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Leading Motoring Organisations Considering Merger

Leading Motoring Organisations Considering Merger

The face of vehicle retailing is set to change with the announcement today by leading motor industry groups, the Motor Trade Association (MTA) and Motor Vehicle Dealers Institute (MVDI) of their intention to merge. The combined association, which could have as many as 6,500 members, will become New Zealand’s foremost motor industry organisation. The proposal to merge comes about after extensive discussions between the two organisations and is subject to approval by members. The proposed merged organisation, to be known as the Motor Trade Association (Inc.), will continue to be based out of the MTA’s National Office in Wellington.

This announcement follows the passing into law last week of the Motor Vehicle Sales Act. While the commencement date for the Act is yet to be confirmed, this new legislation removes the mandatory requirement for dealers, or registered motor vehicle traders as they are to become known, to belong to the MVDI from that commencement date. All current MVDI members will have the opportunity to join the MTA. It is proposed that from 1 July 2003, MTA will in turn provide the majority of the functions of MVDI.

Commenting on the proposed merger, MTA CEO Stephen Matthews said, “The environment created by the Act was always going to provide an opportunity that both MTA and MVDI were keen to take advantage of. There were some clear synergies between us and I’m confident that integrating operations will provide numerous benefits for both the public and members including a stronger more credible industry voice, higher operational standards, a more financially robust organisation and greater economies of scale.”

For several years now the MTA has operated a consumer Contact Centre, which gives members and their customers, recourse to address any problems that may arise. Once the new legislation commences, this service will be extended to those MVDI members who have chosen to join the MTA. This means that, in addition to their statutory rights (under the Motor Vehicle Sales Act), the public can be confident that when they buy a vehicle from an MTA member they are buying from a reputable business that operates to the highest ethical standards. Furthermore, as part of the merger, all dealer members will be required to go through a quality assessment process by the middle of next year.

The proposed merger represents a return to the situation as it existed prior to the implementation of the Motor Vehicle Dealers Act in 1975; at that time dealer interests were handled by the then RMTA, the forerunner of the MTA. The merged organisation will have the capacity to represent the interests of all dealers, rather than just specific segments of the market. Following the acceptance of this proposal by members at Special General Meetings, from 1 July 2003 all MVDI members will have the opportunity to join the MTA and will be entitled to enjoy the benefits of the two organisations, including voting rights.

The MVDI functions relating to the Fidelity Fund and support to the Licensing Board will continue as before until such time as they are no longer required under the new Act.

MVDI Executive Director Steve Downes said “We’re hopeful members of both groups will see this merger as an opportunity to both form a strong entity with a common voice and help lift overall standards within the industry. The new Act provides a great opportunity to change the way the industry operates, which will benefit all New Zealanders, and we’re excited about that.”

Members of both organisations will have the opportunity to vote on the proposed merger with the outcome expected to be announced by the middle of June 2003.

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