Eric Louca, Baybridge Commercial (Automotive) Partner, was recently interviewed by Mike Sinclair of the Auto Exec in relation to the application of the Australian Consumer Law (ACL) to the automotive industry, OEM compliance with their ACL obligations, and the potential traps for OEMs new to the Australian market.
The below article highlights some critical areas for automotive brands to be aware of, including:
- Expiry of manufacturer’s warranty is not a basis to deny consumer claims: The manufacturer’s warranty cannot be the reference point for automotive brands in administering consumer claims. Rather, the reference point should be the mandatory consumer guarantees under the ACL.
- Major failure or minor failure:The remedies offered to consumers in accordance with the ACL differ depending on the nature and extent of product issues suffered and on whether such issues give rise to “major failure” at law or are more minor failures capable of prompt remediation.
- Speed matters: Speed matters in addressing product defects, both in terms of avoiding the risk of minor failures turning into major failures and in mitigating exposure to consequential losses and reduction in value damages, noting the continued risk and prevalence of class actions in the automotive space.
- Turning compliance into a competitive advantage: The smartest OEMs don’t treat ACL compliance as a regulatory burden but turn it into a competitive advantage, ensuring that the ACL is integrated into their aftersales teams, customer care teams and dealer networks in a manner that not only ensures compliance but also protects and advances their brand.
- Potential traps for new OEMs:New OEMs entering the Australian market should be aware of potential traps and ensure they have ACL compliance woven into the fabric of their business up front, as the cost of getting it wrong in terms of regulatory action, class action exposure, and brand damage can far exceed the investment required to get it right.
To dive deeper into how compliance can be growth strategy, read the full article of The Auto Exec: The Hidden Cost of Getting Consumer Law Wrong
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