Background
Honda Australia is currently facing a lawsuit from its dealerships over its decision to switch to a fixed-price sales model. The move, which was implemented on July 1, 2021, saw Honda Australia head office take ownership of all new car stock, with showrooms receiving a set fee to sell and deliver them to customers at non-negotiable fixed prices.
Dealerships' Claims
The dealerships are claiming that their long-term agreements with Honda Australia have been breached, and are questioning the methods used by the car maker in determining compensation. The lawsuit follows a similar case brought against Mercedes-Benz by its dealerships over a fixed-price sales model, which was rolled out six months after Honda's. The dealerships alleged that they were misled and entitled to compensation by the German car maker.
Deloitte's Involvement
Honda Australia contracted international accounting firm Deloitte to consult on the switch-over. However, dealerships are now accusing Deloitte of using confidential sales information against them to determine the lowest compensation offers. Some dealerships allege that compensation was unfairly based on their worst sales performance, rather than the average.
Deloitte denies the allegations, but it has previously admitted to using flawed sales data when creating modelling for Mercedes-Benz Australia. A Deloitte employee had admitted to using incorrect information at the time, which was then used in presentations to falsely show how much better off financially the dealerships would be.
Despite the striking similarities between the two cases, Deloitte denies any wrongdoing in the Honda case. Three partners from Deloitte's local automotive team left the business for a competitor in 2021 due to the alleged conflict of interest.
Uncertain Outcome
"We are unable to comment on the specific circumstances or details regarding individual dealers, claims or any reference to legal action," a spokesperson for Honda Australia told Drive. "Since introducing the new business model two years ago, our Honda Centres and customers have responded positively to the new Honda Experience."
The outcome of the lawsuit remains uncertain, but it highlights the challenges faced by car makers as they seek to modernize their sales models. While fixed-price sales may offer benefits such as increased transparency and reduced negotiation time, they can also lead to conflicts with dealerships and legal disputes. As car makers continue to innovate in response to changing consumer preferences, it will be important for them to navigate these challenges carefully.
(This article is sourced from drive.com.au and curated by Thetransporteronline24)
