".
"We welcome the decision of the Full Court of the Federal Court in this matter. Our focus continues to be on delivering luxury products and services for our valued customers around Australia," said a spokesperson for Mercedes-Benz.
At the heart of the original case, which commenced in October 2021, was the compensation Mercedes-Benz offered to dealers, although Justice Beach indicated Australian franchise law may once again need to be revisited and potentially modified.
"Australian dealers have been fighting to stop Mercedes-Benz using their power over franchised dealers to force them into one-sided business relationships. Today's decision is a significant blow to that fight which will have detrimental effects on Australia's franchising sector," said AADA CEO James Voortman.
"In handing down today's decision, there is now a clear need to protect Australian franchisees against unfair treatment from franchisors to arbitrarily change business models with no compensation.
"The presiding Judge in the original court decision clearly articulated the need for further amendments to the Franchising Code to protect the investments dealers make in their businesses.
"Today's decision confirms that current laws in Australia do not adequately protect new car dealers against unfair conduct and particularly are not being supported against unfair decisions being made in head office overseas.
"It is imperative that the Federal Government moves at speed to implement the commitments it made in the election to protect franchisees against unfair contract terms and unfair trading practices."
The move to an agency retail model resulted in Mercedes-Benz taking ownership of dealership stock, and removing the ability for customers and dealership staff to negotiate on prices – a change which dealers claimed would drive up prices of new models.
At the time of the initial court action, the 38 dealers were pursuing approximately $650 million in compensation.
Mercedes-Benz isn't the only auto brand to switch to an agency model in Australia, with Honda also doing the same – also resulting in legal action from some of its dealers.
Like Honda, Mercedes-Benz experienced a sales downturn after the switch in January 2022.
Deliveries of vehicles from its Cars division fell from 28,348 in 2021 to 26,801 in 2022, before dropping again in 2023 to 24,315 and then 19,989 in 2024.
But there's light at the end of the tunnel, it would appear, with deliveries in the first half of 2025 up 15.9 per cent on the same period last year to 11,146 in total – its best first-half of a year since 2023.
MORE: Everything Mercedes-Benz
Content originally sourced from: CarExpert.com.au
The head of the peak body for car dealers in Australia has slammed a Federal Court appeal decision that found in favour of Mercedes-Benz over dealers unhappy with its move to an agency sales model.
The Federal Court has dismissed an appeal, filed in 2024, against a judgement it handed down in 2023.
In that ruling, where it found in favour of Mercedes-Benz Australia Pacific over a majority (38 of 50) of its franchised dealers, the Court found dealers hadn't been misled about the agency move and that Mercedes-Benz hadn't engaged in unconscionable conduct.
The Australian Automotive Dealer Association (AADA) said it's "bitterly disappointed" by today's decision, particularly as it follows the Supreme Court of Victoria's ruling earlier this year which found General Motors didn't breach its agreement with Australian dealers when it axed the Holden brand in 2020.
Hundreds of new car deals are available through CarExpert right now. Get the experts on your side and score a great deal. Browse now.
It's pushing for the Federal Government to introduce additional protections for automotive franchisees "so that the blueprint created by this court decision is not used by others".
"We welcome the decision of the Full Court of the Federal Court in this matter. Our focus continues to be on delivering luxury products and services for our valued customers around Australia," said a spokesperson for Mercedes-Benz.
At the heart of the original case, which commenced in October 2021, was the compensation Mercedes-Benz offered to dealers, although Justice Beach indicated Australian franchise law may once again need to be revisited and potentially modified.
"Australian dealers have been fighting to stop Mercedes-Benz using their power over franchised dealers to force them into one-sided business relationships. Today's decision is a significant blow to that fight which will have detrimental effects on Australia's franchising sector," said AADA CEO James Voortman.
"In handing down today's decision, there is now a clear need to protect Australian franchisees against unfair treatment from franchisors to arbitrarily change business models with no compensation.
"The presiding Judge in the original court decision clearly articulated the need for further amendments to the Franchising Code to protect the investments dealers make in their businesses.
"Today's decision confirms that current laws in Australia do not adequately protect new car dealers against unfair conduct and particularly are not being supported against unfair decisions being made in head office overseas.
"It is imperative that the Federal Government moves at speed to implement the commitments it made in the election to protect franchisees against unfair contract terms and unfair trading practices."
The move to an agency retail model resulted in Mercedes-Benz taking ownership of dealership stock, and removing the ability for customers and dealership staff to negotiate on prices – a change which dealers claimed would drive up prices of new models.
At the time of the initial court action, the 38 dealers were pursuing approximately $650 million in compensation.
