Newsletter No. 26 – 21 June 2017

Speaking last year at a meeting of the Committee for the Economic Development of Australia (CEDA)1 Mr. Rod Sims, Chairman of the Australian Competition and Consumer Commission quoted the following line, generally attributed to the imminent pre-Keynesian economist, Joseph Schumpeter.

“…the way in which we see things can hardly be distinguished
from the way in which we wish to see them…”
 

Schumpeter wrote one of the most widely read, debated and important books ever published on social theory, social sciences and economics entitled Capitalism, Socialism and Democracy.2


Joseph A Schumpeter – 1883-1950

In quoting Schumpeter, Mr. Sims was making the important point that none of us is immune from the risk our personal prejudices and biases bring to any debate. This prism likely distorts reality for us making it more difficult to arrive at the wisest choices when important policy matters are in play.

At AADA, we have been working hard with the ACCC, ASIC and the government on a range of issues that will have significant impact on our business model, once resolved.

In this Newsletter, I want to update you on probably the most important matter we have on the work docket right now. We also need to bear Schumpeter’s comment in mind.

The Industry Agreement on Access to Service and Repair Information

As you know, the ACCC has included a review of the effectiveness of this agreement in its wide-ranging Retail Car Industry Study currently underway and due for completion this year. As we participate in the public debate on this issue, the veracity of Schumpeter’s observation hits home.

The AAAA leads the charge for more widely available low-cost or no-cost access to the entire range of data provided to franchised new car dealers by the manufacturers. This of course reflects the bias of the AAAA and it fellow travelers while ignoring the reality that 90% of all data is already available for low cost.

The OEMs correctly and steadfastly refuse to liberate access to safety, vehicle security and emissions settings – and AADA vehemently supports that stance.

Imagine the consequences of the wide dissemination of these sensitive digital settings.

You don’t have to be John Grisham to be able to write the horror novel that will unfold when criminals find ways to access sensitive codes shared widely in relatively relaxed data control environments outside the franchised networks.

Cyber-crime is at the top of the government’s work list and should be. Wide dissemination of digital vehicle data and codes is inimical to the right consumer and business outcomes.

The other important point is that the intense pressure to cast off the existing agreement brushes aside the mechanism set up within the agreement for the resolution of any systemic failures under the agreement.

There had not been a request for a review under the agreement since February 2016.

Last week, the FCAI triggered such a request. This is the correct path forward rather than the review now being conducted by the ACCC and Minister McCormack and set in motion by Minister O’Dwyer last year at the behest of AAAA.

Getting back to Schumpeter’s point about bias, I reflect on the fact that we are often told by our members that they find ways to work symbiotically and productively with independent repairers. The simple fact is, franchised and independent repairers need each other. This leads to the question of why we have faced a vociferous campaign over the last five years to open the floodgates to our own detriment.

Maybe Schumpeter is right. Maybe those advocating this level of change cannot shake off their innate biases.

On the other hand, maybe it’s more than simple bias sometimes? Perhaps a much darker agenda…?

As ever, I wish you all…

Good luck, and Good Selling!

Kind Regards

Signature

David Blackhall
Chief Executive Officer
Australian Automotive Dealer Association Ltd

1 Committee for Economic Development of Australia, Sydney 23 February 2016
2 Capitalism, Socialism and Democracy, Joseph A Schumpeter, Harper Bros, 1942

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