Automotive Joint Ventures in Australia (2026): ACCC, Franchising Rules and a Drafting Checklist for Dealer Groups

Automotive joint ventures in Australia now operate in a fundamentally different regulatory environment. Since 1 January 2026, the ACCC’s mandatory, suspensory merger-notification regime under the Competition and Consumer Act 2010 means that many dealer-group JV formations and acquisitions must be notified, and cleared, before completion. Layered on top are the 2025 amendments to the Franchising Code of Conduct, which impose new disclosure, capital-expenditure transparency and restraint-of-trade obligations that can catch dealer JV arrangements structured as, or resembling, franchise relationships. This guide sets out the compliance framework, explains how each layer of regulation applies to common dealer-group JV structures, and provides a practical joint venture agreement checklist that deal teams can use before signing.

Key takeaways for deal teams:

• ACCC notification risk is real. Any JV that confers voting power or control over assets in an incorporated dealer business may trigger mandatory notification under the Competition and Consumer (Notification of Acquisitions) Determination 2025. Completion before clearance is prohibited.
• Franchising rules bite harder than expected. If a dealer group JV grants one party the right to operate under the other’s trade mark or system, the arrangement may fall within the Franchising Code, triggering disclosure obligations, specific-purpose-fund rules and restraint-compensation requirements introduced from 1 April 2025.
• Drafting must address both regimes. A fit-for-purpose JV agreement now needs ACCC-cooperation covenants, franchising carve-outs and carefully structured governance, deadlock and exit mechanics.

Why Dealer Groups Use Joint Ventures, Commercial Forms and Examples

A dealer group joint venture allows two or more parties to pool capital, expertise or distribution rights while sharing risk. In Australia’s automotive sector, four JV structures dominate:

• Incorporated JV company (Newco). Parties subscribe for shares in a new proprietary limited company that holds the dealership licence, premises lease and stock. This is the most common form for large multi-site dealer ventures.
• Unincorporated JV. Each party retains ownership of its contributed assets and shares revenue or profit according to a JV agreement, without creating a separate legal entity. Commonly used for short-term co-marketing or shared-showroom arrangements.
• Contractual JV. A supply, distribution or management agreement that allocates roles and rewards but does not pool assets. Often used between an OEM’s Australian subsidiary and a regional dealer network.
• Management JV. One party contributes the dealership operation (staff, systems, premises), the other contributes capital or brand rights, and a management agreement governs day-to-day control.

Examples of Dealer JV Structures

Historically, OEM-dealer JVs have shaped Australia’s automotive distribution landscape. Toyota’s long-standing approach to distribution in Australia involved a cooperative structure with its dealer network, sharing marketing investment and territory planning through contractual frameworks. Similarly, several major dealer groups have used incorporated JV companies to consolidate multi-brand dealership sites in metropolitan areas, pooling real estate, workshop facilities and back-office functions into a jointly owned entity while preserving each party’s separate brand-management responsibilities.

In the used-vehicle and fleet-services space, unincorporated JVs are common. Two dealer groups may agree to share a reconditioning facility, splitting operational costs on a per-vehicle basis without creating a separate company. These structures keep asset ownership separate and avoid the merger-control triggers that incorporated JVs may attract, but they require careful drafting to ensure the arrangement is not re-characterised as a partnership with joint and several liability, a distinction explored below.

ACCC Mandatory Merger-Notification Regime, What Automotive Joint Ventures in Australia Must Know

The most significant regulatory change affecting dealer-group JVs is the mandatory, suspensory merger-notification regime that commenced on 1 January 2026. Under this regime, acquisitions that meet prescribed thresholds must be notified to the ACCC and cannot be completed until clearance is granted or the statutory waiting period expires. The regime is set out in Part IVA of the Competition and Consumer Act 2010 and the Competition and Consumer (Notification of Acquisitions) Determination 2025.

