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OFFICIAL PUBLICATION OF AADA | DECEMBER 2017 | ISSUE 21 NEW CAR DEALERS MUST HAVE AN AUTOMOTIVE INDUSTRY CODE DIRECTIONS IN AUSTRALIA'S AUTOMOTIVE INDUSTRY FEATURE TAKATA AIRBAG RECALL COULD BE COMPULSORY WHY YOU NEED TO TRAIN YOUR SALES STAFF www.automotivedealer.com.au PRINT POST 100019106
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This document is issued by Motor Trades Association of Australia Superannuation Fund Pty. Limited (ABN 14 008 650 628,
AFSL 238 718) of Level 3, 39 Brisbane Avenue Barton ACT 2600, Trustee of the MTAA Superannuation Fund
(ABN 74 559 365 913). Motor Trades Association of Australia Superannuation Fund Pty. Limited has ownership interests
in Industry Super Holdings Pty Ltd and Members Equity Bank Limited. The MTAA Super Product Disclosure Statement
(PDS), an important document containing all the information you need to make a decision about MTAA Super, can be
obtained by calling MTAA Super on 1300 362 415 or visiting mtaasuper.com.au/handbooks. You should consider the PDS in Meet Matt
making a decision.
44 years old from NSW
Member since 1989
WELCOME Australian Automotive Dealer Association
CONTENTS ISSUE 21 | DECEMBER 2017
WELCOME
CONTACT AADA From The AADA Chairman.................................................................................................4
P.O. Box 4530
Eight Mile Plains, QLD 4113 From The AADA CEO..........................................................................................................4
CONTACT AUTOMOTIVE DEALER POLICY
Level 1, 350 South Rd
New Car Dealers Must Have An Automotive Industry Code....................................... 5-7
Hampton East, VIC 3188
AADA Delivers Input Into Reforms To Sale Of Add-On Insurance.................................8
Issue No. 21 | DECEMBER 2017
AADA Welcomes Mandated Comprehensive Credit Reporting......................................9
PUBLISHER: AADA
Treasurer Morrison Bullish About Australia’s Economic Future................................10
MANAGING EDITOR: Luke Prendergast
Takata Air Bag Recall Could Be Compulsory.................................................................11
PRODUCTION MANAGER: Stace Nagle
Flex Commissions Banned From 1 November 2018......................................................12
ART DIRECTOR: Nick Murphy
We Are Starting To Make Our Presence Felt In Canberra............................................13
ADVERTISING MANAGER: Geoff Vine
geoff@automotivedealer.com.au FEATURES
Mobile: 0413 854 779
Record Sales In October.............................................................................................14-15
Phone (03) 9576 9944 | Fax (03) 9576 7277
Toyota’s Exit Party.............................................................................................................15
AUTOMOTIVE DEALER
Brisbane Fuel Rip-Off.......................................................................................................16
DELIVERY/CHANGE OF ADDRESS
(03) 9576 9944 or Ferrari To Add More Australian Dealerships.................................................................17
editor@automotivedealer.com.au
Dealer Satisfaction Down In UK.................................................................................18-20
EDITORIAL
Join Our Study Tour To NADA 2018.................................................................................25
editor@automotivedealer.com.au
The Move To Single Touch Payroll Reporting Sets A New Standard
EDITORIAL & ADVERTISING OFFICE
Lvl 1, 350 South Rd, Hampton East, VIC 3188 For Payroll Reporting In Australia...................................................................................27
Get Serious About Cyber Security.............................................................................37-38
No responsibility is accepted by the publisher Good News On The Tax Front..........................................................................................39
for the accuracy of information contained
in advertisements in the Automotive Dealer The Future Of Mobility................................................................................................40-42
magazine. Publication of any advertisement does
In The Age Of Disruption, You Need To Provide An 'Experience'...........................43-45
not constitute endorsement by the publisher
of any product, nor warrant its suitability. The Demise Of Local Manufacturing.........................................................................46-47
Advertisements are published as submitted by
advertisers. Why You Need To Train Your Sales Staff – And Keep Training Them....................48-49
COPYRIGHT Much To Learn On 2018 China Study Tour.....................................................................50
No part of this magazine may be reproduced
without the publisher’s written permission. MOTORSPORT
CONTRIBUTORS The 2017 Supercar Season In Review.......................................................................22-23
The views expressed in Automotive Dealer by
external contributors and advertisers are not 2017 AADA NATIONAL DEALER CONVENTION & EXPO FEATURE
necessarily those of AADA.
Greatest Ever Dealer Principal Attendance At Convention....................................28-29
INDUSTRY REPORT FEATURE
AUSTRALIAN
@AADA_ASN AUTOMOTIVE DEALER Directions In Australia’s Automotive Industry..........................................................30-31
ASSOCIATION
National Vehicle Fleet – Key Facts............................................................................33-34
WE’D LIKE TO HEAR FROM YOU.
We’d like to hear from you about what’s been schools, supporting junior sporting clubs or It’s a pity that the community work being
happening at your dealership that you think sponsoring a charity event. done by Dealers is a well-kept secret. We
could be worth passing on to our readers. intend to change that. AADA is determined
We would like to know. to generate a greater respect for new car
It can be anything from a unique sale, a fleet franchise Dealers as compassionate business
deal or a story about a member of your staff Whatever the story you have, it will be good people. Part of our strategy is to remind the
who recently accomplished a notable feat. reading. Send us the information and key media, politicians and opinion makers that,
contact details and we will follow it up. If you by employing over 66,000 people, AADA
It could be a ‘feel good’ community initiative have photographs of the endeavour so much members make a substantial contribution to
you have undertaken involving local the better. the Australian economy.
