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OFFICIAL PUBLICATION OF AADA NOVEMBER 2019 | ISSUE 29 AADA CONVENTION BIGGER & BOLDER IN 2020 CHALLENGING GOVERNMENT WORKING ON UN-CONSTITUTIONAL AUTOMOTIVE FRANCHISING STAMP DUTY REFORMS GOVERNMENT INTRODUCES ACL MANUFACTURER MANDATORY DATA SHARING INDEMNITY www.automotivedealer.com.au PRINT POST 100019106
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WELCOME Australian Automotive Dealer Association
CONTENTS ISSUE 29 | NOVEMBER 2019
AADA 2020 NATIONAL DEALER CONVENTION & EXPO
AADA Convention Bigger & Bolder In 2020.......................................................................... 4
POLICY
High Court Legal Challenge Seeks To Have Motor Vehicle Stamp Duty
CONTACT AADA Declared Un-Constitutional................................................................................................... 5
Office 6, Level 4, 150 Albert Road
South Melbourne, VIC 3205 Case Studies: Manufacturer Indemnity Under The Australian Consumer Laws............. 6
CONTACT AUTOMOTIVE DEALER Government Working On Automotive Franchising Reforms.............................................. 8
936B Glenhuntly Rd,
Caulfield South, VIC 3162 Government Introduces Mandatory Data Sharing............................................................. 10
Issue No. 29 | DECEMBER 2019 AADA Works On Point-Of-Sale Exemption Changes......................................................... 12
PUBLISHER: AADA Deferred Sales Model For Add-On Insurance?.................................................................. 13
MANAGING EDITOR: Luke Prendergast FEATURES
PRODUCTION MANAGER: Stace Agombar Get Mobile: Carsales Insights Data..................................................................................... 14
CREATIVE DIRECTOR: Nick Murphy
Electric Sales Need A Kick-Start: Report........................................................................... 15
DESIGNER: Shane Fernandes
EV Collaboration Required: US Study................................................................................. 17
ADVERTISING MANAGER: Geoff Vine
geoff@automotivedealer.com.au EV Servicing – What’s The Difference?............................................................................... 18
Mobile: 0413 854 779
New Fast-Charging EV Battery............................................................................................ 19
Phone (03) 9576 9944 | Fax (03) 9576 7277
How Removing Friction Can Help Australian Automotive Businesses
AUTOMOTIVE DEALER
DELIVERY/CHANGE OF ADDRESS Future-Proof Growth............................................................................................................ 20
(03) 9576 9944 or Takata: The Never-Ending Story......................................................................................... 22
editor@automotivedealer.com.au
Stop Disposing And Start Selling – Turn Your Trade-Ins Into Profit................................ 24
EDITORIAL
editor@automotivedealer.com.au Mustang The No 1 News Story Of 2019 .............................................................................. 26
EDITORIAL & ADVERTISING OFFICE How To Be Smart With Your Expenses............................................................................... 29
936B Glenhuntly Rd,
Caulfield South, VIC 3162 New Car Sales Down 9 Percent In October........................................................................ 31
Head Of GM & Ex-PM, Headline NADA 2020...................................................................... 32
Join Us In Beijing For Auto China 2020............................................................................... 33
AADA 2019 NATIONAL DEALER CONVENTION & EXPO WRAP UP
No responsibility is accepted by the publisher
for the accuracy of information contained A Successful Look Into 2020 And Beyond At Convention.................................................. 35
in advertisements in the Automotive Dealer
magazine. Publication of any advertisement does
not constitute endorsement by the publisher
Cooperation The Key To Profitability: Voortman................................................................ 36
of any product, nor warrant its suitability.
Advertisements are published as submitted by Canberra Presence Paying Off: Keating............................................................................. 38
advertisers.
Lessons Learned - Industry Expert Panel Sessions......................................................... 39
COPYRIGHT
No part of this magazine may be reproduced
without the publisher’s written permission.
- Attract More Women, Gender Diversity Panel Says.................................................... 39
CONTRIBUTORS - Customer Focus The Key To F&I Recovery: Panel...................................................... 40
The views expressed in Automotive Dealer by
external contributors and advertisers are not - ROI Is More Than Just Sales: Panel.............................................................................. 41
necessarily those of AADA.
- Dispute Resolution Key To Strong Auto Code: Panel.................................................. 42
AUSTRALIAN
@AADA_ASN AUTOMOTIVE DEALER
ASSOCIATION
WE’D LIKE TO HEAR FROM YOU.
We’d like to hear from you about what’s been supporting junior sporting clubs or sponsoring a It’s a pity that the community work being done
happening at your dealership that you think charity event. by Dealers is a well-kept secret. We intend to
could be worth passing on to our readers. change that. AADA is determined to generate a
We would like to know.
greater respect for new car franchise Dealers
It can be anything from a unique sale, a fleet
Whatever the story you have, it will be good as compassionate business people. Part of our
deal or a story about a member of your staff who
reading. Send us the information and key strategy is to remind the media, politicians and
recently accomplished a notable feat.
contact details and we will follow it up. If you opinion makers that, by employing over 66,000
It could be a ‘feel good’ community initiative have photographs of the endeavour so much people, AADA members make a substantial
you have undertaken involving local schools, the better. contribution to the Australian economy.
