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Australian car dealers lose again as court rules in favour of Mercedes-Benz

Australian car dealers lose again as court rules in favour of Mercedes-Benz

Posted on July 9, 2025 By rehan.rafique No Comments on Australian car dealers lose again as court rules in favour of Mercedes-Benz

The head of the peak body for car dealers in Australia has slammed a Federal Court appeal decision that found in favour of Mercedes-Benz over dealers unhappy with its move to an agency sales model.

The Federal Court has dismissed an appeal, filed in 2024, against a judgement it handed down in 2023.

In that ruling, where it found in favour of Mercedes-Benz Australia Pacific over a majority (38 of 50) of its franchised dealers, the Court found dealers hadn’t been misled about the agency move and that Mercedes-Benz hadn’t engaged in unconscionable conduct.

The Australian Automotive Dealer Association (AADA) said it’s “bitterly disappointed” by today’s decision, particularly as it follows the Supreme Court of Victoria’s ruling earlier this year which found General Motors didn’t breach its agreement with Australian dealers when it axed the Holden brand in 2020.

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It’s pushing for the Federal Government to introduce additional protections for automotive franchisees “so that the blueprint created by this court decision is not used by others”.

“We welcome the decision of the Full Court of the Federal Court in this matter. Our focus continues to be on delivering luxury products and services for our valued customers around Australia,” said a spokesperson for Mercedes-Benz.

At the heart of the original case, which commenced in October 2021, was the compensation Mercedes-Benz offered to dealers, although Justice Beach indicated Australian franchise law may once again need to be revisited and potentially modified.

“Australian dealers have been fighting to stop Mercedes-Benz using their power over franchised dealers to force them into one-sided business relationships. Today’s decision is a significant blow to that fight which will have detrimental effects on Australia’s franchising sector,” said AADA CEO James Voortman.

“In handing down today’s decision, there is now a clear need to protect Australian franchisees against unfair treatment from franchisors to arbitrarily change business models with no compensation.