Honda Australia fined $6 million over misleading dealership claims

December 2023: Honda ordered to pay $6 million in penalties of misleading consumers about dealership closures

Honda Australia has been ordered to pay a $6 million fine by the Federal Court, following the ACCC's allegations that the company had mislead customers of three former authorised dealerships.

According to the court's judgement, Honda Australia had told customers of Brighton Automotive Holdings Pty Ltd (Astoria), Tynan Motors Pty Ltd (Tynan), and Buick Holdings Pty Ltd (Burswood) between January and June 2021 that these dealerships would no longer be servicing Honda vehicles.

In its initial filing last year, the ACCC said that while the dealerships were no longer Honda franchisees, "they remained open as independent dealerships and were able to service Honda vehicles".

The communications between Honda Australia and its customers regarding the supposed closures were allegedly held over emails, text messages and phone conversations.

On Friday, ACCC commissioner Liza Carver said: “Honda Australia deprived consumers of the opportunity to make an informed choice about their options for servicing their vehicle. It also caused likely financial loss to the dealerships by the false claim they were closing or had closed.”

“The substantial penalty sends a strong message to all businesses about the consequences for making misleading statements to consumers."

Mike Stevens

April 2022: Honda 'misled customers' during agency model switch – ACCC

Honda is being taken to court by a consumer watchdog for allegedly misleading customers about servicing arrangements when it switched to its new business model last year.

The Australian Competition and Consumer Commissions (ACCC) lodged legal action in the Federal Court today against the carmaker for “making false or misleading representations to consumers” about two former authorised Honda dealerships in Brighton, VIC, and Tynan, NSW.

The ACCC alleges that between January and June 2021, Honda Australia told customers of the two dealerships that they would be closing or had closed and would no longer service Honda vehicles.

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In reality, though the agreements with the two franchisees had been terminated when Honda restructured its business to an agency model, which took effect from July 1 last year, Brighton Automotive Holdings Pty Ltd (Astoria) and Tynan Motors Pty Ltd both continued to trade independently – offering servicing for vehicles including Hondas.

“While Astoria and Tynan were no longer a Honda franchisee, they remained open as independent dealerships and were able to service Honda vehicles,” ACCC Commissioner Liza Carver said today.

The ACCC alleges that in emails, text messages and phone conversations, Honda informed customers the businesses had closed and directed customers to contact a Honda dealership or Honda Service Centre to book their next service.

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“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,” Carver said.

Following a restructure announcement in May 2019, Honda shifted to an ‘agency’ model and terminated 36 of its authorised dealerships’ franchise agreements on June 30 last year. This included Astoria and Tynan who opted to exit in January 2021.

As part of the chanhe, the company now offers a fixed price for each model across the country.

Prior to the split, both franchises had been with Honda for around 50 years.

“We also allege Honda caused harm to the businesses, by falsely claiming they had closed or would close, which may have led customers to have their Honda vehicles serviced elsewhere,” Carver added.

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“It is important that independent dealerships can service vehicles of all brands, and from July 1 dealerships will have fair access to the necessary technical information from all manufacturers to service and repair all makes of cars.”

The Motor Vehicle Service and Repair Information Sharing Scheme, which passed parliament last year, is scheduled to come into effect on July 1, 2022. It requires motor vehicle service and repair information to be made available for purchase by Australian repairers at a fair market price.

Responding to the news, Honda Australia told Wheels: “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.”