AADA 2020 NATIONAL DEALER CONVENTION & EXPO Australian Automotive Dealer Association
AADA CONVENTION AADA 2019 NATIONAL
DEALER CONVENTION &
EXPO WRAP UP FEATURE
SEE PAGES 35-43
BIGGER & BOLDER IN 2020
2020 + Beyond
A vision for car retailers
The AADA 2020 National Dealer Convention AADA will develop a program of workshops, The 2019 Convention & Expo was one of our
& Expo will return to Sydney’s ICC at Darling featured guests, keynote speakers and policy best yet and AADA will strive to produce an
Harbour from 1 to 3 September. sessions to comprehensively cover the myriad even better event next year. See you there!
of issues and challenges facing Dealers now
The billion-dollar ICC Sydney is a world-class and into the future.
business and function facility right in the
heart of Sydney's gorgeous Darling Harbour AADA will make the 2020 Expo the largest
precinct. It last hosted the Convention in 2017. yet, showcasing the latest and greatest products
and services designed to provide dealerships
AADA encourages all Dealers to attend and with the cutting edge.
bring along key members of staff from their
Sales, Service, Aftermarket and Marketing The AADA Expo
departments.
As always, the AADA Expo will showcase
As usual, AADA will put together an all the new products and services designed
outstanding program of compelling and to improve Dealers' bottom lines. Following
inspiring speakers, experts in all aspects the success of 2019’s Expo Open Day, AADA
of dealership operations, marketing, new will repeat an expanded open day line up to
technology and media, business and the world ensure Dealers and their staff have maximum
at large. opportunity to benefit.
AADA 2020 CONVENTION & EXPO ANNOUNCEMENT
01.09.2020 - 03.09.2020 SEPTEMBER
INTERNATIONAL CONVENTION CENTRE SYDNEY
POLICY Australian Automotive Dealer Association
HIGH COURT LEGAL CHALLENGE SEEKS
TO HAVE MOTOR VEHICLE STAMP DUTY
DECLARED UN-CONSTITUTIONAL
two notices of assessment being issued by the motor vehicles in the manner in which it
Evan Stents Commissioner of State Revenue to the claimant has purported to do so;
Lead Partner, alleging that the claimant has underpaid duty
Automotive Industry on the registration of its new motor homes and • there is no proper legal basis for the
Group, HWL 4WD vehicles in the amount of approximately Victorian Government to have received
Ebsworth Lawyers $2.9 million including penalties and interest. It and retained any revenue generated from
is alleged by the Victorian Commissioner that the imposition of stamp duty; and
the claimant paid amounts of motor vehicle
• the Victorian Government is liable to
A
duty for its motorhomes and 4WDs on the
legal battle commenced in the High repay motor vehicle stamp duty paid by
basis of their original unmodified value, prior to
Court in June 2019 has sought to have the claimant.
being converted into motor homes, instead of
certain sections of the Victorian Duties
their increased value as converted. The claimant asserts that a duty of excise, within
Act 2000, which provide for the assessment
and imposition of stamp duty on the sale the conception of that term in section 90 of the
In summary, the Constitutional challenge
and transfer of new motor vehicles, declared Commonwealth Constitution, is a tax upon the
alleges that:
invalid. If successful, the case may also affect production, manufacture, sale or distribution
the validity of luxury car taxes imposed by the • Stamp duty imposed by the Victorian of goods. The basis for the assertion that motor
Victorian and Queensland Governments on State Government upon the application vehicle stamp duty is a ‘duty of excise’ within
the sale of motor vehicles. for registration of a motor vehicle amounts the meaning of section 90 of the Constitution
to a ‘duty of excise’ within the meaning of is that:
The Constitutional challenge has been brought section 90 of the Constitution;
by Tourism Holdings Australia Pty Ltd • The Duties Act 2000 provides that:
(claimant), a business that modifies vehicles into • Under section 90 of the Constitution,
motor homes and then hires out new motor • the authority responsible for registration
the power to impose a ‘duty of excise’
homes and 4WD vehicles to customers under of motor vehicles must not register a
rests solely with the Commonwealth
rental agreements for an agreed term and price. motor vehicle unless duty is paid on the
Government and is not within the power
Its challenge has been brought against the State application (subject to any applicable
of the States; and
of Victoria and the Victorian Commissioner for exemption);
State Revenue (Victorian Commissioner). • Consequently, the claimant alleges that:
• an applicant for registration of a motor
The challenge has been brought following • the Victorian Government never had vehicle must lodge with the application
the power to impose stamp duty on new a statement of the dutiable value of the
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POLICY Australian Automotive Dealer Association
motor vehicle; the production, manufacture, sale or the High Court held that State based tobacco
distribution of goods’ – in other words, licence fees were in fact duties of excise which
• duty is payable by the applicant for a ‘duty of excise’ within the meaning of were beyond the power of the States to levy.
registration; and section 90 of the Constitution.
In its initial response to the claim, the Victorian
• duty becomes payable on the lodging of In addition to seeking orders declaring the Commissioner stated that both he and the
the application for registration; assessment and imposition of stamp duty to State of Victoria expect that most, if not all,
be unconstitutional and legally invalid, the of the States and Territories, and possibly the
• Under the Victorian Road Safety Act 1986,
claimant is seeking an order for the refund of Commonwealth, will seek to intervene in
the motorhomes and 4WD vehicles must
all stamp duty assessed to it in respect of its the case so as to be heard on the question of
be registered in order for them to be used
registration of all new motor vehicles. In the the Constitutional validity of the imposition
lawfully on public roads;
alternative, it seeks a refund of motor vehicle of motor vehicle stamp duty (the Northern
• As a consequence, motor vehicle duty duty payments within the 12 months preceding Territory having already given notice of its
is payable at a point prior to the point at the commencement of legal proceedings. intention to do so).
which the underlying motor vehicle may
The case is very similar to proceedings brought This article was written by Evan Stents - Lead
be lawfully used for the purpose it was
in the late 1990s to challenge the Constitutional Partner, & Christian Teese - Senior Associate,
produced; and
validity of the States imposing 'licence fees' on Automotive Industry Group | HWL Ebsworth
• In further consequence, the motor the sale of tobacco. For example, in the case Lawyers
vehicle duty amounts to a tax ‘upon of Ha & Anor v State of New South Wales,
CASE STUDIES: MANUFACTURER INDEMNITY
UNDER THE AUSTRALIAN CONSUMER LAWS
met for a Dealer to successfully be indemnified Morphy v Beaufort Townsville Pty Ltd &
Vinesh George by the manufacturer: Jaguar Land Rover Australia Pty Ltd (Civil
Company Secretary Claims) [2018] VCAT 1520
and Legal Counsel, • Section 274 of the ACL sets out that
AADA | Principal, a manufacturer of goods is liable to Facts
VS George Lawyers indemnify the supplier who supplies
the goods to a consumer if two In this case the applicant (Morphy) bought
a Range Rover from Beaufort (Dealer).
