Aada Announces First-Ever Virtual Convention and Expo Moving Forward

OFFICIAL PUBLICATION OF AADA | SEPTEMBER 2020 | ISSUE 32 AADA ANNOUNCES FIRST-EVER VIRTUAL CONVENTION AND EXPO MOVING FORWARD

AADA CEO SEN. DAVID VAN JAMES VOORTMAN SEN. DEBORAH O’NEILL

SENATORS TO HEADLINE AADA FEATURE SESSIONS ON THE AUTOMOTIVE CODE + LESSONS FROM HOLDEN RESPECTED VETERAN TO HOST ONLINE CONVENTION www.automotivedealer.com.au PRINT POST 100019106 Change lanes to MTAA Super

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CONTENTS ISSUE 32 | SEPTEMBER 2020

WELCOME From The AADA Chairman...... 5 From The AADA CEO...... 5 AADA 2020 VIRTUAL CONVENTION & EXPO FEATURE CONTACT AADA AADA 2020 Moving Forward...... 10 PO Box 4409, AADA Welcomes David McCarthy, Respected Veteran, To Host Online Convention ..... 11 Kingston ACT 2604 Senators Headline Feature Sessions...... 12 CONTACT AUTOMOTIVE DEALER Connecting With The New Digital Car Buyer...... 13 936B Glenhuntly Rd, Caulfield South, VIC 3162 AADA 2020 Workshop Program - Everything You Need To Know in 15 Minutes...... 14 Issue No. 32 | SEPTEMBER 2020 Virtual Expo To Deliver Real Solutions...... 15 PUBLISHER: AADA Notice Of Annual General Meeting Of AADA Ltd...... 20 MANAGING EDITOR: Luke Prendergast COX AUTOMOTIVE FEATURE PRODUCTION MANAGER: Stace Agombar There Is A New Player In Town...... 16 CREATIVE DIRECTOR: Nick Murphy Buy Cars 24/7 With Manheim Online Bid Online From Anywhere, Any Time...... 17 ADVERTISING MANAGER: Geoff Vine Dealer-auction.com.au Launches In NSW...... 18 [email protected] Choosing The Best Type Of Digital Ad During COVID Times...... 19 Mobile: 0408 189 295 FEATURES Phone (03) 9576 9944 | Fax (03) 9576 7277 AADA Leads Attack On GM At Senate Inquiry...... 6 AUTOMOTIVE DEALER DELIVERY/CHANGE OF ADDRESS New GM Brand ‘Unthinkable’...... 22 (03) 9576 9944 or Fixed-Price Sales Model Concerns...... 23 [email protected] Government Changes To Franchising Code Penalties ‘Weak’...... 25 EDITORIAL Government Releases Its Response To The 2019 Franchising Code Review...... 26 [email protected] News Flash - There’s A Recession Happening... But It’s Not The One You Know About...28 EDITORIAL & ADVERTISING OFFICE 936B Glenhuntly Rd, Fairness In Franchising: Government Response...... 31 Caulfield South, VIC 3162 AADA Proposes Four-Point Budget Plan...... 33 Reform, Then Abolish LCT...... 35 Luxury Car Tax Threshold Rises...... 36 ASIC Intervention Risks Further Damaging Automotive Industry...... 37 JobKeeper, JobTrainer And Continuation Of The Modified Award...... 39 No responsibility is accepted by the publisher Are You Prepared? JobKeeper Compliance Reviews And JobKeeper 2.0...... 40 for the accuracy of information contained in advertisements in the Automotive Dealer Crenno Signs Off...... 42 magazine. Publication of any advertisement does not constitute endorsement by the publisher Concern Over Electric Grey Imports...... 44 of any product, nor warrant its suitability. Advertisements are published as submitted by Governments Failing On EVs: Report...... 45 advertisers. Over 150,000 Faulty Takata Airbags Still On Roads...... 48 COPYRIGHT No part of this magazine may be reproduced Recycling/End Of Life Stewardship...... 49 without the publisher’s written permission. Combine Powerful Free & Paid Tools On Facebook CONTRIBUTORS The views expressed in Automotive Dealer by For Your COVID-19 Dealership Strategy...... 50 external contributors and advertisers are not necessarily those of AADA. Carsales Automotive Industry Support Totals More Than $30m...... 53 Academic Research On Franchising In The Australian Automotive Industry: AUSTRALIAN The Research Team Seek Your Input...... 54 @AADA_ASN AUTOMOTIVE DEALER ASSOCIATION Maintenance - It’s Not Just For Vehicles...... 55 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 as compassionate business people. Part of our deal or a story about a member of your staff who Whatever the story you have, it will be good strategy is to remind the media, politicians and recently accomplished a notable feat. reading. Send us the information and key 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. Frustrated with your ﬁnanciers?

