Mazda has been fined $11.5 million for misleading consumers about serious vehicle faults following a court battle with Australia's consumer watchdog that lasted more than four years.
The Federal Court issued the penalty against the Japanese automaker on Wednesday for making 49 false or misleading statements to nine consumers over serious and recurring faults in their vehicles that occurred within two years of purchase.
The court heard Mazda rejected requests for refunds or replacements for the cars, even though they had undergone multiple unsuccessful repairs and, in one case, three engine replacements.
The Australian Competition and Consumer Commission launched a lawsuit against Mazda over its actions in October 2019, and deputy chair Catriona Lowe said she hoped the substantial fine would be a lesson to all car brands.
"All the consumers were given the run-around by Mazda while it engaged in evasions and subterfuges, provided appalling customer service, and failed to make any genuine attempt to consider and apply the consumer guarantee provisions of the Australian Consumer Law," she said.
"The message to the new car industry is clear: substantial penalties can be imposed on businesses which misrepresent consumer guarantee rights."
The nine consumers involved in the case owned seven vehicles, including a Mazda 2, Mazda 6, Mazda CX-5 and Mazda BT-50 that were purchased between 2013 and 2017.
After multiple attempts to repair the vehicles, the court heard Mazda offered to refund only a portion of the vehicles' purchase price or to replace the cars if the owners made further payments.
But Ms Lowe said consumers who buy cars that cannot be repaired "within a reasonable time or at all" are entitled to a refund or replacement under Australian Consumer Law.
"We expect car manufacturers to honour those rights promptly and without misleading consumers," she said.
The Federal Court also ordered Mazda to pay $82,000 to some of the vehicle owners, and the company pledged to pay an additional $3000 in compensation for each vehicle.
In a statement, Mazda said the company would consider its next steps but would comply with its obligations under consumer laws.
"We are carefully reviewing the court’s decision with a view to determining our response," the statement said.
"Mazda is and has always been committed to ensuring the best possible outcomes for its customers, having regard to their rights under the law."
The car maker also noted it had not been found to have engaged in unconscionable conduct against the consumers, as alleged in the ACCC's original lawsuit.
The Federal Court dismissed allegations of unconscionable conduct in 2021 – a verdict the ACCC appealed in 2022.
Mazda also appealed the court's original decision about misleading conduct but its case was dismissed in 2023.
Mazda is one of the most popular car brands in Australia and sold more than 100,000 new vehicles in the country last year.