C
requirements are satisfied.
ompensating a consumer for a The vehicle was imported into Australia by
vehicle that has a major failure can • Firstly, the supplier is liable to pay the second respondent, Jaguar Land Rover
be expensive. Especially if the failure damages under section 259(4) to the Australia Pty Ltd (JLRA). The vehicle had
is unsuccessfully contested in a tribunal, in consumer for loss or damage suffered by a number of issues from delivery including
which case legal expenses will be added to the the consumer. overheating, failing to start on occasion
costs incurred by the Dealer. Fortunately, if and the engine exhibiting excessive carbon
the legal requirements are satisfied, Dealers • Secondly, the manufacturer would be deposits. The vehicle was found not to be
will be indemnified by their manufacturers liable under section 271 to pay damages of acceptable quality and was found to have
for the costs they have incurred. to the consumer for the same loss or suffered a major failure. The consumer was
damage. therefore entitled to reject the vehicle and
The following cases, Morphy v Beaufort receive a refund.
Townsville Pty Ltd & Jaguar Land Rover • Section 259(4) will be satisfied if it can
Australia Pty Ltd and Begovic v Northpark be proven that the Dealer’s failure to Decision
Berwick Investments Pty Ltd & Mitsubishi comply with a consumer guarantee
Motors Australia Pty Ltd offer illustrative made it reasonably foreseeable that VCAT ordered JLRA to compensate the
examples where the dealer has been entitled the consumer would suffer the loss or Dealer for the expense of refunding the vehicle
to indemnification or encouraged to pursue damage as a result of such failure. ($283,000) as well as for the applicant’s and
indemnification from the manufacturer. dealer’s costs in accordance with section 274.
• Section 271(1) will be satisfied if the
Legal Requirements to be met to obtain an guarantee of acceptable quality was Begovic v Northpark Berwick Investments
indemnity from a manufacturer not complied with, thus enabling the Pty Ltd (Civil Claims) [2019] VCAT 772
consumer to recover damages from the
The following legal requirements have to be manufacturer.
POLICY Australian Automotive Dealer Association
Facts consumption was substantially more than did not cross claim against Mitsubishi but
represented by the label and the vehicle failed was encouraged to make a claim against the
In this case, Begovic purchased a 2017 to be fit for its purpose of being more fuel manufacturer.
Triton because he wanted a more fuel efficient. These were considered major failures
efficient vehicle than his previous 2008 by VCAT and Begovic was within his right Although both Dealers and manufacturers
Triton. A fuel consumption label was on the to reject the 2017 Triton for the purposes of may be sued by the consumer over a vehicle
front windscreen of the 2017 Triton prior enforcing a right to refund or replacement. failure, manufacturers will likely be held
to purchase. The information on the fuel As the guarantee of acceptable quality was responsible for the full extent of the liability
consumption label was found to be false not complied with, the tribunal noted that that Dealers incur during proceedings.
and represented the vehicle to be more fuel the Dealer was not prevented by this decision
efficient than it in fact was. Mr Begovic wanted from making a claim against the manufacturer.
a more fuel efficient vehicle than his previous
2008 Mitsubishi Triton and he alleged that he Lessons Learned
would not have purchased the 2017 Triton if
he was aware that the actual fuel consumption Dealers should be aware that they have a
would be higher than both his previous Triton right to indemnification from manufacturers
and the fuel consumption label. when a customer claim against them occurs
as a result of fault from the manufacturer and
Decision ensure that any consumer claim includes a
cross claim against the manufacturer under
VCAT determined that the 2017 Triton’s s274 of the ACL.
fuel consumption was higher than the fuel
consumption label and his previous 2008 In the Morphy case, the Dealer cross claimed
Triton. The tribunal accepted that Mr Begovic and received an award in its favour which
relied on the misleading representation equalled the award made against it in favour of
contained on the label and suffered losses the customer. Accordingly, the Dealer was not
as a result of the increased fuel costs. out of pocket.
Amongst other issues, the vehicle failed
to be of acceptable quality because its fuel In the Begovic case, the Dealer it appears
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POLICY Australian Automotive Dealer Association
GOVERNMENT WORKING ON AUTOMOTIVE
FRANCHISING REFORMS
I
n a video message at the AADA the right thing, but when the few don’t, the Welcome news
Convention, the Minister for Industry, consequences can be significant.”
Science and Technology, Karen Andrews, AADA CEO, James Voortman, welcomed the
confirmed that the Government would be The Government says its reforms will provide Government’s commitment to level the playing
introducing mandatory regulations before for more transparent and cooperative end of field between Australian new car Dealers and
the end of the year to reform franchise term and capital expenditure arrangements. It powerful offshore Manufacturers.
relationships in the automotive sector. says these changes will strike an appropriate
balance between the concerns raised by “The existence of a power imbalance has been
The AADA is working with the Government new car Dealers and the flexibility car clearly demonstrated through various inquiries
to ensure that, among other things, the Manufacturers require to manage their and reviews and the announcement that there
regulation will cover: dealership networks. will be reforms to automotive franchising
arrangements is a significant step in the right
• alternative distribution models, such as The Government has also established an direction,” he said.