WELCOME Australian Automotive Dealer Association
FROM THE AADA CHAIRMAN
Well, they are wrong. The industry is alive and these investments are flowing and represent great
well. Indeed it is us, as new car Dealers, who protection for our business model.
Terry Keating are now the motor industry. Our investment in
facilities and inventory; our employment and As you all know, common sense prevailed on
AADA Chairman
training of staff; and our economic impact on the direct import licence for new cars. Many
our local markets right across Australia mean we unforeseen risks for consumers have been averted.
represent more than two per cent of national GDP. A couple of years ago we achieved a similar result
with potential used car imports.
I
t is interesting how things change and often, after This transformation has not escaped the attention
much debate, we just move on. of our regulators and legislators. Much of the Those with a vested interest in bringing in these
‘education’ of these groups has come via our vehicles are now claiming trade opportunities
Our members are resilient and resourceful, and secretariat. with Japan have been lost. What a joke. Using this
generally adapt quickly to these changes. country as a dumping ground for used cars no
Hence, the people who represent us every day on longer fit for purpose in their own country is an
So it is with the end of manufacturing in Australia. matters with these bodies have become opportunity we can do without. Your Association
As Dealers, we all got plenty of notice of these well-respected by these regulators and legislators. will act in the best interests of its members with
events and we made appropriate adjustments. In fact, we are often invited to closed sessions one very significant caveat. Consumer harm is not
However, the media would have one believe this to help them better understand not only our on our agenda. Let’s hear the proponents of selling
was all a very current decision. industry but also the role we play as businesses vehicles with no provable history make that claim.
and sometimes the problems we face. Often these
With the demise of local automotive assembly problems emanate from ill-considered policy As this may be our last edition for 2017, I take the
the question arises: “Who is the motor industry?” proposals or simple misconceptions. opportunity on behalf of our board to wish you
Again, some media and politicians would have us all the best for year end. And what a year it has
believe there no longer is an industry. We have invested heavily in our secretariat to make been. We live in hope that 2018 will see a lot less
them as effective as they can be. The dividends of disruption. But that may be a little naïve.
FROM THE AADA CEO
As mentioned in the latest CEO's Newsletter, we Now we ARE the go-to organisation, well-
should not allow the final closure of Holden's recognised in Canberra as the face of the new car
David Blackhall Elizabeth Plant to pass without making a brief business in Australia.
AADA CEO comment.
To keep that important momentum building, we
While the demise of local assembly has been have a full agenda of meetings and contacts with
widely written about in the media and while senior political leaders, regulators and bureaucrats
W
hat a fabulous AADA Convention it undoubtedly has had negative impacts on between now and the end of the year. Your voice is
we enjoyed in September at the manufacturing employment, it's not all bad news. being heard – and increasingly so.
International Convention Centre Sydney Collectively we directly employ around 60,000
at Darling Harbour! Australians at the retail level and close to 200,000 We are also making important progress on
in the value chain. Franchised new car Dealers the longstanding issue of creating a specific
I know that many of you were there in person, contribute over $12 billion to Australia's GDP Automotive Industry Code that will set standards
but equally – and as is often the case – I know that annually. for franchise agreements in Australia. This is
business pressures kept many of you hard at work probably the single most important task before us
at the dealerships. A year ago almost no-one among the important as we set out our agenda for next year.
decision-makers in Parliament knew much about
The Convention generated massive amounts the Australian Automotive Dealer Association. In Please enjoy this, the final hard-copy version of
of highly relevant material on topics of vital an article in this magazine entitled “Making Our our magazine.
interest to Dealers across the entire gamut of our Presence Felt” we spell out just what a significant
regulatory and advocacy agenda. So if you were The next version you receive will be clearly
challenge that lack of recognition presented – and
unable to make it to Sydney – and even if you stamped "NOW PRODUCED IN 21st
the effort required to get us to where we are today.
did – this edition of Automotive Dealer provides CENTURY MODE!"
an unparalleled opportunity to catch up on all the To many influential MPs, we were just part of the
Good luck and good selling!
latest developments that are likely to impact your ‘automotive alphabet soup’ that confronted the law
business in the next year or two. makers and regulators.
4 | DECEMBER 2017 | automotivedealer.com.au
POLICY Australian Automotive Dealer Association
NEW CAR DEALERS MUST HAVE AN
AUTOMOTIVE INDUSTRY CODE
T
he ACCC can significantly improve
consumers’ new car retail experiences
in Australia by recommending the
adoption of an Automotive Industry Code
when it publishes its findings from the New
Car Retail Industry Market Study, expected
before year end.
In a supplementary
submission to the ACCC
in October, AADA
proposed an Automotive
Industry Code. is not a lot of discretion in some franchise the consistent feedback from the Australian
agreements,” he said. Motor Dealer Council, could not be ignored
The AADA’s submission and encouraged the AADA to lodge the
drew attention to the “In certain instances, some manufacturers can supplementary submission.
structural imbalance assume direct control of consumer complaints
Rod Sims,
Chairman, ACCC
between new motor and dictate Dealer responses in quite specific The Australian Motor Dealer Council consists
vehicle franchise detail.” of the Chairs of leading dealer councils for all
Dealers and manufacturers. This currently the significant brands in Australia. The AMDC
disadvantages Dealers and leaves consumers Mr Blackhall said the imbalance in has been advocating strongly for an Industry
vulnerable. the relationship between Dealers and Code for the last several years.
manufacturers was highlighted at the AADA
The submission stated that for some brands National Convention when ACCC Chairman, Dealer franchise agreements are currently
the imbalance is caused by one-sided Rod Sims, said “manufacturers need to covered under the broad Franchising Code
Dealer agreements and related policies and step up to meet their consumer guarantee that covers everything from fast food chains to
procedures, including restricting what Dealers obligations under the Australian Consumer Jim’s Mowing franchises.
are allowed to say to consumers. Law and stop putting the squeeze on Dealers
through dealer agreements, policies and “What we have is a bit of an issue with scale.