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FROM THE AADA CHAIRMAN affected, to support politicians who will by overseas multinational corporations. We commit to never again allowing these types of deserve better. Terry Keating disruptions to occur. AADA Chairman In this regard we are heartened by discussions A strong new car industry is good for business, we have held with the NSW government about good for employment, good for investment revisions to their state franchise legislation. and contributes significantly to state and federal revenues. Having said that, I stress that not all of our t is pretty hard to find much positive news OEMs take advantage of weak laws that seem in our industry at the moment. All of that looks a long way back in our rear to regard non-binding conciliation as a dispute I vision mirror at the present time. solution rather than mandatory binding A succession of state premiers appear arbitration. determined to make the road to recovery as However, those of us old enough to recall our difficult as possible with unnecessary border last recession, some 30 years ago, will also Finally, I remind you we have called closures and in the case of Victoria almost total recall things do recover and we ultimately for nominations for board positions in closure of business. make it through. Queensland, Victoria, the Australian Capital Territory and the Northern Territory. Results Our members in that state face a very I trust this time will be no different. of any voting outcomes will be announced at uncertain future. I hope they all survive but our next AGM, which due to travel restrictions Given our current fiscal environment, the sadly some may not. will be an online video event. recently amended franchise regulations are I recommend our members in all the worst wishy-washy at best and do little to give The notice of AGM and instructions on affected states remind their staff and their equality to Australian family-owned businesses registering or authorising a proxy can be found customers, many of whom would be equally that are treated in some cases with scant regard be found on page 20 of this publication. FROM THE AADA CEO Dealers operate, allows for the continuation of Also, currently in progress is the NSW State a power imbalance that favours large offshore Government review of the Motor Dealers James Voortman Manufacturers, at the expense of Australian and Repairers Act, Part 6 of which seeks to AADA CEO owned and operated businesses. Dealers protect Dealers from unfair contract dealings directly employ nearly 60,000 Australians and by Manufacturers. This is the only state-based tens of thousands more in related industries, legislation of its type and all NSW Dealers while collectively their investments represent should be aware of this important piece of sums of money orders of magnitude greater legislation. he matter of franchise relations between than those of the Manufacturers’ Australian Dealers and Manufacturers continues operations. As an organisation, the AADA is strongly Tto dominate the landscape in which we supported and guided by the AADA Board, work. Through our work we have achieved some delegates to the AMDC and many members promising progress, but we believe Dealers who contribute to the cause, all of who give As an organisation, the AADA has continued deserve better and there is more to be done. their time voluntarily to help us achieve our to push for regulations that grant Dealers goals. In the coming months, it is critical to a fair go. We have worked across multiple Despite the challenges, there are still our ability to succeed that Dealers remain fronts providing information and data to both opportunities ahead for improvements to be united and at every opportunity, or when sides of government, regulators, government made to Dealer/Manufacturer relationships. called upon, provide representation on behalf departments and other industry stakeholders. The Federal Government is yet to decide upon of all within the industry to their local MPs Through countless submissions, letters and several important issues including provision and government officials. media releases we have sought to create a of a set of principles designed to better protect better understanding among non-industry Dealers, a review of unfair contract terms in In the six years since its creation, the AADA decision makers about the importance of Dealer Agreements and most recently, a Senate has delivered many positive outcomes for Dealers to the economy and the extreme inquiry into the relationship between car Dealers, however, the most important are yet duress that they are subjected to by many of Manufacturers and their Dealers. This follows to come and it will take all of us pulling in the their Manufacturer franchisors. on from another Senate inquiry, still under same direction to get the legislative protection way, into General Motors Holden Operations we deserve. To us, it just makes no sense that the current in Australia. legislative framework under which franchised

automotivedealer.com.au | SEPTEMBER 2020 | 5 FEATURES Australian Automotive Dealer Association