Mercedes-Benz isn't the only auto brand to switch to an agency model in Australia, with Honda also doing the same – also resulting in legal action from some of its dealers.
Like Honda, Mercedes-Benz experienced a sales downturn after the switch in January 2022.
Deliveries of vehicles from its Cars division fell from 28,348 in 2021 to 26,801 in 2022, before dropping again in 2023 to 24,315 and then 19,989 in 2024.
But there's light at the end of the tunnel, it would appear, with deliveries in the first half of 2025 up 15.9 per cent on the same period last year to 11,146 in total – its best first-half of a year since 2023.
MORE: Everything Mercedes-Benz
Content originally sourced from: CarExpert.com.au
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Sydney Morning Herald
6 hours ago
- Sydney Morning Herald
It's a long shot. But Sydney FC should be applauded for having a crack at Thomas Müller
Domestically, the Australian football economy continues to shrink. Club distributions are down from over $3 million per season to an all-time low of $530,000, and so most clubs don't even bother trying to sign big names. It's beyond them, and there is little appetite from club owners to dig their hands even further into their pockets. And when they do, they have to settle for the likes of Douglas Costa, who had already had his run through MLS by the time he washed up at the Sky Blues last season, but has proved to be a worthy signing, or Juan Mata, who was many years past his peak when Western Sydney Wanderers had the chance to grab him - as evidenced by his on-field output. Mata might yet return next season, but if he does, he'll be a luxury add-on for the Wanderers, rather than a key starting player. A-League clubs have largely pivoted towards bringing through academy players - and so they should. They've finally learned how to turn young, homegrown talent into sizeable transfer fees, and flipping kids for cash is the only way they can be sustainable in the long term. It's good for the game, too. It's a shift that is already benefiting the Socceroos and, in turn, will reinforce the A-League's legitimacy as a breeding ground and relevance for the many fans in Australia who follow European football but not the local product. The more that A-League alumni players can reach the top levels, the more it says to the unconverted that our competition is worth keeping a close eye on. But that can't be all that the A-League is, or will be. For one thing, those youngsters need to have hardened pros next to them in the dressing room to learn from. If the A-League was too reliant on experienced players in the past, it now runs the risk of going too far the other way. A careful balance has to be struck. Star power has always been the thing that moves the needle in this country, but it's never been more true than today. As mass culture continues to splinter into a million micro-niches, the need to have something - or someone - with cut-through power is critical. Müller is that sort of someone. And for every player who opts for the megabucks, there might be one per cent of them who are happy to forego those earnings for the glorious Australian lifestyle, of which the appeal to foreigners we sometimes underestimate because we're so lucky to experience it 24/7. Del Piero, don't forget, turned down more money elsewhere - and even a contract offer from Liverpool - because he was so attracted by the wonders of Sydney. Loading To ask the question of Müller is to send a message to the rest of the football world - and to sceptical local fans - that the A-League still has ambition. There's no risk in trying. In fact, the risk is not trying, and never knowing if he might have been the next Del Piero. At worst, you get a polite rejection. At best, you spark the sort of rare moment that can reignite interest in the domestic game, especially at a time when eyeballs are hard to win.
Perth Now
8 hours ago
- Perth Now
REVEALED: Why more WA drivers are switching off safety tech
Silence over safety. That's the surprising choice of West Australian drivers who are switching off their car safety features — such as lane assist technology — because they are too annoying. A new survey reveals that nearly a quarter of WA drivers — or 23 per cent — admitted they had turned off or dialled down their car's safety features, with most (72 per cent) saying noises and lights are distracting in AAMI's survey of Australian motorists. A fifth of drivers claimed they did not need it when driving, and 10 per cent said they did not trust the technology. In another blow to the State's record on merging, the most common device shut down was lane-departure warning or assist technologies — with more than half saying they had hit mute. The technology differs, but ranges from alerts when a car is detected in the next lane while indicating, to corrective actions to maintain a vehicle in the centre of the road. But we are less confident parking, with just four per cent turning off assistance in getting between the white lines in a bay. Almost two thirds accepted the features were making Australian drivers safer. Insurer AAMI's motor prevention manager Mary Kennedy said the car safety features were not just gadgets. 'They're designed to help protect us and make our roads safer. We should be embracing these features, not turning them off,' she said. 'Many of the safety features that drivers are turning off — like collision warning and automatic emergency braking — are really effective at preventing (nose-to-tail) crashes, along with many others including reversing into another vehicle or object such as a trolley or bollard. 