When a JV Is an “Acquisition”, Trigger Tests

Not every JV formation requires ACCC notification. The regime targets acquisitions, defined broadly to include obtaining shares, assets, or any interest that confers voting power or influence over a corporation’s activities. Under the Competition and Consumer Act 2010, an acquisition occurs where a party acquires shares or assets of a body corporate, and this definition extends to JV transactions in several ways:

• Subscribing for shares in an incorporated JV Newco where the subscription confers voting power above the prescribed threshold.
• Transferring an existing dealership business (including goodwill, stock and franchise rights) into a JV entity.
• Acquiring a controlling interest in a competitor dealer’s business through a JV structure, even where the stated purpose is cooperation rather than consolidation.

Importantly, the ACCC has indicated in its merger-reform FAQs that the substance of the transaction, not its label, determines whether notification is required. Calling a transaction a “joint venture” does not exempt it if the economic effect is an acquisition of control.

Notification Thresholds and Exemptions

The Competition and Consumer (Notification of Acquisitions) Determination 2025 prescribes the classes of acquisitions that must be notified. Notification is mandatory where the transaction meets the relevant monetary and market-share thresholds set out in that Determination. The ACCC’s published thresholds guidance provides the current figures and worked examples for different transaction types.

Certain classes of acquisitions are exempt from mandatory notification, including some small-scale transactions and acquisitions in specified circumstances. The Determination also provides for notification waivers, allowing the ACCC to grant a waiver from the obligation to notify where it is satisfied the acquisition is unlikely to substantially lessen competition. The ACCC published interim guidance on the waiver process in December 2025, setting out the information requirements and indicative assessment timeframes.

For dealer groups, the practical question is whether the combined turnover, assets or market position of the JV parties meets the relevant thresholds. In metropolitan and regional automotive markets with limited dealership density, even mid-sized transactions may cross the line.

Suspensory Clearance Consequences and Timeline

The regime is suspensory, meaning the parties must not complete the acquisition until the ACCC has either cleared it or the statutory waiting period has expired without a decision to oppose. The ACCC’s merger-process quick guide outlines a phased review structure. Phase 1 involves an initial assessment period during which the ACCC considers whether the transaction raises competition concerns. If concerns are identified, the review proceeds to a more detailed Phase 2 assessment. Throughout this process, the parties must not implement the transaction.

Failure to comply with the notification obligation or the suspensory requirement exposes the parties to significant penalties under the Competition and Consumer Act 2010, including pecuniary penalties, injunctions and divestiture orders.

Practical Checklist: Pre-Signing Steps to Avoid Forced Remedies

1. Conduct a threshold assessment against the Determination’s prescribed classes before signing heads of agreement.
2. Prepare a clean data room with market-share data, competitive-overlap analysis and customer/territory maps.
3. Consider seeking a notification waiver if the JV clearly does not raise competition concerns, apply early.
4. Build ACCC clearance timing into the transaction timetable: include a condition precedent for regulatory clearance and a long-stop date that accounts for Phase 1 and potential Phase 2 review.
5. Draft standstill obligations prohibiting integration steps (staff transfers, system merges, combined purchasing) before clearance.

Franchising Code Changes and Implications for Automotive Joint Ventures in Australia

The Franchising Code of Conduct, an industry code mandated under the Competition and Consumer Act 2010, was substantially amended with effect from 1 April 2025, with certain additional provisions commencing from 1 November 2025. These changes directly affect dealer-group JVs that contain franchise-like features.

When a Dealer JV Looks Like a Franchise

The Franchising Code applies to franchise agreements, which are defined broadly. A dealer group JV may be caught where one party grants the other the right to carry on a business associated with a trade mark, commercial symbol or marketing system owned or controlled by the grantor, and the grantor exercises significant control over the method of operation. The following indicators suggest a JV arrangement may in substance be a franchise:

• The JV partner operates under the other party’s brand, signage or trade mark.
• The JV agreement prescribes operating methods, customer-service standards, or pricing guidelines.
• One party pays ongoing fees calculated as a percentage of revenue or a fixed licence fee for the right to use the system.
• The arrangement includes territory restrictions that prevent the JV partner from competing or operating outside a defined area.