AADA CEO, David Blackhall, commented, procedures”. The average new car Dealer is investing tens of
“Dealers are required to adhere strictly to millions of dollars in very specific, purpose-
manufacturers’ policies regarding warranties Mr Blackhall said this clear signal from the built facilities,” Mr Blackhall said.
and potential product defect claims. There ACCC Chair, when taken in combination with
DMS
automotivedealer.com.au | DECEMBER 2017 | 5
POLICY Australian Automotive Dealer Association
“You can’t take a BMW showroom and turn it code that would govern just retail automotive They can, therefore, place Dealers in positions
into a McDonald’s franchise all that easily.” new cars,” Mr Blackhall said. where the recoupment of the investment
over the period of the term of the agreement
Mr Blackhall said that, in the worst examples “As a Dealer you are asked to make a series is almost impossible, no matter how good a
of the existing system, some Dealers have low of significant investments in a specific set of Dealer you are.”
or no security of tenure; some can be served assets, but the franchising arrangement – the
with non-renewal notices on commercially agreement that governs your tenure as a The AADA submission called for a minimum
unacceptable short terms or without reasons Dealer – might be as short as 12 months. One tenure of five years and one renewal period of
being given, and some agreements are highly promoted brand consistently adopted five years, with any right of renewal exercisable
completely silent on significant business that approach in recent years. No surprise to us by a Dealer, so long as the Dealer is not in
considerations such as, for example, future when the same brand also suffered high levels breach of the Dealer agreement.
capital expenditure requirements. of consumer dissatisfaction.
“Our submission specifically requested
These types of arrangements provide “One of the challenges for the car prohibiting manufacturers from issuing non-
manufacturers with significant commercial manufacturers as a group is that there’s a range renewal notices to Dealers without first issuing
leverage compared with the average Dealer. of behaviours here. You’ve got companies reasons why in writing, setting out the steps
– large, well-known, strong global brands the Dealer could take to address those reasons
“We’ve been hearing about these types of issues – that are very good citizens. They behave and detailing the rights the Dealer has to
with the Original Equipment Manufacturers’ in commercially reasonable ways and their challenge those reasons.” Mr Blackhall said.
franchise agreements for a very long time. franchise arrangements are, to a large extent,
Aside from the negative business impacts, the exemplary. You’ve got others – maybe newer “We’re also concerned about some of the
risk to consumers is there. That’s why we’re arrivals that we might call ‘challenger brands’ behaviours internally for some of these
asking the ACCC to take a look at framing up – that maybe don’t get it so much that this companies – and, again, this is quite specific,
some of these issues in a proposed separate business is a marathon, not a 100-metre sprint. so generalisations aren’t that helpful. But, to
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6 | DECEMBER 2017 | automotivedealer.com.au
POLICY Australian Automotive Dealer Association
give an example, the margins on new cars the power balance in the relationship between well, perhaps the time has come to support a
have, over the last 20 or 30 years, shrunk to the them and the Dealers who actually put their clear, practical and fair Industry Code. It is the
point where I can confidently say if you were money on the line and sell the cars for a living,” 21st century after all…”
going to buy a new car today from one of the he said.
mainstream franchises – or even the luxury “In this regard, the AADA aim is to work with
franchises – you’d stand a very good chance of “At the end of the day, this is about two key the Chief Executive of the FCAI, Tony Weber,
driving that car off the showroom floor with principles: First, not allowing Australian expressing our concerns and seeking a meeting
zero margin in it for the Dealer, zero profit business owners and entrepreneurs to be to work through how a sensible collaborative
on the actual cost of the car. Many cars are treated shabbily by offshore multi-nationals approach can develop a specific automotive
delivered on a negative cash-to-cash basis. with low investment and employment levels industry code that will offer better protection
locally – you know, the old Aussie ‘fair go’ for Dealers and consumers alike.
“That is because the mechanisms inside the principle.
industry now have shifted to what I’ll call a “We’re optimistic that we’ll get some traction
back-end reward system. So yes, you sell the “But secondly, and certainly more importantly on this. We’re not going to kid ourselves that
car, there’s no money in the car, but if you for the regulators, consumers have to be we’ll get a wish list of everything we’d like,
achieve certain objectives and targets at the able to be protected in the manner that the but if we can get some dialogue and get some
back of the business you may be rewarded government has enshrined in the black-letter discussion around some of the more obvious
with a bonus at the end of the month or the law of the ACL. Any importer who thinks that areas of concern for our members, we’d
end of the quarter. That is a very problematic they can write an agreement that prevents, consider that to be progress.”
business model for somebody to be putting impedes or slows down their Dealers from
delivering on the ACL guarantees is living in Once the ACCC releases its findings in
millions of dollars on the line.”
the past. December, the matter will go before the
“We’re not interested in going to war with the Minister for Small Business, Michael
people who make the cars – we’re in business “I would have thought the best response to our McCormack, whose department will produce
with them. But we’re interested in redressing initiative from thinking importers would be – a series of recommendations.
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automotivedealer.com.au | DECEMBER 2017 | 7
POLICY Australian Automotive Dealer Association
AADA DELIVERS INPUT INTO REFORMS TO
SALE OF ADD-ON INSURANCE
A
response to ASIC in October by distribution channels that include the consumer the opportunity to opt-out.
the Australian Automotive Dealer novated leasing companies, banks and
Association on the sale of add- credit unions. The submission stated the process
on insurance and warranties made it should not distinguish between a new
clear it would support reform proposals ASIC has proposed a deferred sales or used car and the model should apply
that lead to better consumer outcomes, model for the sale of add-on insurance. uniformly to all add-on products.
informed decision making, improved In particular it has sought feedback on
the commencement and duration of the The AADA submission addressed 26
sales processes, greater transparency
deferral period. detailed questions put by ASIC covering
and more competition.
every aspect of add-on insurance.