'Drivers should understand and use these safety features to enhance their own awareness, reduce the risk of human error, and avoid getting into an accident in the first place.' Motor Trade Association WA general manager membership and industry engagement Graham Cawley said he had heard of cases where drivers had returned the cars to dealerships to have safety features switched off. 'It's commonly reported and known that drivers are actively turning off some of the safety features in vehicles because they can be a little bit intrusive, particularly lane keeper to be an obvious one,' he said. 'We've even had some consumers take vehicles back to the manufacturers or the dealer representatives complaining that the vehicle is pulling to one side, thinking there's something wrong with the steering, but it's actually just that 'lane-keep' function. 'A lot of vehicle drivers will keep to one side of the lane without even realising it, and predominantly that's away from the car that may be next to them or coming in the opposite direction.' Mr Cawley said drivers should keep the safety features on because of the risk of other distractions. Osborne Park Subaru sales consultant Emma Western said customers had spoken to her about other vehicles having distracting safety warnings. 'We do get a lot of people that are looking at other manufacturers that do find that some of them are overdoing it with (safety features), and it is frustrating, annoying,' she said. Emma Western pictured at Suburu Osborne Park. Ian Munro Credit: Ian Munro / The West Australian 'A lot of people complain about things being too much, and it makes the car less safe because they're turning all the features off. 'ANCAP (Australasian New Car Assessment Program) are going to start deducting safety points for the things if they're too intrusive, so it is going to start actually making the cars less safe because of it.' The survey comes as AAMI releases data from crash claims over the 12 months to February, revealing the most common details of our poor driving. Rear-endings remained the State's most common accident, with nearly a third of claims relating to 'nose to tail' crashes, with collisions with stationary objects coming in second, at 27 per cent of claims. A fifth of claims related to damage while the car was parked. Men were the worse driver by gender, making 58 per cent of claims, compared to 42 per cent from women. Drivers aged over 65 claimed the most, making up 17 per cent of insurance applications, compared to just six per cent of drivers under 24. Friday was the worst day of the week for crashes, while during the middle of the day proved the most common time for accidents.
Perth Now
11 hours ago
- Perth Now
New 50-year UK, Aussie military pact signed
Defence and Foreign Ministers from the United Kingdom and Australia have signed a new 50-year military pact designed to underpin Australia's acquisition of nuclear-powered submarines. The deal was signed in Geelong on Saturday, the hometown of Australia's Defence Minister, and dubbed 'The Geelong Treaty'. Officials from Australia and the UK have been forced to voice renewed enthusiasm for the AUKUS agreement, amid a US review of the deal. America's defence and foreign minister-equivalents have not been part of AUKUS meetings in Australia this week. Donald Trump and UK Prime Minster Keir Starmer and expected to meet in Scotland this week. At Geelong on Saturday, Australian Defence Minister Richard Marles said the new pact meant jobs and military security. The Geelong Treaty reaffirms the Australian and UK commitment to getting nuclear powered submarines. Gaye Gerard / NewsWire Credit: News Corp Australia 'It's a treaty which will last for 50 years,' Mr Marles said during a signing ceremony with his UK counterpart. 'It is a bilateral treaty which sits under the trilateral AUKUS framework, itself embodied in a trilateral treaty that was signed that I signed in Washington, DC., in August of last year. 'In doing this, AUKUS will see 20,000 jobs in Australia. It will see, in building submarines in this country, the biggest industrial endeavour in our nation's history, bigger even than the Snowy Hydro scheme,' Mr Marles said. 'In military terms, what it will deliver is the biggest leap in Australia's military capability, really, since the formation of the navy back in 1913.' Alongside Mr Marles, UK Secretary of State for Defence John Healey dubbed the Geelong Treaty a powerful agreement. Australian Defence Minister Richard Marles, right, and UK Secretary of State for Defence John Healey, second from the right, signed the Geelong Treaty on Saturday. NewsWire /Pool / Jeremy Piper Credit: News Corp Australia 'It is a treaty that will support tens of thousands of jobs in both Australia and the UK,' Mr Healey said. 'It is a treaty to build the most advanced, most powerful attack submarines either of our nations have ever had. It is a treaty that will fortify the Indo-Pacific. 'It will strengthen NATO and we're the politicians signing it today; But this is a treaty that will define the relationship between our two nations and safeguard the security of our country for our children and our children's children to come. 'So this is a historic day.' The two ministers have been joined in a series of meetings by Foreign Minster Penny Wong and UK Foreign Secretary David Lammy this week. The treaty signing also comes as the largest British flotilla in 30 years arrives in Darwin, with the HMS Prince of Wales aircraft carrier docking in Darwin on Wednesday. It was the first time a British aircraft carrier visited Australia since 1997, and brought troops to take part in the massive Talisman Sabre exercises, which run annually across northern Queensland and PNG.
