A group of former Holden dealers alleging the brand’s exit from Australia in 2020 breached a contract signed two years earlier have been defeated by General Motors in Supreme Court.
General Motors has won a Supreme Court case brought against it by a group of 11 former Holden dealers, after the judge ruled the US car giant did not breach its agreements with showrooms when it exited Australia in 2020.
The dealers alleged Holden’s exit five years ago breached contracts the car brand signed with each of them in 2018, requiring the supply of vehicles for five years.
It is the conclusion of a case initiated after the group of dealers declined to accept General Motors’ offer of compensation at the time of Holden’s exit in 2020 – reported to be $1500 per car sold in a set period, plus more for showroom upgrades – valued at a combined $150 million.
MORE: Holden dealers sign $150 million compensation deal
The compensation offer was surrounded by controversy at the time, requiring intervention by the Australian Competition and Consumer Commission (ACCC) as GM and the dealers could not agree on the terms of the deal.
The dealers involved in the case are now considering their options after the latest Supreme Court of Victoria decision.
“Today will come as a massive blow to those dealers who have gone through the exhausting and emotional process of taking on a giant multinational car company,” Australian Automotive Dealer Association CEO James Voortman said in a media statement.
“The legal argument successfully put forward by GM that they had no obligation under the Dealer Agreement to supply cars to their retailers is incredibly disappointing and sets a dangerous precedent for the automotive industry.
MORE: Legal misstep costs General Motors millions, as Holden court battle continues
“These dealers upheld their end of the bargain.
“They invested in facilities, employed staff and dedicated their talents to selling Holden vehicles in the communities in which they operate because they were led to believe that the Holden brand was set to stay in Australia for the long haul.”
Drive reported in 2023 that the lead plaintiff in the dealer class action against General Motors – Beecham Holden in Caboolture, Queensland – had already agreed to a settlement with the US car giant.
The settlement has been valued at more than $2 million, more than three times Holden’s original offer, and covers legal costs for all plaintiffs – including the other 10 dealers in the case – up until July 2023.
At a similar time, in 2023 the NSW Supreme Court ruled in favour of a former Sydney-based Holden dealer’s request to view internal GM strategy documents.
He alleged the car giant had been planning an exit from the local market as early as 2015, while making assurances to dealers and the public of its commitment to Australia.
A spokesperson for General Motors in Australia simply said “we welcome the decision” when asked for comment on today’s news.
Earlier this week, the Federal Government announced changes to franchising laws intended to protect Australian dealers from the decisions of global car giants.
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