The AADA submission states that to The AADA submission recommends ASIC has been seeking feedback by
reduce market distortions ASIC should a deferral period should commence as stakeholders on the proposed direction.
look beyond the dealership channel soon as the consumer communication is
and implement proposals across all received, be as short as possible and give
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8 | DECEMBER 2017 | automotivedealer.com.au
POLICY Australian Automotive Dealer Association
AADA WELCOMES MANDATED
COMPREHENSIVE CREDIT REPORTING
T
he Australian Automotive Dealer The Treasurer said the four major banks would information in credit files to allow competitors
Association (AADA) has welcomed be the first to face mandated reporting, given to the big banks to better assess risk and price
the decision by the Turnbull that they account for approximately 80 per products and to broaden assess to finance.
Government to legislate mandatory cent of the volume of lending to households.
comprehensive credit reporting (CCR) This includes identifying credit limits and loan
from 1 July 2018. The banks will be required to have 50 per cent repayment history to enable lenders to have
of their credit data ready for reporting by 1 July a better view of customer risk profiles and
Federal Treasurer, Scott Morrison, said the next year, increasing to 100 per cent in 2019. potentially offer risk-based pricing that could
Government had made it clear in the Budget be cheaper for consumers with good credit
that CCR would become mandatory if credit AADA CEO, David Blackhall, said CCR will histories.
providers did not meet a threshold of 40 per give lenders access to stronger data that will
cent of data reporting by the end of this year. encourage competition for small businesses Mr Blackhall also urged the Government to
and retail customers with positive credit work towards the creation of a national credit
He said less than one per cent of credit histories. scoring system available to all license holders,
providers have met the threshold and it was similar to the model currently used in the US.
obvious the target would not be met. He said CCR will increase the level of
POLICY Australian Automotive Dealer Association
TREASURER MORRISON BULLISH ABOUT
AUSTRALIA’S ECONOMIC FUTURE
A
ADA Chief Executive Officer, David Investment capital not flowing sufficiently to
Blackhall, and Executive Director drive economic activity has had a numbing
Operations, Brian Savage, were effect on jobs, wage growth, inflation and non-
among guests at the Australian British mining profits.
Chamber of Commerce breakfast on 3
November to hear Federal Treasurer, Scott He said, however, the final budget outcome
Morrison, deliver an address on Australia’s for 2016-17 was $4 billion smaller than
ongoing economic performance. forecast and that real growth in government
expenditure was running under 2 per cent –
The Treasurer was bullish in his remarks, the lowest of any government for 50 years.
stating how in January this year he forecast a
real GDP growth of 2 per cent in 2016-17 that His comprehensive speech only allowed time
turned out to be right and further predicted for two questions from the packed audience,
a 2.75 per cent growth for 2017-18 due to the one of which came from Mr Blackhall.
economic pick-up.
Scott Morrison, Mr Blackhall asked the Treasurer about the
Mr Morrison said the Government was Federal Treasurer likelihood of the abolition of the 5 per cent
focused on jobs growth and pointed out import duty and the dropping of the LCT as
Australia had just experienced the strongest cent to its current rate of 19 per cent in 10 part of as post-Brexit Free Trade Agreement
full-time jobs growth on record, with nearly years and it still has a few more per cent to go. negotiation.
20,000 jobs created in September. This was the
“In resource-rich Canada, the corporate rate Obviously not wanting to make any firm
twelfth consecutive month of jobs growth and
has plummeted from over 40 per cent in the promises, the Treasurer said his priority was
the longest run in over 23 years.
early 2000s to 26.7 per cent,” he said. to continue to build towards a budget surplus
Mr Morrison reminded the audience the and that when that is achieved the LNP
Turnbull Government had already legislated Mr Morrison said that France and China also Government will be keen to reduce as many
progressive tax cuts for businesses with a believe in lowering taxation and President taxes as possible.
turnover less than $50 million, taking their Trump has declared a target of 20 per cent.
Mr Morrison said Australia has one of the
tax rates down from 30 per cent to 25 per cent
He said the growing gap between our highest corporate tax revenue as a percentage
over a 10-year period.
corporate tax rate and those of some of our of GDP in the world at 4.4 per cent due to its
“Now we need that extended to all businesses trading partners is an obvious barrier for resource bias, compared to the vast majority
by freeing them from the shackles of high tax new investment which is steadily leaving our of Europe and the US, which are under 3 per
and allow them to grow their businesses and businesses uncompetitive. cent.
deliver more better-paid jobs to Australians,”
The Treasurer’s commitment to extending In summary, the Treasurer said that
he said.
corporate tax cuts would have been welcome opportunities abound as the shackles of
“This would generate a sustained lift in GDP of news to automotive dealers, many of which uncompetitive tax rates are being released.
just over one per cent,” he added. have a turnover exceeding $50 million, but
operate on relatively low profit margins. There is evidence of more jobs, investment and
“The UK has dropped its tax rate from 30 per more exports, from the economic data we have
seen in recent months, he said.