If these features are present, the arrangement may be a franchise agreement for the purposes of the Code, regardless of whether the parties label it a “joint venture.” The practical consequence is that the full suite of franchising rules joint venture obligations applies, including pre-contractual disclosure, cooling-off rights and dispute-resolution procedures.

Drafting Implications for Franchise-Like JV Terms

The 2025 amendments introduced several new requirements that affect JV drafting:

Deal teams should conduct a franchise-characterisation assessment early, ideally at the heads-of-agreement stage, and, where necessary, structure the JV to either comply with the Franchising Code or genuinely fall outside its scope by ensuring neither party exercises the degree of control that triggers the franchise definition.

Entity Classification, Tax and Regulatory Consequences

Whether a joint venture is a separate legal entity has cascading consequences for taxation, GST registration and regulatory compliance. Australian law does not define “joint venture” as a single legal concept. Instead, the characterisation depends on the structure chosen and the true legal relationship between the parties.

The High Court’s decision in United Dominions Corp Ltd v Brian Pty Ltd [1985] HCA 49 confirmed that a JV may give rise to fiduciary obligations between the parties, and that the distinction between a JV and a partnership depends on the degree of mutual obligation, shared profit/loss and joint control. If a so-called JV is in substance a partnership, each partner is jointly and severally liable for the firm’s debts, an outcome most dealer groups seek to avoid.

For GST and income-tax purposes, the ATO’s ruling in GSTR 2004/2 provides guidance on how joint ventures are treated. An incorporated JV company is a separate entity for all tax purposes, it lodges its own returns, registers for GST independently and pays tax at the corporate rate. An unincorporated JV, by contrast, is not a separate entity; each participant accounts for its share of the JV’s income and claims its share of GST input tax credits in its own returns. A JV that is re-characterised as a partnership has different GST registration and reporting obligations.

Practical Checklist for Structure Choice

• Incorporated JV (Pty Ltd). Suited to long-term, multi-site dealer operations. Separate entity for tax, GST, employment and contracting. Triggers ACCC notification analysis.
• Unit trust JV. Offers distribution flexibility and asset protection. Separate entity for GST; trust returns required. May still trigger ACCC notification if control thresholds are met.
• Unincorporated JV (contractual). No separate entity. Each party reports its share of income/GST. Lower regulatory burden but higher re-characterisation risk (partnership) if not carefully documented.

Key JV Agreement Clauses for Automotive Dealer Groups, The Drafting Checklist

A well-drafted joint venture agreement checklist for dealer groups must address eight core areas. The following clause-by-clause guidance reflects the regulatory environment as at August 2026 and incorporates ACCC notification requirements and franchising code obligations.

Purpose, Scope and Exclusive Territories

Define the JV’s permitted activities, geographic scope and any exclusive territories with precision. Avoid overly broad exclusivity, territory-allocation clauses that prevent either party from competing in adjacent markets may raise competition concerns under the Competition and Consumer Act 2010 and could also trigger the Franchising Code if they resemble territorial franchise grants.

Sample clause concept: “The JV’s business is limited to the retail sale and servicing of [Brand] vehicles within the [defined territory]. Neither party is restricted from engaging in automotive activities outside the defined territory, whether independently or through other arrangements.”

Governance and Decision-Making

JV governance in Australia requires a clear board-composition and decision-rights framework. Specify the number of directors each party appoints, quorum requirements and a list of reserved matters requiring unanimous or super-majority approval (e.g., annual budgets exceeding a threshold, new-site acquisitions, changes to brand representation, related-party transactions). Avoid leaving governance to default Corporations Act provisions, these are rarely suited to a 50:50 or minority-protection scenario.

Voting Thresholds and Deadlock Resolution

Joint venture deadlock provisions are among the most litigated clauses in dealer JVs. A robust escalation mechanism should include:

1. Good-faith negotiation between senior executives (14–28 day window).
2. Mediation by an agreed independent mediator or through a recognised body.
3. Expert determination for valuation or technical disputes.
4. Buy-sell (or “shotgun”) mechanism, one party names a price, the other elects to buy or sell at that price.

