Automotive

Importers must comply with the Road Vehicle Standards Act 2018 (RVSA), which governs the approval, compliance, and registration of imported vehicles. Key requirements include:

• Vehicle Type Approval or concessional pathways (e.g., SEVs Register, RAV approval)
• Compliance with Australian Design Rules (ADRs)
• Registering vehicles on the Road Vehicle Certification System (RVCS)
• Meeting customs, tax, and duty obligations

We assist clients with securing necessary approvals, liaising with homologation experts, ensuring compliance, and managing regulatory risks.

We highly recommend a distribution agreement if you are intending on selling vehicles in Australia or working with local dealerships, as a distribution agreement is crucial to define:

• Territory rights and obligations
• Whether the appointment is exclusive or non-exclusive
• Pricing, payment, and supply terms
• Title and Risk allocation
• Incoterms
• Intellectual Property rights
• Warranty and after-sales service responsibilities
• Compliance with Australian Consumer Law
• Termination and dispute resolution mechanisms
• Governing Law

We help structure, draft, and negotiate distribution agreements to protect your business interests.

If you are a foreign investor (including an overseas company or individual), you may need Foreign Investment Review Board (FIRB) approval before setting up or acquiring a business in Australia. FIRB approval is required if:

• You are acquiring an Australian company, business, or assets valued above the applicable monetary thresholds.
• You are establishing a new business in a sensitive sector, including automotive-related industries if they involve critical infrastructure, data, or technology.
• The business is classified as a national security business, such as vehicle manufacturing involving advanced technologies.
• You are purchasing commercial property above certain thresholds.

Thresholds and Exemptions:

• Different thresholds apply based on the investor’s home country and whether a Free Trade Agreement (FTA) is in place.
• Private investors from Free Trade Agreement (FTA) partner countries generally have higher thresholds.
• Government-linked investors (e.g., state-owned enterprises) must seek FIRB approval regardless of the investment size.

We are able to assist foreign automotive businesses with FIRB applications, structuring investments to comply with Australian regulations, and navigating legal risks in importation, distribution, and franchising.

When establishing a dealer network, importers and distributors must comply with the Franchising Code of Conduct. Key considerations include:

• Drafting compliant dealer agreements
• Providing a Disclosure Document and ensuring compliance with pre-contractual disclosure obligations
• Managing territory rights and exclusivity
• Structuring dealer margins, rebates, and incentive programs
• Ensuring compliance with consumer law and warranty obligations

Our team has extensive experience advising on dealer agreements, franchising obligations, and dispute resolution strategies.

The Franchising Code of Conduct mandates certain clauses be included in dealer agreements and disclosure documents including:

• Compulsory buyback of stock and equipment in certain termination cases
• Compensation requirements if a franchisor exits the market or rationalises the network
• Strict disclosure obligations around capital expenditure and competition restrictions
• Limits on post-term restraints in certain circumstances
• Dispute resolution rights

Baybridge Lawyers is actively assisting clients with updating franchise agreements and disclosure documents to ensure compliance.

Under the ACL, importers and distributors have strict obligations regarding:

• Compulsory consumer guarantees and warranties sold on all new vehicles sold in Australia
• Misleading or deceptive conduct (including advertising and marketing)
• Product recalls and defect management
• Unfair contract terms including those in dealer agreements, small business and consumer agreements

Failure to comply with ACL can result in significant penalties from the ACCC. Our team ensures that your business meets all consumer protection laws while mitigating risks.

Vehicle recalls must be reported to the Department of Infrastructure, Transport, Regional Development, and Communications, and importers must:

• Identify safety defects
• Notify affected consumers and dealers
• Provide remedies such as repairs, replacements, or refunds
• Ensure compliance with the Motor Vehicle Standards Act and Australian Consumer Law

We provide legal guidance on recall procedures, risk management, and regulatory compliance.

Disputes with dealers often arise over contractual breaches, terminations, or performance issues. Options for resolution include:

• Negotiation and mediation (often required under the Franchising Code)
• Litigation in court (if other options fail)

We have extensive experience representing importers and distributors in dealer disputes, ensuring the best commercial outcomes.

Early termination is possible but must be done in accordance with contract terms and the Franchising Code of Conduct. Grounds for termination may include:

• Breach of agreement (failure to meet performance targets, non-compliance)
• Mutual agreement
• Legal grounds (e.g., fraud, insolvency, regulatory breaches)

If termination is not handled correctly, distributors and importers may face litigation and compensation claims. Our team advises on strategic and compliant termination procedures.