10 | DECEMBER 2017 | automotivedealer.com.auPOLICY Australian Automotive Dealer Association
TAKATA AIR BAG RECALL COULD BE
COMPULSORY
T
he Takata air bag recall saga Mr Savage has been attending a series of Dealer concerns continue to focus on
trundles on, with the ACCC poised industry stakeholder meetings convened workshop capacity, which could become
to decide upon the recall becoming by the ACCC to investigate the issues unmanageable if the compulsory recall is
compulsory, according to Australian surrounding the recall. announced and customers all turn up at
Automotive Dealer Association (AADA) dealerships at once. They are also concerned
Executive Director Operations, Brian He said the ACCC has raised concerns about about the potential buy-backs and having to
Savage. the advice manufacturers have given to provide loan vehicles, both ideas that ACCC
Dealers and customers and the capacity of has been exploring.
It depends on the findings of the ACCC’s Dealers to complete the recall.
investigation into the logistics and progress of An earlier proposal by the ACCC – to allow
the recall, about which the regulator continues The Regulator also wants to know what independent repairers to perform the recall
to raise questions. arrangements manufacturers have put into place – has been dismissed on the grounds that the
with their Dealer networks to ensure the work is risks far outweigh any perceived benefit.
The ACCC already has a draft compulsory completed.
recall notice that will come into effect only A compulsory recall potentially includes an
after it recommends its enactment through Several manufacturers have opposed a additional 877,000 vehicles more than the 2.49
the Minister for Small Business, Michael compulsory recall, arguing the recall is progressing million already recalled for rectification by 31
McCormack, which will most likely be before as well as can be expected and that Dealers can December 2020.
the end of this year. meet the demand with the available level of
replacement airbags.
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dealersolutions.com.au 1300 66 11 33POLICY Australian Automotive Dealer Association
FLEX COMMISSIONS
BANNED FROM
1 NOVEMBER 2018
A
stute Dealers will be rethinking their business model on how
best to deal with receiving payments from finance companies
when flex commissions are prohibited from 1 November 2018.
Notice was given by ASIC when, in September, it registered a Legislative
Instrument stating it will, as from 1 November 2018, prohibit existing
practices in the payment of flex commissions to Dealers.
The final Legislative Instrument is quite different from initial ASIC
drafts in that it no longer seeks to ban all commissions on contracts
written at more than 200bps below lenders’ nominated rates.
AADA CEO, David Blackhall, said it also preserves the Dealers’ rights
to receive payments on discounted contracts, capping the amount
payable at the 200bps level regardless of the actual discount beyond
that.
He said it also preserves Dealers’ rights to receive from finance
providers payments that are not directly linked to the effective rate paid
by a consumer for a particular loan.
We anticipate the Legislative Instrument will be made law at the next
Parliamentary sitting, he said.POLICY Australian Automotive Dealer Association
WE ARE STARTING TO MAKE OUR
PRESENCE FELT IN CANBERRA
T
welve months ago, few people in his shoes are almost threadbare from walking “It has been a huge education process, but we
the political circles of Australia the corridors and offices of government are starting to make headway,” Mr Blackhall
knew anything about the Australian ministers, backbenchers, members of the said.
Automotive Dealer Association (AADA). opposition, regulators and bureaucrats – but
now they know what the AADA is and who “Over the past year I have had more than 80
The irony is, of course, that the destiny of the we represent. one-on-one meetings with various Federal and
automotive industry was – and still is – in the State government ministers, shadow ministers
hands of these very same people. It is fair to “We were part of what ministers referred to and regulators, who now know what we are all
say some had a smattering of knowledge about as ‘the alphabet soup of organisations’ that about,” he said.
our industry, but had no idea of the size or the regularly knocked on their doors.
impact we have on the national economy. Mr Blackhall said that, fortunately, the
“We were just another motoring association. workload is now being shared by James
They were unaware we contribute just over They knew nothing about the AADA and were Voortman, the recently appointed Executive
two per cent to the national economy, that we confused as to which organisation should be Director Policy and Communications, who is
employ around 70,000 people with an annual perceived as the peak industry body. well respected and connected on all sides of
wage bill in excess of $4 billion and that we the political spectrum.
have more than $17 billion invested in plant “They now know we represent only new car
and facilities. franchise Dealers – not the car manufacturers, He said that having James based in Canberra
repairers or the insurance and finance means he can meet with a Minister or
AADA CEO, David Blackhall, said the soles of companies – and that we are well organised. Regulator at a moment’s notice.
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automotivedealer.com.au | DECEMBER 2017 | 13FEATURES Australian Automotive Dealer Association
RECORD SALES IN OCTOBER
S
mall cars and SUVs, together with a (up 6.1%). Among the states and territories, sales (18.5%); and the Heavy Commercial
continued strong demand for light Western Australia posted the largest sales Vehicle Market is up by 412 vehicle sales
commercials, have driven Australia’s increase, up by 11.6 per cent on October (13.7%) versus October 2016.
new vehicle market to a record October sales 2016. South Australia recorded the second
result, according to data released by the motor largest gain of 7.0 per cent, followed by • Toyota was market leader in October,
industry’s official statistical service, VFACTS. Queensland (+5.9%), the Northern Territory followed by Hyundai and Mazda. Toyota
(+4.3%), the ACT (+2.6%) and Victoria led Hyundai with a margin of 9,036 vehicle
October sales reached a new high of 95,763, (+2.0%). Only NSW (-1.2%) and Tasmania sales and 9.4 market share points.
surpassing the previous October record set back (-3.5%) declined.
in 2012. Two small cars and a light commercial Sales dipped in September
vehicle were the nation’s top three sellers for Japan remains our biggest source of imported
October was a great result after the overall
October, reflecting the surge in demand within vehicles (27,062 during October), followed by
market dipped 2.4 per cent in September
those segments. With two months remaining, Thailand (22,826) and Korea (15,395). Toyota
compared with the same month last year.
total industry sales are 0.5 per cent ahead of last remained Australia’s marker leader with an 18.6
year’s record. Total industry sales year to date per cent share of the October market. Hyundai A total of 100,200 new vehicles sales were
are at 984,931, compared with 980,433 this time surged to second place with an October share of recorded nationally for September, a fall of 2.4
last year. Six record months of sales have now 9.2 per cent, followed by Mazda (8.4%), Holden per cent compared with September 2016.
been posted during 2017. (8.1%) and Ford (6.0%).