Sample clause concept: “If the Board is unable to pass a resolution on a Reserved Matter after two consecutive meetings, either party may invoke the Deadlock Procedure set out in Schedule [X], which shall proceed through Escalation, Mediation and, if unresolved within [90] days, the Buy-Sell Mechanism.”

ACCC-Related Covenants and Notification Cooperation

Given the mandatory notification regime, every dealer-group JV agreement should now include ACCC-cooperation covenants. These should oblige both parties to:

• Provide all information reasonably required for the ACCC notification filing.
• Cooperate with the ACCC during the review process, including responding to information requests within prescribed timeframes.
• Observe standstill obligations, no integration or implementation steps until clearance is obtained or the statutory waiting period expires.
• Allocate responsibility (and cost) for preparing the notification filing.

Franchising Carve-Outs and Compliance Covenants

Where the JV involves the use of a party’s trade mark, brand or operating system, include an express assessment of whether the arrangement falls within the Franchising Code. If it does, build in compliance covenants requiring disclosure-document delivery, specific-purpose-fund governance and restraint-compensation provisions. If the parties conclude the arrangement is not a franchise, record the basis for that conclusion and include a covenant to reassess if the operational structure changes materially.

IP, Branding and OEM Supply Obligations

Dealer JVs commonly depend on OEM brand licences and supply agreements. The JV agreement should address who holds the brand licence, what happens to IP rights on termination, whether the JV can sub-licence, and how OEM-imposed obligations (facility standards, minimum-order quantities, customer-satisfaction benchmarks) flow through to the JV’s operations. Failure to align the JV agreement with the underlying OEM dealer agreement is a frequent source of disputes.

Insolvency and Priority

Insolvency risk in a joint venture demands clear contractual protection. Include:

• Step-in rights allowing the solvent party to assume operational control if the other party (or its holding company) enters voluntary administration, receivership or liquidation.
• Security interests over the insolvent party’s JV shares or assets, registered on the PPSR where applicable.
• Automatic termination triggers on insolvency events, subject to the operation of the Corporations Act 2001 ipso facto stay provisions.

Exit Mechanics, Pre-Emption, Tag/Drag and Valuations

A dealer group JV agreement should include pre-emption rights (right of first refusal on share transfers), tag-along rights (minority can exit on the same terms as a selling majority) and drag-along rights (majority can compel a minority to sell into an approved third-party offer). Specify the valuation methodology, independent expert, agreed formula, or market comparison, and include a dispute-resolution mechanism for valuation disagreements.

Common Drafting Pitfalls and How to Fix Them

• Ambiguous deadlock clauses. Vague references to “good faith negotiation” without defined timelines or escalation steps create paralysis. Fix: prescribe specific periods, escalation tiers and a binding final mechanism (buy-sell or arbitration).
• Ignoring ACCC notification obligations. Assuming the JV is too small to trigger notification without conducting a threshold assessment. Fix: run a threshold analysis against the Determination before signing heads of agreement.
• Mislabelling a franchise as a JV. Structuring an arrangement that grants brand rights, operating-system control and territory exclusivity, all hallmarks of a franchise, but calling it a JV to avoid Code obligations. Fix: conduct a franchise-characterisation audit and comply or restructure.
• No insolvency carve-outs. Relying on general contractual termination rights that may be stayed under ipso facto provisions. Fix: register security interests, draft step-in rights and take independent security outside the JV entity.
• Poor governance structure. Defaulting to Corporations Act replaceable rules in a 50:50 JV. Fix: adopt a comprehensive shareholders’ agreement with reserved matters and clear voting protocols.
• No waiver or consent planning. Failing to address the process for obtaining ACCC waivers, OEM consents or landlord approvals. Fix: include conditions precedent and long-stop dates for all required approvals.
• IP licensing gaps. Not documenting trade mark licences, sub-licensing rights or reversion-on-termination provisions. Fix: schedule all IP rights and align with OEM dealer agreements.
• Non-compliance with Franchising Code restraint rules. Including post-termination non-compete clauses without assessing compensation obligations under the 2025 amendments. Fix: review restraints against Code requirements and budget for compensation if applicable.

