LDV faces ACCC allegations that its ‘durable’ utes and vans were prone to rusting

The consumer watchdog is suing Australasia's largest independent automotive distributor, Ateco Automotive, over allegations that LDV-branded vehicles it had promoted as tough and durable had a propensity to rust or corrode within five years of manufacture.

Ateco, trading as LDV Automotive Australia, is facing Federal Court proceedings for allegedly misleading consumers that the company’s T60 utes and G10 vans were robust enough to be used in a variety of environments and off-road terrains.

The Australian Competition and Consumer Commission (ACCC) has centred its legal action on advertisements published on the LDV website as well as television, radio, Facebook and Instagram, which often portrayed the vehicles on beaches; near lakes, rivers or other pooled water; or on unsealed roads, in dirt or gravel terrain.

The ACCC alleges that the relevant T60 and G10 vehicle models had a “propensity to develop rust or corrosion within the first five years from the date of manufacture, and therefore the advertised LDV vehicles, including those in which rust or corrosion occurred, were not durable and tough”.

The consumer watchdog points to a number of alleged misleading statements in its legal claim, including:

• “The T60 Ute has the tough build and all the robust features needed to take you anywhere, be it work or play”, and;
• “Why take a long walk on the beach when you could take a drive in the LDV T60 Ute?”

The consumer authority alleges that the propensity for the vehicles to rust actually increased if they were used in, near or on certain terrains, which it says made the advertised vehicles unsuitable for use in these locations.

“A new car is a significant financial purchase, and consumers rightfully expect that the vehicle they purchase will live up to the quality and uses that it was advertised to include,” says ACCC chair Gina Cass-Gottlieb.

LDV Australia has acknowledged the ACCC's legal action, but says it is disappointed by the regulator's move after months of negotiations to secure a resolution.

“For 18 months LDV Australia has been engaged in good faith discussions with the Commission in an attempt to resolve its concerns, and to provide remedies to consumers," says LDV Australia general manager Dinesh Chinnappa.

"It is disappointing this process has ended in these legal proceedings. LDV Australia takes its obligations under Australian Consumer Law seriously, and we look forward to defending the ACCC’s allegations in court.”

The Federal Court action relates to advertisements published by LDV between 23 April 2019 and 30 November 2024.

The ACCC says it received more than 5,000 complaints from consumers as far back as January 2018 regarding rust or corrosion in LDV’s T60 and G10 models, usually via LDV dealerships.

Between 2018 to 2024, LDV dealerships are estimated to have sold more than 60,000 T60 and G10 vehicle models, generating more than $1.5 billion in revenue.

The ACCC alleges that LDV was aware as early as April 2019 that rust or corrosion issues were prevalent in the T60 and G10 vehicle models within the first five years of manufacture.

It also alleges that the public representations made by LDV in the case were false or misleading because LDV did not have a reasonable basis to make the representations.

“We allege that despite being aware of the propensity for the vehicles to rust, LDV continued to make representations for a number of years that the T60 and G10 vehicles were durable and suitable for use in a variety of terrains,” says Cass-Gottlieb.

“As a result, we allege that LDV’s conduct is likely to have caused harm to affected consumers, including because the propensity for rust or corrosion lowered the value of their vehicles, and because consumers lost the opportunity to make an informed decision that may have involved purchasing an alternative vehicle that did not carry the same risks.”

The ACCC is seeking penalties, declarations, consumer redress and costs, among other orders.