Pick-up and cab-chassis 4X4 light commercial
Australia’s overall passenger car sales declined The nation’s best-selling vehicle during October vehicles, together with small and medium Sport
by 3.8 per cent in October despite the 9.7 per was the Hyundai i30 (3,983), followed by the Utility Vehicles (SUVs) were the three growth
cent upsurge in the demand for small passenger Toyota Hilux (3,812), Toyota Corolla (3,088), segments during September. The 4X4 light
cars. Year to date, passenger cars are down by Ford Ranger (3,074) and Holden Commodore commercials were up 11 per cent, small SUVs
6.9 per cent on the same ten-month period in (2,418). rose 7.9 per cent and medium SUVs increased
2016. However, SUVs and light commercials 3.3 per cent compared with September 2016.
continue their strong climb. The SUV market Key Points:
grew by 1.2 per cent for the month of October, SUV and light commercials remain the two
• The October 2017 market of 95,763 new
compared with the same month last year, while robust areas of the market, accounting for a
vehicle sales is an increase of 2,406 vehicle
light commercials soared by 18.5 per cent in the 58.8 per cent share of total sales year to date,
sales or 2.6% on October 2016 (93,357)
same period on the back of a very strong market up from 56 per cent in 2016. Importantly,
vehicle sales. October 2017 (25.4) had the
demand for 4X4 cab-chassis models (up by a the overall market remained slightly ahead
same number of selling days as October
remarkable 25.2 per cent in October, compared (0.2%) of last year’s record total on a year to
2016, which resulted in an increase of 94.7
with the same month in 2016). date basis.
vehicle sales per day.
Both business (+19.1%) and private (+15.6%) All passenger car segments were affected by the
• The Passenger Vehicle Market is down by
light commercial sales were strong during downturn although sales of sports cars (+4.1%)
1,421 vehicle sales (-3.8%) over the same
October. Within the SUV segment, the star and people movers (+5.0%) remain ahead of
month last year; the Sports Utility Market
performers for October were in the small 2016 year to date.
is up by 429 vehicle sales (1.2%); the Light
category (up 12.6%) and medium category
Commercial Market is up by 2,986 vehicleFEATURES Australian Automotive Dealer Association
All the states and territories experienced a said that while there was a modest sales fall in Key Points:
decline in sales although New South Wales ( September, strong activity was recorded across
0.7%), Victoria (-2.3%) and Queensland (-2.7%) several key segments. • The September 2017 market of 100,200
were the least affected. On a year to date basis, new vehicle sales is a decrease of 2,496
Victoria’s 3.3 per cent growth significantly “Any month over 100,000 total sales has to vehicle sales or -2.4% on September 2016
outstrips that of all the other states and be seen as a strong outcome, proving there (102,696) vehicle sales. September 2017
territories. is continued value for the consumer in the (25.6) had the same number of selling days
market,” Mr Weber said. as September 2016, which resulted in a
Private sales of light commercial vehicles decrease of 97.5 vehicle sales per day.
provided stimulus during September, increasing “To keep this outcome in perspective, it has to
by 9.6 per cent over the same month last year. be remembered that the September results of • The Passenger Vehicle Market is down by
Business sales of light commercials, too, were 2015 and 2016 were both very strong, and both 3,929 vehicle sales (-9.3%) over the same
up by 7.9 per cent, with 4X4 utilities and cab- those years ended in records.” month last year; the Sports Utility Market
chassis models as the segment’s strongest sellers. is down by 494 vehicle sales (-1.3%);
Market leader Toyota recorded a 1.07 per cent the Light Commercial Market is up by
Diesel remains the overwhelming engine type
rise in sales during September for a dominant 1,485 vehicle sales (8.1%); and the Heavy
preference in the light commercial market, up
17.3 per cent share overall, followed by Mazda Commercial Vehicle Market is up by 442
by 10.5 per cent in September to both private
with 10.3 per cent, Hyundai (8.1%), Mitsubishi vehicle sales (15.4%) versus September
and non-private buyers. In a month where SUV
(7.1%) and Holden (6.9%). The Ford Ranger 2016.
sales were down 1.3 per cent overall, business
light commercial was Australia’s top-selling
(+1.7%) and government (+6.7%) sales both
vehicle for September with 4,318 sales, • Toyota was market leader in September,
absorbed some of the shortfall from an 8.5 per
followed by the Toyota Hilux (3,822), Toyota followed by Mazda and Hyundai. Toyota
cent decline in private sales.
Corolla (3,055), Mazda 3 (2,776) and Holden led Mazda with a margin of 7,049 vehicle
Chief Executive of the Federal Chamber of Commodore (2,547). sales and 7.0 market share points.
Automotive Industries (FCAI), Tony Weber,
TOYOTA’S EXIT PARTY
T
housands of Toyota Australia staff In 1963 Australia became the first country The Toyota Community Foundation Australia
attended closing-down celebrations at outside Japan to build Toyota cars. The will contribute to the region, expecting to
the company’s Altona manufacturing shutdown also makes Australia the first start with a $32 million (AUD) funding boost
plant in October, marking the last country where Toyota has closed a mass to support students in economic difficulty
shift for 3,000 workers after 54 years of production car and engine factory. and schools with disadvantaged educational
manufacturing in Australia. environments.