If Things Go Wrong: ACCC Queries, Franchise Disputes and Insolvency

Even well-structured automotive joint ventures in Australia can encounter regulatory complications, commercial disputes or financial distress. The response must be swift and structured:

• ACCC query or investigation. If the ACCC contacts the JV parties during or after the notification process, immediately suspend any integration steps that may be in progress. Engage merger-control counsel, preserve all documents and communications, and respond to ACCC information requests within the timeframes specified in the Competition and Consumer Act 2010. If the transaction has not yet been notified, assess urgently whether a retrospective notification or waiver application is required.
• Franchise dispute. Invoke the dispute-resolution mechanism in the Franchising Code (which prescribes mediation through the Office of the Franchising Mediation Adviser) before commencing court proceedings. Review whether the JV agreement’s internal dispute-resolution clause is consistent with Code requirements.
• JV partner insolvency. If a JV partner enters voluntary administration or receivership, exercise step-in rights immediately if available, enforce registered security interests, and seek urgent injunctive relief to preserve JV assets. Review ipso facto stay provisions to understand which contractual rights are and are not enforceable during the administration period. A detailed crisis plan for responding to JV-partner insolvency, including practical steps for dealer groups, warrants dedicated attention.

Checklist: Pre-Signing Action Plan for Dealer Groups

1. Confirm the JV structure (incorporated, unincorporated, contractual or management JV) and document the commercial rationale.
2. Run an ACCC merger-notification threshold assessment against the Competition and Consumer (Notification of Acquisitions) Determination 2025.
3. Conduct a franchise-characterisation audit, does the arrangement fall within the Franchising Code?
4. Obtain ATO and GST structuring advice, confirm entity classification and reporting obligations.
5. Prepare a compliance data room with market-share data, competitive-overlap analysis and financial information for the ACCC filing (if required).
6. Draft the JV agreement with all eight core clause sets: purpose/scope, governance, deadlock, ACCC cooperation, franchising compliance, IP/branding, insolvency and exit.
7. Identify and schedule all conditions precedent: ACCC clearance, OEM consent, landlord consent, FIRB approval (if foreign investment element), financing conditions.
8. Set a realistic long-stop date that accommodates ACCC Phase 1 and potential Phase 2 review periods.
9. Register necessary security interests on the PPSR and execute any ancillary security documents.
10. Engage specialist automotive-JV counsel to review the complete transaction documentation before execution.

Conclusion and Next Steps

Automotive joint ventures in Australia demand a higher level of regulatory and drafting sophistication in 2026 than at any point in the sector’s history. The convergence of the ACCC’s mandatory merger-notification regime, the 2025 Franchising Code amendments and the inherent complexity of multi-party dealer structures means that deal teams can no longer rely on generic JV templates. Every transaction requires a threshold assessment against the Determination, a franchise-characterisation audit, and a purpose-built JV agreement that addresses governance, deadlock, ACCC cooperation, franchising compliance, insolvency and exit. Practitioners assisting dealer groups should use the pre-signing action plan above as a starting framework and adapt it to each transaction’s specific commercial and regulatory profile.

For those seeking specialist guidance on structuring compliant dealer-group JVs, the Global Law Experts lawyer directory provides access to qualified practitioners across Australia.

This article provides general information current as at 11 August 2026. It is not a substitute for legal advice tailored to specific transactions. Parties contemplating automotive joint ventures should seek independent professional guidance on their particular circumstances.

Sources

1. ACCC, Thresholds for Notifying Acquisitions
2. ACCC, Merger Process Quick Guide (PDF)
3. Competition and Consumer (Notification of Acquisitions) Determination 2025
4. Competition and Consumer Act 2010
5. ACCC, Franchising Code of Conduct
6. Australian Taxation Office, GSTR 2004/2 (Joint Ventures and GST)
7. United Dominions Corp Ltd v Brian Pty Ltd [1985] HCA 49 (AustLII)
8. ACCC, Merger Reform Frequently Asked Questions (PDF)