The Motor Trades Association of Australia (MTAA), the peak body for the automotive retail sector, has submitted its pre-budget submission, calling on the Federal Government to implement local solutions to support automotive businesses in an evolving but challenging market.
As global trends reshape the industry, Australian automotive retailers face significant pressures from new emissions standards, electrification, and shifting franchise models. Small business franchisees are particularly vulnerable, with many at risk due to non-renewal of franchise agreements and the growing shift toward agency models imposed by offshore manufacturers.
The New Vehicle Efficiency Standard (NVES) is one of the most pressing challenges. MTAA-commissioned research from automotive intelligence firm Blueflag projects that by 2029, without further adaptation of product offerings, the NVES will impose an industry-wide penalty of $2.8 billion. This cost could be passed onto dealers and consumers. Manufacturers have several options to meet these targets: introducing new low-emission vehicles and technologies, purchasing credits from EV-only manufacturers, increasing vehicle prices, reducing the volume of high-emission vehicles, or exiting the market altogether if unable to comply.
These projections can, and should, continue to improve as car companies modernise their lineups. We have already seen brands like Toyota take decisive action by announcing they will switch their passenger lineup to hybrid engines across all their passenger cars and Ford is bringing to the Australian market a plug-in hybrid ute this year. Car companies have more work to do to keep prices competitive for consumers.
"The federal government cannot control global trends, such as tariffs in the US and EU. However, if a car company is unable to transition to low-emission vehicles but continues to demand that dealers invest millions, only to later inform them that they can no longer deliver competitive vehicles to Australia, it leaves dealers caught in the middle. Dealers often don't know what future products will look like until it's too late to make informed investment decisions. Therefore, we strongly urge the government to take proactive steps to protect local small businesses," said Matt Hobbs, CEO of the MTAA.
MTAA has long advocated for franchising reforms and was disappointed that the recent update to the Franchising Code did not go far enough to protect dealers from growing market pressures and power imbalances. Now is the time to address this issue once and for all.
The power imbalance between offshore car manufacturers and local dealerships is worsening, leaving small businesses vulnerable. As global changes accelerate, small and medium-sized automotive businesses need stronger protections to navigate industry shifts.
"The MTAA is calling on the Federal Government to take immediate action to safeguard the future of Australia's automotive sector before more small businesses are driven out of the market," Hobbs concluded. "We look forward to collaborating with both sides of government to develop practical solutions that support small business, strengthen our industry, and ensure a fair and competitive automotive market."
Download the MTAA Pre-Budget Submission HERE.
Media Contact:
Matt Hobbs, CEO, MTAA
Mobile: 0419 608 845
Email: matt.hobbs@mtaa.com.au
The Motor Trades Association of Australia (MTAA) is the peak body representing the interests of the automotive retail sector across the nation. Through proactive engagement, MTAA helps shape sound public policy on issues that affect the retail motor trades, small businesses and consumers.
MTAA's member associations include the Motor Traders' Association of New South Wales, the Victorian and Tasmanian Automobile Chamber of Commerce, the Motor Trade Association of South Australia and Northern Territory, the Motor Trade Association of Western Australia, and the Motor Trades Association of Queensland.
At the national level, MTAA acts as a unified voice, representing the interests of the automotive sector to the federal government and influencing key policy decisions. Its work includes identifying and addressing issues impacting the sector and advocating for the needs of automotive businesses through ongoing discussions with government.