Inquiry

AADA LEADS ATTACK ON GM AT SENATE INQUIRY

ADA CEO James Voortman has led a allegations against General Motors. Other chorus of criticism of the way General witnesses included Inverell Holden Dealer AMotors has handled the Holden Mark Palmer, who said he believed Holden brand’s withdrawal from the Australian had planned to leave Australia for some period market, testifying before a Senate Inquiry last before the announcement, as well as two month. Government Departments, interim CEO of Holden, Kristian Aquilina, the MTAA, ACCC, On Monday 3 August, the Senate Committee AAAA and the FCAI representing the OEMs. conducting the Inquiry into General Motors’ Click to watch James Voortman's Holden Operations in Australia held its public Mr Voortman informed the Committee about submission to the inquiry hearings. Mr Voortman was the first witness to the existing power imbalance between OEMs give public evidence and used the opportunity and Dealers, and warned about the dangerous to push for stronger protections for franchised precedent that the Holden example set for the “GM seems to be a law unto itself and new car Dealers. rest of the industry. He also explained that key the epitome of a large, powerful, offshore elements required to level the playing field multinational using its position of power to The Australian Competition and Consumer include mandatory and binding arbitration exploit the smaller businesses it deals with. Commission (ACCC) in its appearance as well as the need to provide adequate It has set an incredibly dangerous precedent confirmed it was following up Dealer compensation. and, in the process, it has emboldened other vehicle Manufacturers to exploit the imbalance

6 | SEPTEMBER 2020 | automotivedealer.com.au FEATURES Australian Automotive Dealer Association

of power that exists between them and their Mr Voortman raised the question of when It is clear that all Holden Dealers are entitled Dealers,” Mr Voortman told the Senate General Motors knew it would be winding up to fair and reasonable compensation. But, Committee. its Australian operations and said it had been unfortunately, GM, a company which “reckless” in allowing Dealers to continue with earns revenues of $200 billion a year, has “When GM announced it was retiring the expensive infrastructure investments. embarked on a process which has denied Holden brand, it terminated some 185 Dealers Dealers fair compensation. It has simply in the process and many of these Dealers had “That is a very important question because, refused negotiation and pushed back against represented Holden for generations, some for within recent months, Dealers have been entering mediation, only agreeing when the over 80 years, and played a major role in the investing significant sums of money in capital ACCC applied pressure. It thumbed its nose success of the brand. In return for the right to expenditure programs that GM asked them to at Minister Michaelia Cash's call for it to sell their cars, Dealers were required to make do. There are also instances where dealerships extend its compensation offer and participate significant investments in state-of-the-art have changed hands in a sales process, and all in arbitration and it has pressured Dealers facilities, modern servicing equipment and of those were approved by General Motors by dangling future servicing work in front of tools, staff, software and the list goes on. These because it is a condition of every franchise them and explicitly threatening the prospect of investments, which often run into the millions agreement that they approve those sales,” he a lengthy and costly court battle.” of dollars over the course of an agreement, said. were made in response to commitments from Mr Voortman said the General Motors GM—commitments that it would be here for “Months before the announcement, GM example would embolden other OEMs in their the long haul, commitments that it would be was signing off on the sale of dealerships. It relationships with Dealers, highlighting the bringing in new models to support this vision was allowing Dealers to continue with very recent moves by Mercedes-Benz and Honda and commitments enshrined through Dealer expensive capital expenditure programs which to investigate a shift to set-price models, and agreements, all of which were subsequently it had demanded. GM's actions in allowing reinforcing AADA’s desire for a stronger, breached when it announced it was leaving this level of investment by Dealers was industry-specific franchise code. Australia in February.” incredibly reckless and there is no doubt it has harmed many businesses and their employees.