The Altona plant opened in 1994 with the
Production line workers, supervisors, production of the Corolla. The Camry,
engineers and managerial staff watched formerly built in Port
a celebratory parade of various models, Melbourne, followed
including the first locally-built Toyota, the in 1995.
Toyopet Tiara, as well as Celicas, Camrys,
Corollas, Coronas, Avalons and Crowns.
Toyota Australia President, Dave Buttner, said
the company’s passionate workers would leave
a global legacy.
“Thanks to everyone’s longstanding
efforts, Toyota became the top automobile
manufacturer in Australia, and the vehicles
produced here became a byword for quality
and reliability not only in Australia but also
in the world, as the vehicles were exported to
other regions like the Middle East,” he said.
automotivedealer.com.au | DECEMBER 2017 | 15FEATURES Australian Automotive Dealer Association
BRISBANE FUEL RIP-OFF
A
n investigation by the Australian The investigation came after the Queensland independents resulted in prices as much as
Competition and Consumer Government ordered a Fuel Price Summit last 3.8c per litre below average.
Commission (ACCC) has found that year, which itself followed a campaign by the
Brisbane motorists are paying too much for Courier-Mail/Sunday Mail. The report pointed out that the Queensland
fuel – a combined $50 million per year. Government had scrapped its petrol subsidy
The ACCC wrote to 10 major fuel sellers but eight years ago after an inquiry found that
ACCC Chairman, Rod Sims, said a lack of has not found any justification for the higher only 7.8c of the 9.2c per litre subsidy was being
competition was behind the high prices at the Brisbane prices. passed on to motorists.
bowser, with service stations enjoying high
profit margins at the expense of consumers. “The responses received by the ACCC were “This lack of competitiveness appears to have
largely disappointing,” the report said. persisted in the Brisbane market beyond the
According to the report, the average net profit cessation of the subsidy in mid-2009.”
per service station in Brisbane is 55 per cent “Most retailers stated that they were unable to
higher than other capital cities. provide an explanation, with a few noting that Mr Sims said the ACCC did not have the
their pricing policy was to follow the market.” power to regulate fuel prices.
“It’s a huge gap,” Mr Sims said.
Mr Sims said the lack of competition from “It would be strange if we did,” he said,
“And from a motorist’s point of view, it’s independent chains in Brisbane, compared to pointing out that it was up to motorists to use
simply unacceptable. The cost to motorists Sydney and Melbourne, was behind the price apps such as GasBuddy and MotorMouth to
in Brisbane of higher petrol prices has been difference. save.
significant, at around $50 million per annum.
Over the eight-year period, the estimated cost “This is simply a case of (them saying) ‘we are “You can save 20c or more per litre by
is in the region of $400 million.’’ not facing the same competition so we can choosing when and where to buy,” Mr Sims
make more profit’,” he said. said.
The investigation found that even though
wholesale fuel prices were slightly lower in Brisbane has four independent chains – “By timing their purchases of petrol and
Brisbane than other cities, retail prices for the 7-Eleven, Puma Energy, Freedom Fuels and choosing to buy from the lowest-priced
past eight years have been an average of 3.3c United – making up 34 per cent of the market. retailer, motorists filling up a vehicle with
per litre higher than in Sydney, Melbourne, a 60-litre tank could save themselves in the
Sydney has seven independent chains region of $10 to $15 per tank.’’
Adelaide and Perth.
accounting for 40 per cent of all service
Coles Express is the worst offender, with stations. Mr Sims said the inquiry did nothing to
prices more than 4c per litre above the market explain the regular petrol price cycle.
Not only does Brisbane have fewer
average.
independents, but they do not price as “It is one of life’s most baffling unknowns. It
BP-owned and operated outlets were the next aggressively as in other states. drives motorists mad. They feel they are being
highest, followed by Freedom Fuels and Caltex ripped off and it does the industry enormous
The cost of fuel from Brisbane independents damage as a result.”
owned and operated. The lowest average prices
averaged only 1.3c per litre below the market
were 7-Eleven, followed by Woolworths, Puma
average, while Sydney’s bigger number of
and United.
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www.levanta.com.au p. 1300 577 541FEATURES Australian Automotive Dealer Association
FERRARI TO ADD MORE AUSTRALIAN
DEALERSHIPS
F
ollowing a 2016 report that showed new. We’ve found new partners in some states
Australia has the greatest ratio per where we wanted to change the partnership,
capita of new Ferrari owners, the so every dealership around Australia and New
Italian icon plans to almost double its Zealand – six of them – has been updated.
presence down under by the end of 2018.
“We’re building new service facilities in South
Australia has even outstripped China and oil- Island, New Zealand, new showrooms – a
rich Middle Eastern countries when it comes second one in Sydney and Melbourne – and
to the percentage of first-time Ferrari buyers. we’re currently evaluating who the partner will
be on the Gold Coast.”
Just on 61 per cent of Ferraris sold in Australia
in 2016 were to first-time buyers of the brand. Mr Appleroth said the booming economy was
According to internal Ferrari data this was the the reason more aspiring owners were keen to
highest percentage of any country around the join the Ferrari family.
globe.
“We obviously closely limit the number of cars
Ferrari Australasia Chief Executive, Herbert coming in, but there has never been as high a
Appleroth, said the brand’s record new car popularity in Australia for Ferrari,” he said.
sales in Australia encouraged expansion along “We’re growing up the global volume ranking
the east coast. “Nothing helps Ferrari sales more than every year. We sold out our entire life cycle
confidence and the economy is going very, of 812 Superfasts, and, thankfully, Ferrari has
“We’ve never seen a point in time where very well, plenty of people are gaining allowed us to take more volume, to the point
Ferrari sales have been this successful,” he said. wealth, especially in the property market, in we’re now well and truly in the top ten,” he
construction; the real estate boom means a said.