an Agency model inter-agency Franchising Taskforce to carefully
consider the Parliamentary Joint Committee’s “These reforms will address end-of-term and
• a direct link between investment made Fairness in Franchising report. The Committee capital expenditure arrangements, which are
by a Dealer and the length of the Dealer considered broader reforms across the key issues that have been raised regularly
Agreement franchising sector. by our members. We will also be urging the
Government to address issues of tenure and
• requiring OEMs to buy back stock, Minister for Employment, Skills, Small and consumer law issues.”
parts and tools in the event of a non- Family Business, Michaelia Cash, said the
renewal Government was committed to helping Mr Voortman assured Dealers that AADA
Australian small and family businesses, would work closely with Ministers Andrews
• a framework for warranty and ACL and Cash, the Department of Industry,
including those in the franchising sector, to
claims Innovation and Science, and other industry
grow and prosper.
participants to make sure that the reforms
• protections for Dealers against unfair
"The franchise sector has been a powerhouse, were implemented.
contract terms, and
helping to drive economic growth in this
country for many years. We know that when “The AADA has worked tirelessly to develop
• a better dispute resolution mechanism.
they are supported more jobs are created for broad support for industry-specific protections
Minister Andrews said a range of reforms to hardworking Australians,” Senator Cash said. for franchised new car Dealers, and the
automotive franchising arrangements will be Minister’s announcement today represents
considered after consultation with the public “There are over 1,300 franchisors operating significant progress,” he said.
as well as the industry. in Australia and around 97,000 franchisees,
predominantly made up of small and “Reform in the Automotive retailing sector
“We have heard the concerns of those within family businesses. They make a significant enjoys the support of the Government, the
the sector and are committed to creating a contribution to the economy, with revenue in Opposition, the Small Business and Family
level playing field. It’s about ensuring everyone excess of $182 billion dollars and employ over Enterprise Ombudsman, the Franchising
gets a fair go, including our small and family 594,000 people." Council of Australia and most bodies in the
car Dealers,” she said. Automotive sector.”
The Government will continue to consult
“Most players in the sector are already doing industry on draft automotive regulations in the
coming months.
8 | NOVEMBER 2019 | automotivedealer.com.au
POLICY Australian Automotive Dealer Association
GOVERNMENT
INTRODUCES
MANDATORY
DATA SHARING
I
n a move that has ramifications for service Minister Sukkar for his leadership on this
departments across the country, the matter,” AADA CEO, James Voortman said.
Australian Government has announced it
will introduce a mandatory data sharing law “The AADA maintains its support for a
for service and repair information. regulatory approach to information sharing,
provided it is done on fair and reasonable
The government announced its decision commercial terms and allows for the secure
“MTAA congratulates Minister Sukkar on his
during a specially convened meeting between release of sensitive information such as
leadership in finalising Government’s response
peak automotive bodies with Federal Assistant that used on safety, security and emissions
to this critical issue and in addressing a
Treasurer, the Hon. Michael Sukkar MP, and systems.”
recommendation of the ACCC for a mandated
Treasury Department officials in Melbourne at
“There is still much detail to be developed and prescribed scheme,” Mr Dudley said.
the end of October.
and we look forward to working with
As well as AADA, VACC, and MTAA, the
A mandatory data sharing law will ensure the Government and the other industry
other peak automotive organisations involved
independent workshops have access to motor participants to arrive at a workable solution.”
in the process were the Australian Automotive
vehicle service and repair information at a
The Motor Trades Association of Australia Aftermarket Association, Federal Chamber
fair price. This law will provide a level playing
(MTAA) also welcomed the announcement. of Automotive Industries, and Australian
field in the sector and allow consumers to have
MTAA CEO Richard Dudley said the MTAA Automobile Association.
their vehicle safely repaired by the repairer of
their choice. and its members had arranged business and
“The AADA will continue to work with the
workshop visits for many Parliamentarians
Government, Departmental officials and
“We welcome the Government’s and stakeholders and engaged experts from
the industry association involved to ensure
announcement that it will develop legislation the United States in preparing a draft Code
the best possible outcome is reached for
to regulate the sharing of service and of Conduct to guide further discussions and
members,” Mr Voortman said.
maintenance information, and commend analysis of international jurisdictions.
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AADA WORKS ON POINT-OF-SALE
EXEMPTION CHANGES
T
he AADA has been working with provides members with an infographic and the Point-of-Sale Exemption, introduced as
the Australian Finance Industry talking points enabling them to speak or write an interim measure in 2009/10, as part of the
Association (AFIA) on the to their local MP. National Consumer Credit Protection reforms.
Government’s decision to abolish the Point-
of-Sale exemption. Meanwhile, the Australian Retailers “Why short-change the service currently
Association (ARA), have that if a proposal offered at retail level? At the end of the day it
Federal Treasurer Josh Frydenberg has outlined in The Royal Commission into is the finance company which is the licence
indicated that legislation will be prepared by 1 Misconduct in the Banking, Superannuation holder of the entity responsible for any
July 2020. and Financial Services Industry Final Report breaches against regulations,” Mr Zimmerman
– also known as the Hayne Report – goes said.
AADA/AFIA have commissioned research by ahead without proper consultation with the
Deloitte which demonstrates the importance automotive and retail sales industry then it will “The implementation of this recommendation
of F&I income to dealerships, particularly be consumers who will be negatively impacted. would result in a red-tape disaster for both
during a period in which sales volumes are retailers and government.”
declining. It says that transparent consultation from
Treasury and ASIC before any measures are Having welcomed the establishment of
“Our members are doing it tough at the put in place, as well as a guarantee that existing the commission, following revelations of
moment, and the AFIA study reflected Point-of-Sale Exemptions will be maintained, misconduct within several Australian financial
this. It found that the overall profitability of is the right move for Government and institutions, the ARA has now called for a
automotive Dealers between 1 July 2018 and consumers. thorough and practical approach to findings.
