ACCC completes investigation into Holden's closure

The Australian Competition and Consumer Commission (ACCC)n has concluded its investigation into the closure of Holden in Australia, choosing not to pursue its concerns about the treatment of dealers.

After General Motors announced it would be pulling Holden from Australia before the start of 2021, the ACCC said it received complaints from local dealers claiming Holden had known GM's plan but had continued to establish and acquire new dealerships.

As Holden was removed from the Australian new car market, a large number of local dealers found themselves without a product to sell, with many effectively forced to agree to GM's offer of $1500 compensation per remaining car.

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ACCC chairman Rod Sims said the investigation had found poor conduct by Holden and General Motors, although due to a large number of former dealers currently taking private action against the manufacturer, it would not pursue its concerns.

"Many Holden dealers felt badly let down by Holden and had invested significant amounts of money into the dealerships that would soon stand idle," said Sims.

"We started an investigation into Holden’s conduct towards its franchisee dealerships because Holden’s conduct appeared to be very concerning.

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"While our investigation left us with concerns about Holden’s treatment of some of its dealers, the ACCC has decided not to pursue [them], in large part because any ACCC action may prejudice the private [legal] action taken by dealers.

"This was a difficult decision based on a range of considerations.

"The behaviour by Holden has done much to damage the General Motors brand in Australia, and perhaps beyond.

"The way Holden withdrew from Australia and managed the process and its relationships with long-standing loyal dealerships should serve as a lesson to all franchisors of what not to do in managing their relationships with franchisees and treating them fairly and with respect."

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Australian Automotive Dealer Association (AADA) CEO James Voortman said the ACCC's decision to not take GM to court was in no way a reflection of the manufacturer doing the right thing – rather as an example for other brands not to repeat its mistakes.

“This will be disappointing news for many ex-Holden dealers, but General Motors should not see this as vindication of its actions,” said Voortman.

“The ACCC has by no means endorsed the actions, labelling its treatment of dealers as ‘a lesson to all franchisors of what not to do’ and ‘damaging the General Motors brand’,” he said.

“GM’s actions led the Government to introduce reforms on July 1 this year which would prevent other car manufacturers following [its lead]. These are important reforms for the Australian automotive industry and we will continue to monitor the operation of these laws."

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The ACCC noted it is continuing to assess, "whether Holden’s car servicing arrangements, including [its] decision to end its ‘lifetime’ capped-price servicing program, raise any issues under the Australian Consumer Law."

As reported earlier this year by WhichCar, it is understood former Holden dealers and service centres will soon be renamed under GM's parts brand, ACDelco, potentially ending the existence of the manufacturer in Australia.

At the time, a local spokesperson for GM Australia told WhichCar it had not made the name change compulsory as yet, although it had strongly advised its service fleet to move under the ACDelco banner.