Chinese car company LDV has removed then reinstated a discount offer on runout models of the LDV T60 ute after pressure from dealers who were faced with having to tell customers the price they signed up to was about to go up.
However, customers who have already placed an order will only receive their LDV T60 utes at the discounted price if the factory can deliver them.
Earlier this week, amid concerns it could not source enough cars out of the Chinese factory, the distributor for LDV vehicles in Australia told dealers in a confidential bulletin “we will not price protect deliveries into June” and brought the end date of the discount offer forward by one month, to 31 May.
LDV advised dealers it is “imperative ... sales staff are aware of the need to sell ... vehicles that are already in dealer stock, (in a) compound, or currently on water.”
A runout offer starting from $28,990 drive-away on the LDV T60 ute proved so popular dealers quickly ran out of stock.
Ongoing production slowdowns – due to the global semiconductor shortage – dramatically reduced the next shipment of vehicles before the offer was originally due to end on June 30.
While car companies can bring forward the end date of promotional campaigns, under Australian Consumer Law they need to honour orders signed at an agreed price.
In response to a query from CarAdvice about the legality of a car company or dealer not honouring a drive-away discount offer – and requiring the customer to pay a higher price after signing an order and placing a deposit – a statement from the Australian Competition and Consumer Commission (ACCC) said: “We are aware of reports that a number of sectors, including the motor vehicle sector, are experiencing shortages of supplies of particular parts due to several issues, including impacts flowing from the COVID-19 pandemic.”
However, the ACCC statement continued: “If a dealer agrees to sell a car for a fixed price but later seeks to increase that price, where the terms and conditions do not allow this, that may be misleading or deceptive conduct in breach of the Australian Consumer Law. Similarly, if a dealer represents that a price is guaranteed, but later seeks to increase that price, that may also be misleading or deceptive.”
If a car company or car dealer tries to increase the cost of a vehicle – after the contract has been signed by the customer at an agreed price – then it “may mean the consumer has a contractual right of action against the dealer”.
Included in the ACCC’s warnings: “Consumers should review the terms of their purchase contract (to make sure the car seller has not allowed a provision for a price increase). Consumers may be able to pursue dispute resolution through their local state or territory tribunal.”
Following feedback from dealers who were concerned about the prospect of having to contact customers and inform them the price would go up if eligible LDV T60 utes could not be delivered before the end of May, representatives for LDV Australia clarified their earlier statement.
“Following feedback from today’s (dealer) meeting, we would like to acknowledge the network’s concerns surrounding the recent changes to the T60 runout campaign,” the latest dealer bulletin says.
The company said it will stand by its decision to pull forward the deadline for the drive-away deal from 30 June 2021 to 31 May 2021.
However, it said it would honour drive-away “runout” deal prices on sales contracts signed by customers before 3 May 2021.
“Accordingly, we advise that if and when the factory recommences production of the current model T60 we will honour contracts signed by customers up to and including May 3, 2021,” the LDV dealer bulletin says.
To ensure dealers don't add any extra orders at the discounted rate after the 3 May 2021 cut-off, LDV has requested proof of all contracts signed prior to this date be sent through for verification.
A statement from the distributors of LDV in Australia said: “It has always been LDV and the Ateco Group’s intention to protect customers from any issues caused by the COVID-19 global pandemic – in this instance supply constraints exacerbated by the global semiconductor shortage.”
The statement clarified that LDV did not want to “promote an offer for vehicles the factory could not supply” and to “ensure dealers didn’t continue to take orders for vehicles they couldn’t guarantee supply of.”
“It is, and has always been, our intention to assist dealers in honouring sale contracts of vehicles they can supply under the campaign parameters,” said the LDV Australia statement. “If and when the factory is able to resume production of vehicles, LDV will fulfil existing customer orders under the communicated campaign pricing structure.”