30 April 2019 was 50 per cent less than a year
previously” said Mr Voortman. If the recommendation to remove of Point-
of-Sale exemption – is adopted, any costs
“35 per cent of customers use finance from a incurred will likely flow on to consumers.
Dealer, and that income makes a significant
contribution to the Dealers staying viable Recommendation 1.7 would essentially see
while providing their customers with a retail vehicle Dealers acting as brokers for loan
convenient competitive finance option. We are applications and, therefore, would be required
really concerned that removing the Point-of- to hold an Australian Credit Licence and
Sale Exemption will have drastic consequences comply with the National Consumer Credit
for the viability of many of our members, Protection Act.
particularly the smaller, family owned
operators in regional and rural Australia”. ARA Executive Director, Russell Zimmerman,
said ARA was seeking a positive commitment
AADA has sent Dealers a bulletin that from Government that it would not abolish
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DEFERRED SALES MODEL FOR
ADD-ON INSURANCE?
T
he Australian Securities and The new ASIC powers allow the corporate and timely way. But there are also important
Investments Commission (ASIC) is regulator to intervene and take temporary checks and balances – it is a temporary
proposing the introduction of a deferred action where financial and credit products intervention power and we must consult
sales model as a means of regulating the have resulted in or are likely to result in before each and every use,” she said.
sale of add-on insurance and warranties by significant consumer detriment. The range of
caryard intermediaries. temporary actions include banning a product Investigations are continuing into other
or product feature, imposing sale restrictions, matters stemming from the Hayne Royal
ASIC had previously flagged the concept and, and amending product information or choice Commission, with "a very large pipeline of
after three and a half years of scrutiny, has architecture. investigations and enforcement action under
now formally released its proposal for using its way".
product intervention powers. To aid the process ASIC released “Consultation
Paper 313 Product intervention power”, which "In many of those referrals and case studies
The proposal would see a four-day period provides case studies of past products and from the Royal Commission, we saw that
introduced after a consumer has made the practices to illustrate the circumstances in an over-reliance on disclosure in some ways
decision to purchase a vehicle. The customer which ASIC may have contemplated using proved an enabler for the poor conduct and
would also have to be provided with online the product intervention power (had it been poor consumer outcomes," Ms Chester said.
information before making the purchase. available) to address consumer detriment
“The product intervention power is not a new
identified at the time.
ASIC is also proposing that mechanical risk concept. Australia is joining regulators in
products on new cars should be prohibited Other possible measures on which ASIC other jurisdictions with product intervention
where the manufacturer’s warranty still has is consulting include supplementary powers like the US, UK, the EU, Hong Kong
more than 12 months’ cover. requirements such as ‘knock-out’ questions to and Taiwan.”
bar sales where a product has little to no value,
ASIC sought public input, with submissions The power is unique in its focus on reducing
as well as preventing the sale of warranties that
due by 12 November and the AADA has significant detriment to consumers, rather
provide low levels of cover.
submitted its response. than stepping in only after a breach of the law.
ASIC would also monitor the impact of its ASIC can also use the power on a market-wide
James Voortman, the CEO of the AADA basis to address industry-wide problems. ASIC
intervention orders.
commented that the ASIC Consultation Paper is required to consult before making a product
was somewhat problematic. ASIC commissioner, Sean Hughes, said there intervention order.
had been a history of unfair conduct and poor
“It is unclear to us why ASIC has singled “ASIC having this power was recommended
results for consumers in the add-on insurance
out automotive add-on insurance for special by the 2014 Financial System Inquiry,
market.
attention, given that Treasury has recently put supported by the Financial Services Royal
forward sweeping proposals for the whole of “We have seen policies sold to consumers Commission, consulted on and agreed to by
the add-on insurance market,” he said. when they have been ineligible to claim under the Government, and received overwhelming
them. ASIC has secured over $130 million in support across the Parliament in April this
“We understand their concerns about
refunds to compensate consumers for their year,” Ms Chester said.
consumer detriment, but as they note in their
losses from these practices,” he said.
paper, this is largely a product of poor product The product intervention power was enacted
design rather than the sales channel through “As well as compensation for past conduct we in April 2019 with new design and distribution
which it’s sold,” he said. are proposing changes to improve consumer obligations and is available for the regulator
outcomes in the future.” to use now. The design and distribution
“We are also puzzled by their references to
obligations do not apply to industry until April
Dealer warranties, which are not even financial Announcing the consultation, ASIC Deputy 2021.
products, yet ASIC wishes to include them in Chair, Karen Chester, said the product
the deferred sales model, ” he said. intervention power was “an incredibly ASIC recently levelled 87 criminal charges
important addition to ASIC’s regulatory at the Commonwealth Bank insurance
Mr Voortman is looking forward to addressing
toolkit”. arm CommInsure in relation to breaches
those concerns directly with ASIC through the
on ‘hawking’ laws in the selling of financial
consultation process going forward. “ASIC can now step in and respond to products.
significant consumer detriment in a targeted
automotivedealer.com.au | NOVEMBER 2019 | 13FEATURES Australian Automotive Dealer Association
GET MOBILE: CARSALES INSIGHTS DATA
T
he latest Carsales market watch report stop the buyer turning to a competitor.” Prestige buyers sort more by Price
highlights the key consumer search
trends, which include sunroofs and slow The statistics highlight the importance of Differences in sort behaviour become clear
follow-ups. prompt responses to enquiries. Fifteen percent when comparing mainstream and prestige
of Carsales enquiries are converted to a sale brands. There’s no doubt that Australians
As well as mobile browsing, the report says within 24 hours, yet a quarter of enquiries are keen to assess their ability to purchase a
25% of enquiries come via text messaging; go unanswered in those vital first 24 hours. prestige car by sorting search results by ‘Price’
30% of enquiries are still made over the phone, This further emphasises the importance of options.