“The market is extremely buoyant and I have lot of people are making a lot of money and
no problem saying it’ll be another record from people love to celebrate that with a Ferrari. The LaFerrari will only make it to Australia
Ferrari this year, a measured year-on-year in single digits, and there are regulatory
increase.” “We’re not a car manufacturer any more, we’re restrictions on the local Ferrari operation Mr
a dream factory, whether it’s a pre-owned 355, Appleroth wants to see changed.
Mr Appleroth said the number of Ferrari a new modern-day Ferrari or a Ferrari hat as a
dealerships would increase from five five-year-old.” “Our customers are global and with the way
showrooms to nine by the end of 2018. taxes and registrations are at the moment in
Mr Appleroth said the Australasian increased Australia, hopefully regulations will change
“The first part of our focus with this growth sales to 167 vehicles in 2015, from a global in the future where our customers can bring
was to redevelop all our facilities and we’ve pool of around 8000. Australia/New Zealand is left-hand drive cars into the country and drive
had every one of them updated or made brand rising up the ranks. them,” he said.
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DEALER SATISFACTION DOWN IN UK
B
ritish franchised new car Dealers are • Kia also had the highest average score Future profit return
less satisfied with their relationships (8.5) across all questions of the survey.
with manufacturers than they were Dealers showed more satisfaction with their
six months ago. • Suzuki and Toyota closed out the predicted future profit than their current one
top five with 8.0 and 7.8 points with 15 out of 29 responses above the neutral
The National Franchised Dealers Association respectively. Toyota experienced a score of 5.0. The average score was 5.2, 0.4
(NFDA), which represents franchised car significant improvement of 1.1 points points lower than the last survey. Of the Dealer
and commercial vehicle Dealers in the UK, on last winter’s score of 6.7. networks surveyed, 19 saw their levels of
conducted its Summer 2017 Dealer Attitude satisfaction decrease, eight saw an increase and
Survey, which found an average satisfaction • The least valued networks were Jeep two did not change.
score of 5.6 out of 10 amongst Dealers (2.9), Citroen (2.8), and Nissan (2.6).
regarding their overall relationship with Top performer: Kia 8.5 points
• Audi was the most improved Dealer
manufacturers. Bottom performer: Jeep 2.6 points
network, with an increase of 1.5 points.
That is -0.5 points down from the last survey Audi gained a total of 61.8 points Most improved:Audi & Volkswagen+1.5 points
and -0.6 lower than the same time last year. across the whole survey, achieving the
highest overall improvement. Biggest decline: Peugeot -2.6 points
NFDA Director, Sue Robinson, said the Summer Average score: 5.2 points
2017 survey had 1,754 respondents from a total “Although average scores across the majority
of 29 participating franchised networks, which of the questions have generally declined, Total margin
equates to a response rate of 42%. some networks continued to perform well
following recent success and others showed With regard to satisfaction with total margin
“The Summer 2017 survey had an significant improvements. Notably, Kia on new vehicles, 20 Dealer networks saw their
encouraging response rate, with considerably reached the first place in the all-important score decline, eight saw an increase and one
increased response return from smaller question and Audi recorded the highest remained unchanged. On a positive note,
dealerships, highlighting the importance increase in score across all the questions of nearly half of the Dealer networks (14) gave
of the survey for both Dealers and the survey,” Ms Robinson said. a score above the neutral point of 5.0. The
manufacturers, enabling them to monitor and average Dealer rating is 5.5, 0.5 lower than the
evaluate the health of their relationship,” Ms “In a period of uncertainty, where a Winter 2017 survey.
Robinson said. coordinated and combined approach is
needed to deal with a number of important Top performer: Kia 8.4 points
“The results of the survey show that external issues currently facing the industry, it is vital
factors might have put a strain on the that manufacturers and Dealers continue to Bottom performer: Jeep 2.5 points
Dealer-manufacturer relationship. However, work together to safeguard the interests of Most improved: Audi +1.6 points
despite the substantial decline in the average the automotive sector.”
score of the manufacturer rating question, Biggest decline: BMW -3.0 points
more than 60 per cent of the Dealer Other results: Average score: 5.0 points
networks surveyed returned a score above
Current profit return Return on investment – required capital
the neutral point of 5.0.”
With 11 responses out of 29 better than Of the Dealer networks surveyed, 19 saw
As with previous surveys, respondents were
neutral (5.0), the average response decreased a decrease compared with the last survey,
asked a series of questions covering a range
by 0.6 points from 5.4 to 4.8 points nine saw an increase and one remained the
of business aspects and their impact on the
compared to the previous survey. Only same. Slightly less than half of the Dealers, 13
relationship with manufacturers. Responses
six Dealers saw their level of satisfaction networks, gave a response better than 5.0. The
are scored from 1 (extremely dissatisfied) to
increase, while 22 saw a decrease and one average score across all Dealers was 5.1 which
10 (extremely satisfied).
remained the same. is 0.4 down from the last survey.
Key results:
Top performer: Mercedes 8.6 points Top performer: Kia 8.6 points
• Kia became the highest scoring Bottom performer: Alfa Romeo 2.4 points
franchise with 9.2 points. Kia Bottom performer: Alfa Romeo 1.7 points
surpassed Mercedes, which now Most improved: Audi +2.2 points Most improved: Audi +1.8 points
follows with 9.0 points. Lexus Biggest decline: BMW -2.8 points
remained the third placed network Biggest decline: Alfa Romeo -2.5 points
with 8.4 points. Average score: 4.8 points Average score: 5.1 points
18 | DECEMBER 2017 | automotivedealer.com.auYou can also read
