Honda has been fined $6 million by the Federal Court for misleading customers about the closure of former dealerships in Perth, Melbourne and Sydney.
The court on Friday accepted accepted arguments by the competition regulator that the Japanese motor giant’s Australian subsidiary breached consumer law by making false and misleading representations to customers after severing links with dealerships in Burswood, Brighton and Bentleigh East in Melbourne, and Sutherland in Sydney.
As part of a restructuring of its Australian franchise network in 2020, the three dealerships were cut loose by Honda but continued to service vehicles.
However, Honda subsequently told customers in emails, texts and phone conversations that the sites had or would close, and would no longer service vehicles, redirecting them to other dealerships still in its network.
The Melbourne and Sydney dealerships had been with Honda for 50 years.
Honda admitted some but not all of the breaches alleged by the Australian Competition and Consumer Commission.
“We took this case because we believed Honda Australia’s conduct harmed the dealerships and their customers,” 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,” Ms Carver said.
“The substantial penalty sends a strong message to all businesses about the consequences for making misleading statements to consumers.”
At the time of the breaches, Burswood Honda was owned by the Japanese-controlled Buick Holdings. It was sold last year, together with the rest of Tokyo-based IDOM’s Australian car retail network to a management consortium headed by a dozen mainly WA dealers.