while 42% use email. automated responses when the dealership is
closed. Buyers searching for prestige cars sorted
“Buyers are increasingly turning to their search results by ‘Price (Low to High)’ and
mobile during the car buying journey,” the The data shows that ‘sunroof ’ was the most ‘Price (High to Low)’ to a greater extent
report reads. searched for keyword, prompting Carsales than mainstream brand buyers. Audi, BMW,
to advise Dealers to promote the feature via Infiniti, Lotus, Maserati, Mercedes-Benz and
“Ensure that you have strategies in place to their photography, descriptive comments and Porsche buyers were more likely than average
provide customer service when your business promotional material. to sort search results by ‘Price (Low to High)’.
is closed.” Aston Martin, Ferrari, Lamborghini, McLaren
Most buyers do nothing and Rolls Royce buyers were more likely than
Above all, consumers are demonstrating that
average to sort search results by ‘Price (High
they want convenience, which means the Contrary to popular perception, 52.9% of
to Low)’.
ability to research and shop any time they searches were not sorted and buyers viewed
desire, not just when dealerships are open. their results in the default ‘Featured’ view. Tesla searches ranked sixth for use of ‘Price
(Low to High)’ and seventh for ‘Price (High
“Half of buyer enquiries now occur outside Just 27.9% of search results were sorted from
to Low)’.
of traditional 9am–5pm business hours,” the the default ‘Featured’ format to ‘Price (Low to
report says. High)’, and 6.8% to ‘Price (High to Low)’. Demand for vintage
“Engaging a buyer with prompt follow-up or Less than 25% of searches on Isuzu, Toyota, Alfa Romeo, MG, Fiat, Citroen and Porsche
an auto response to their enquiry not only Holden and Ford cars were sorted from the were amongst the brands with much higher
helps them feel immediately acknowledged default ‘Featured’ format to ‘Price (Low to High)’. than average sorting by ‘Year (Low to High)’,
and excited to set up an appointment, but can indicating a greater demand for vintage models.
14 | NOVEMBER 2019 | automotivedealer.com.auFEATURES Australian Automotive Dealer Association
ELECTRIC SALES NEED A KICK-START: REPORT
A
new report has called for greater The report declared that three issues must $45K plus on road costs, while a Nissan
education and infrastructure around be resolved in order to kick the automotive Leaf costs around $50K. It is, therefore,
electric vehicles (EVs) as sales in industry into gear regarding EVs. They are: no surprise that luxury car buyers are
Australia lag behind those in other countries. driving electric vehicle sales, as they
• Education and awareness – With only can afford to pay the premium.
The study, undertaken by Nielsen and released 16 percent of people believing they are
in late October, reveals that while electric adequately informed about electric • Vehicle range and infrastructure – As
vehicle sales in Australia reached an all-time vehicles, there is a real opportunity many as 47 percent of people believe
high in 2018, the number is still very low for the automotive industry to educate electric vehicles can only travel
compared to other markets. Only 1,352 EVs them regarding the unique benefits 100-300 kms before recharging. Yet,
were sold in Australia compared to 1.2 million of electric vehicles. There are mixed despite most people claiming to drive
in China, 360,000 in the US and 3,682 in New results when it comes to awareness less than 80kms a day, the dangers of
Zealand. of brands offering electric cars – 16 running out of charge on long road
percent of respondents called out Tesla, trips is a major deterrent to purchase.
The Electric Vehicle Council revealed in 11 percent Toyota and 5 percent BMW, Furthermore, 77 percent of Australians
August there were 90 percent more EVs sold Nissan and Hyundai. Interestingly, say the lack of public infrastructure
in the first half of 2019 compared to the same when asked to select a brand they is another key deterrent. This is
period in 2018, despite national petrol vehicle thought sold electric vehicles in demonstrated by the fact that there are
sales falling 8.4 percent in the same timeframe. Australia, 23 percent selected brands only 800 charging stations in Australia
which don’t and 12 percent reported no compared to more than 6,000 petrol
Business fleets continued to be the largest
manufacturers sell these types of cars stations.
buyer of EVs in 2018, accounting for 63
in Australia.
percent of total sales. Private purchases made Michael Brown, Automotive Lead, Nielsen,
up 33 percent, with government fleets buying • Perceived value – 79 percent of said that while the adoption rate is lower than
only 4 percent. Australians said price was the key in other markets, Australians’ concern for the
factor to entice them to purchase environment was growing rapidly.
To better understand what’s holding back
an electric vehicle. As many as 50
electric vehicle sales in Australia, Nielsen “We hope this highlights areas for the
percent said they would pay only $20-
interviewed 10 senior automotive marketers, government and automotive industry to drive
$30K. This is a major barrier to sales
1,000 Australians, 18+ car owners, and change to better our environment,” he said.
considering vehicles at the lower end,
reviewed attitudinal and behavioural views.
such as a Hyundai IONIQ retail from
automotivedealer.com.au | NOVEMBER 2019 | 15FEATURES Australian Automotive Dealer Association
Half the survey respondents said they had than 50 percent cheaper than EVs currently at The report describes the current state of EVs
no intention to purchase an electric vehicle; the lower end of the market. Hyundai IONIQ in Australia as a Catch-22 situation.
however, the report claims there is still an currently retails from $45,000 plus on-road
opportunity to ensure marketers are reaching costs, while a Nissan Leaf costs approximately “The lack of recharging stations and
the one-in-three high income responders who $50,000. At the other end of the scale, the Tesla infrastructure discourages electric vehicle
said they would. X retails from $150,000. buyers. Without consumers’ intention to
purchase, the government will not prioritise
“Electric vehicle intenders say they want a car Other factors: to build what’s needed. For electric vehicles
that is an expression of themselves and are not to take off, either the government must
brand loyal with car choice. They are strongly • Infrastructure – 77 percent step in and improve the infrastructure or
influenced by word-of-mouth and they’re 2.5 • Charging Cost – 74 percent manufacturers have to find new ways to offer
times more likely to pay for extras, especially • Safety – 74 percent alternative ways of recharging. Innovative
when it comes to cars with appealing exterior charging solutions could include wireless
• Driving Range – 70 percent
and interior design. They want a car that has charging pads in parking lots, wireless
clever storage compartments and good luggage • After Sales – 69 percent charging under roadways and solar roofs,” the
capacity to suit their hobbies, and they prefer • Performance – 54 percent report says.
AWD to 4WD,” the report says. • Resale – 54 percent
“Electric vehicle sales will increase, but further
EV buyer profiles: “The affordability and availability of cheaper education and awareness around the features,
electric vehicles in Australia will no doubt performance, safety and technology need
• Young families and couples to be addressed. Additionally, Government
change over time, as technology and
• Under 45 years old economies of scale improve and competition investment in infrastructure is also urgently
• 42 percent use the car to commute to increases,” the report says. required. Levels of intention, consideration
work every day and purchase will likely rise significantly when
“For instance, a new electric vehicle in the incentives are provided to install public and
• Adventurous and like to socialise
more mature market for electric vehicles of private charging stations, and some form
• Prefer hobbies that require equipment, China currently costs less than $20K.” of subsidy or tax credit is offered to reduce
e.g. cycling, surfing purchase cost.”
• Interests include food, drinks, cooking, Range and infrastructure
cuisine, fashion, shopping, health & The report suggested companies incentivise
fitness After price, the next biggest hurdles in the consumers with such innovations as special
adoption of electric vehicles are perceptions electric vehicle charging rates that are lower
• Live in metro areas around range and infrastructure. As many as than household electricity costs and/or lower
• Twice as likely as the general 47 percent of people believe electric vehicles rates during off-peak times.
population to be trend setters – have a can only travel 100-300 kilometres before
strong desire to be different from others recharging. Yet, while most people claim to With countries around the world increasingly
• 78 percent more likely to drive their drive less than 80 kms a day, the dangers of setting timeframes for sunsetting internal
kids around every day. running out of charge on long road trips is a combustion engines, the report’s authors
major deterrent to purchase. describe EVs as possibly the biggest game-
The survey found that, overall, Australians do changer since the introduction of the first
not feel informed about electric vehicles. Furthermore, more than three-in-four (77 automobile itself.
percent) say lack of public infrastructure is
“This provides an opportunity for automotive another key deterrent. This is demonstrated “Investment in research and development
brands to appeal to the 24 percent of people by the fact that there are only 800 charging must be encouraged to produce the
who said they intend to purchase an electric stations in Australia compared to over 6,000 technological innovations to continually
vehicle,” the report points out. petrol stations. Charging times can also vary improve electric cars,” the report concludes.
significantly from 15 minutes using a high-
“Only 16 percent of people believing they are speed charger to 100kw 54 minutes for an 80 “It is evident that Australians feel electric
informed, compared with 60 percent believing percent charge. The most common are 50kw vehicles should reflect their lifestyles, budget,
that they are not, and 24 percent who just chargers – 80 percent charge in 75 minutes tastes and, most of all, themselves. Therefore,
aren’t sure.” and your normal household socket – 28 hours to avoid homogenisation, brands need to find
for 100% charge. ways to differentiate the performance factors
Respondents were most aware of Tesla (16 and promote strong unique brand attributes,
percent) as an EV producer, followed by In August this year, the Australian Renewable philosophies and ideologies for this new class
Toyota (11 percent), and BMW, Nissan and Energy Agency announced a $15 million of car.”
Hyundai (5 percent). investment in infrastructure featuring 42
new sites on highways connecting Adelaide, The federal government is developing the
Price the key factor National Electric Vehicle Strategy to be
Melbourne, Canberra, Sydney and Brisbane,
as well as new charging stations in Perth, finalised by mid next year to address barriers
When asked which factors would influence to EV uptake.
them to buy an electric vehicle, 79 percent of Tasmania and Far North Queensland.
respondents cited price as the key factor, with
Each of the sites will be powered by renewable
up to 50 percent saying they would only pay
energy and feature charging for two cars
between $20,000 and $30,000, which is more
concurrently.FEATURES Australian Automotive Dealer Association
EV COLLABORATION REQUIRED: US STUDY
A
US study conducted by Cox automakers to ensure preparedness to sell and vehicles was closer than most people thought –
Automotive has concluded that service EVs, while greater public charging and was getting closer.
collaboration between Dealers and infrastructure was seen as critical to increase
automakers is the key to widespread adoption EV penetration. “In tracking average transaction price, EV
of EVs. pricing has only minimally increased in the
“One third of Dealers pointed to the lack of last seven years, while pricing for new internal
The Cox Automotive Evolution of Mobility: OEM sales and marketing support and poor combustion engine vehicles has spiked almost
The Path to Electric Vehicle Adoption Study sales training as a challenge,” the report said. 19 percent,” the report said.
reports that, without collaboration between
the two groups, clearing up the common “Among Dealers who are receiving support, “EVs could become even more attractive and
misconceptions facing electric vehicles (EV) only one-third of them find it helpful. affordable with the application of new rebates
could delay widespread adoption. Additionally, only nine percent of Dealers feel and other EV-focused purchasing incentives.”
OEMs are exerting pressure to hit certain EV
Almost 100 new electrified models are sales targets, decreasing the urgency for the Almost all EV considerers (98 percent) believe
scheduled to arrive on the US market over the dealership.” it is less expensive to own an EV, with 65
next few years. percent thinking there are cost savings to fuel/
The study did find, however, that “with the charging and 54 percent thinking there are
Cox Automotive surveyed 2,503 consumers right education and technology in place”, EVs cost savings to maintenance.
– divided into EV Owners, EV Considerers had a bright future.
and EV Non-Considerers – as well as 308 “Consumer awareness and consideration are
franchised Dealers. The aim was to explore the Cost and battery remain the biggest consumer likely to rise with more inventory, more variety
gap between consumers’ and Dealers’ barriers and Dealer barriers to EV adoption. More and affordability coming to the EV category in
and expectations with current EV realities in than three quarters (77 percent) of those the next several years,” the report said.
the US. considering buying an EV, and 87 percent of
those who weren’t, believed the initial costs “With these new models, consumers are also
The study found that US Dealers do not feel for EVs were “somewhat or much more” than hoping for more performance and technology,
a sense of urgency to sell EVs due to a lack of internal combustion engine vehicles. particularly around autonomous and safety
inventory levels, perceived profits and OEM features.”
support. Dealers said they needed more However, Cox reported that the difference in
education, marketing and sales support from price between EVs and petrol/diesel-powered
automotivedealer.com.au | NOVEMBER 2019 | 17FEATURES Australian Automotive Dealer Association
EV SERVICING – WHAT’S THE DIFFERENCE?
The fewer moving parts a car has, the fewer What’s different about an electric service?
Petrol (Flexible Servicing)
things can go wrong. Electric vehicles (EVs)
have fewer moving parts than conventional A 2018 UK study by automotive data experts Up to 18,000 miles (29,000km) /
Oil change
petrol or diesel cars, which makes them Cap HPI investigated the average servicing and 24 months
simpler to service. maintenance costs for electric cars. It shows
Inspection
that the cost to customers of servicing EVs service with oil 18,000 miles (29,000km) / 24 months
Maintenance needs and safety requirements is, on average, 23 percent less than for petrol (excluding electric)
for hybrid electric vehicles (HEVs) and vehicles over a three-year/100,000-kilometre Inspection service Up to 36,000 miles (58,000km) /
plug-in hybrid electric vehicles (PHEVs) period. For smaller cars this difference is even extended with oil 36 months, then every 36,000 miles
(excluding electric) (58,000km) or 24 months
are similar to those of conventional vehicles, more pronounced.
while all-electric vehicles (EVs) require less
maintenance. Manufacturers designing EVs When an EV is brought in for a service it is Diesel (flexible servicing)
publish maintenance and safety guides. checked for all the usual service items and legal
Up to 18,000 miles (29,000km) /
requirements of a roadworthy car, such as wear Oil change 24 months
Maintenance comparison on the braking system, headlights and tyre
condition. When servicing EVs, technicians Inspection
service with oil 18,000 miles (29,000km) / 24 months
According to the US-based Alternative Fuels must also inspect and replace electric-specific (excluding electric)
Data Center, because HEVs and PHEVs have elements, such as: Inspection service Up to 36,000 miles (58,000km) /
internal combustion engines, maintenance extended with oil 36 months, then every 36,000 miles
requirements are similar to those of • Charging cable: check that cable is (excluding electric) (58,000km) or 24 months
conventional vehicles. “The electrical system present and visually check its condition
(battery, motor and associated electronics) Areas EV mechanics will need to be trained in:
typically requires minimal scheduled • High-voltage battery: check the charge
maintenance, and brake systems generally last level and recharge it if necessary • Knowledge of Advanced Vehicle
Technologies
longer than those on conventional vehicles
• High-voltage components and high- • High Voltage Electrical Safety Certification
because of regenerative braking,” the Center’s
voltage cables: inspect these for damage • Understanding the Development of Electric
website states.
and correct routing and securing of Vehicles
EVs typically require less maintenance than lines. • High Voltage Vehicle Safety Systems
conventional vehicles because: Requirements
Unlike petrol and diesel vehicles, electric • Hybrid Engines
• The battery, motor and associated vehicles don’t need an oil change. • AC Induction Electrical Mechanisms
electronics require little to no regular • Power Inverter System Technology
Volkswagen UK has helpfully published the
maintenance • Permanent Magnet Electrical Motors
following Service Regime Comparison for a
Golf. • Electric Circuit Systems
• There are fewer fluids to change
• DC-AC Converter Systems
• Brake wear is significantly reduced due Electric (fixed servicing only) • Gears and Cooling Systems
to regenerative braking • Electric Propulsion Sensing Systems
18,000 miles (29,000km) /
Inspection service 24 months, then every 18,000 miles • Battery Construction and Technologies
• There are far fewer moving parts (29,000km) or 12 months
• Energy/Fuel Management Hardware
relative to a conventional petrol engine. 36,000 miles (58,000km) / Systems
Expanded 36 months, then every 36,000 miles
inspection service (58,000km) or 24 months • Battery Technologies Developments
Battery maintenance
• Lithium Ion Battery Technology
The batteries used in EVs can be charged only • Electric Battery Management Systems
Hybrid (fixed servicing only)
a limited number of times. The batteries in • Nickel-Metal Hydride Technology
electric-drive vehicles are generally designed • Vehicle Battery Regeneration Braking
Oil change 9,000 miles (14,500km) / 12 months
to last for the expected lifetime of the vehicle. Systems
Like the engines in conventional vehicles, • Electric Car Maintenance and Common
the advanced batteries in PEVs are designed Inspection Faults
service with oil 18,000 miles (29,000km) / 24 months
for extended life but will wear out eventually. (excluding electric) • Design of Adapter for an Electric Motor
Currently batteries are expensive but prices are • Electric Car and Hybrid Car Climate
Inspection service Up to 36,000 miles (58,000km) /
expected to fall as technology improves and extended with oil 36 months, then every 36,000 miles Control Systems
production volumes increase over time. (excluding electric) (58,000km) or 24 months • Design and Making a Fibreglass Battery Box
18 | NOVEMBER 2019 | automotivedealer.com.auYou can also read