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“As we speak, I am hearing of a number of statutory obligations. GM does not have a Labor Senator Deborah O'Neill said Australian Honda Dealers that have been terminated, and good track record in this area, which is why Holden drivers “would be absolutely stunned I'm told the Japanese car company has engaged it is currently subject to a court enforceable to think that General Motors are acting in this in aggressive tactics in its compensation undertaking with the ACCC, although this heavy-handed way with Australian businesses”, process. Mercedes-Benz has already said it will was signed by the previous limited company. and grilled Bruce Wilson, Head of Division, be changing its distribution model in 2022 and As a sign of good faith, GM should extend this Industry Growth, Department of Industry, will not be compensating its Dealers,” he said. undertaking beyond its expiry at the end of Science, Energy and Resources, about 24 this year.” unanswered emails from Holden Dealers to “Recently, one of its global executives told Minister Karen Andrews over three months. the media that it would be moving to this Mr Voortman urged the committee to model in Australia because the law allowed it, examine the way in which Dealers were Mr Aquilina described the decision to whereas in other markets, such as in the US, misled, to look at GM's behaviour since the withdraw as “sad” and said that “everyone at the law does not allow it. We have seen other announcement and the way it had compelled Holden and General Motors is hurting as a Manufacturers start inserting clauses into their Dealers to accept inadequate compensation, r e s u l t ”. Dealer agreements which state that a Dealer consider the wider power imbalance that exists can be terminated for any reason and, in the between Dealers and Manufacturers and make He denied the decision had been made well event of that termination, they will not be recommendations to remedy this imbalance. in advance of the February announcement, compensated. Finally, it should also ensure that GM fulfils saying he had been informed only three days its warranty and parts supply obligations to prior. He admitted he had been “feeding into “For some time, the industry has been calling the many Australian consumers with Holden that process” since December 2019, but said for stronger regulatory protections to govern vehicles. it would have been inappropriate to advise the relations between Dealers and offshore anyone external to the company at that point, Manufacturers. The Holden example is further Committee member, Labor Senator Don and rejected the claim GM had acted in bad proof that the existing franchising code Farrell asked Mr Voortman about what faith. remains impotent and grossly inadequate in he described as “a thinly veiled threat” Mr protecting Dealer interests. You need look Aquilina had made on 9 June – the day Mr Palmer said that while it might be true that no further than the US, for example, where mediation was to begin – to give service 90 per cent of Dealers accepted the agreement Dealers are afforded appropriate protections. business to operators other than Holden by the deadline of 30 June, two days prior to I cannot overemphasise the level of urgency Dealers. that 176 Dealers were still ready and willing to with which such regulations need to be proceed towards litigation. put in place. In particular, we need a better “That was truly an incredible statement “The fact that that fell away so desperately in system to resolve disputes, with a system of because of when it was made,” Mr Voortman the last two days indicates the pressure that binding arbitration when mediation fails. This said. “It started with the Dealers, who were was on them, some of it financial, to take the should be the central recommendation of this about to enter that mediation, reading offer. Then there was—I think many Dealers inquiry.” that Holden was discussing giving their servicing contracts to independent repairers. will readily admit this—FOMO, fear of Mr Voortman pointed out that GM Holden It needs to be remembered that automotive missing out, and, once the numbers dropped had changed its corporate structure in Manufacturers provide the training, systems away, their deemed cost of litigation frightened October last year from a limited company to and special tools to service these cars, but them, so most of them took the offer,” he said. a proprietary limited company, and said it here they were, on the morning of mediation, “One of my very good friends and colleagues was important to gain an understanding of suggesting that they had options and that has openly stated to me, in the one and only how that would affect the liability of General they could go elsewhere. It was a thinly veiled time he's been able to speak to me since 1 Motors Holden going forward. threat, as you said, and it undermined the June—we used to talk all but daily—that he mediation. “This is important for the Holden Dealers hates himself for accepting the offer, so strong, who have not yet settled with Holden and “The other thing they did on that morning in my opinion, was the pressure from General are considering legal action; however, it has was to go on the ABC and proceed to say that Motors Holden.” wider importance, because GM has ongoing the Australian Holden Dealer Council's legal Mr Palmer said Dealers were never afforded obligations to the owners of its vehicles and team was just trying to drag this to court and the opportunity to engage in two-way dialogue to the Dealers servicing these vehicles. It to drag out the process in order to make more and communication with GM, and that “in needs to honour its Australian Consumer money. So that was on the morning that they any correspondence that I've had with General Law obligations and honour its recall and were about to meet with the Holden Dealers Motors Holden the offer was not negotiable”. warranty obligations and guarantee the supply and with their legal team, who they had just of parts. It should demonstrate what funds it trashed in the media. That just sums up this The Senate Inquiry is scheduled to deliver its has set aside to honour these commitments, whole process and how little credibility they report into Holden on 12 November, 2020. particularly under the obligations its parent have when it comes to determining whether company has under US federal law and certain they engaged in a good-faith process.”

8 | SEPTEMBER 2020 | automotivedealer.com.au Free* Online Event - 10-11 November

MOVING FORWARD

JOIN AADA HOST, DAVID “MACCA” McCARTHY, AT THE FIRST-EVER AADA CONVENTION & EXPO VIRTUAL EVENT FEATURE SESSIONS INCLUDE... CONNECTING WITH THE NEW DIGITAL CAR BUYER FULL VIRTUAL EXPO PLUS.. THE AUTOMOTIVE CODE + LESSONS FROM HOLDEN THE FRANCHISE RELATIONSHIP COVID-19 DEALER PERFORMANCE COMBATTING MARGIN COMPRESSION ...AND SO MUCH MORE

This FREE* Online Dealer Event is a must attend for:

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*Event registration is complimentary for dealership attendees only. AADA 2020 VIRTUAL CONVENTION & EXPO FEATURE Australian Automotive Dealer Association

Free* Online Event - 10-11 November

MOVING FORWARD

AADA 2020 MOVING FORWARD

he COVID-19 pandemic has made the pre-owned market, and an examination automotive leaders can engage in the pressing large gatherings such as the annual of the factors that connect with consumers in matters of this dynamic $56 billion industry. TAADA National Dealer Convention today’s digital world. & Expo impossible to hold at this time, but Designed to meet the challenges of today’s that doesn’t mean AADA is not still going to The year 2020 has seen the Australian business and market circumstances, the provide an event for Dealers to learn from automotive industry endure unexpected "AADA 2020 Moving Forward" schedule of industry leaders and experts, and explore challenge. The known landscape is changing, sessions covers all corners of the franchised the latest strategies, products and services to and franchised new car Dealers face complex Dealer business and the advocacy issues facing drive their dealerships into the future. developments in regulatory and structural our industry. The schedule of events ensures change to their operations. These include their that dealership leaders are able to select the It might feel like things are at a standstill at the franchise arrangements, the personnel they sessions that cover their area of responsibility moment, but in business as in life, we must invest in and their sales funnel. and interest, covering all bases and aspects of keep moving forward, and that is the theme dealership operations. of the new virtual AADA Convention & Expo Ever since the internet became a part of our event to be held on Tuesday 10 & Wednesday lives 25 years ago, people have used it to learn, The live program will be conducted over two 11 November 2020. research, and increasingly, to buy. That has mornings and will include the Annual General only accelerated with the enforced closure of Meeting of the Australian Automotive Dealer “AADA 2020 Moving Forward” is a totally ‘non-essential’ businesses during these difficult Association. online event – free for dealership personnel times. The businesses that not only accept the and with a modest fee for allied and other current conditions, but embrace them and Now, and moving forward, consumers are industry delegates – that will provide Dealers educate themselves on how to use them to utilising the convenience, time-saving, and with all the benefits of our traditional annual their advantage will be the ones that emerge wide range of options provided in the online Convention & Expo. with the advantage. They will be the ones environment. "AADA 2020 Moving Forward" ‘moving forward’. provides Dealers and their staff with a golden This unique and important event will deliver opportunity, at no cost, with no travel, and two days of elective activity for franchised The annual AADA National Dealer minimal time invested, to take advantage of dealership management in all key areas Convention & Expo is always a highlight of the those conditions to benefit themselves, their of operations, featuring live sessions and retail automotive calendar, delivering countless staff and their dealerships, and come to grips engaging content delivered by key industry learning and networking opportunities, with the new business paradigm. speakers. Featured sessions will include motivation, inspiration and ideas. "AADA discussion on COVID-19 business dynamics, 2020 Moving Forward" will do all that, in a There is no going back. There is only Moving franchise relations, the online environment, two-day elective program in which franchised Forward.

10 | SEPTEMBER 2020 | automotivedealer.com.au AADA 2020 VIRTUAL CONVENTION & EXPO FEATURE Australian Automotive Dealer Association AADA WELCOMES DAVID McCARTHY, RESPECTED VETERAN, TO HOST ONLINE CONVENTION

MOVING FORWARD

ADA is thrilled to announce grounded knowledge and passion to "AADA world, increase their throughput and leverage automotive industry veteran David 2020 Moving Forward". their staff.” A“Macca” McCarthy will host the “AADA 2020 Moving Forward” virtual David understands the challenges facing The last time David bought a car he conducted Convention & Expo event. the retail automotive industry in the current all his research online, decided on the specs uncertain economic environment, and is a big and colour he wanted, and emailed several Now a Consultant and Industry Expert with believer in the power of online. Dealers telling them what he wanted and Civic Financial Communications, David has a asking for their best price. He believes more huge passion for the automotive industry, built “No one knows where we are or where and more consumers will do the same and over a lifetime of involvement. we’re going at the moment. What is the new connect differently in the future. normal? The only way to prepare for the new His father was an engine re-conditioner, while normal is to be alert and do your research. “I think the future is bright, but Dealers need David began selling cars at a multi franchise The consumer role is changing and online to not be blinded by what they’re seeing. The dealership in 1981. He then built a reputation shopping is becoming more prevalent,” he said. need to use logic and do their research,” David as a respected automotive journalist in radio, said. print, TV and digital media, before spending “It’s going to change really quickly. This twelve years heading up the Public Relations pandemic has got people used to buying “I want to help Dealers see what the future and Communications team at Mercedes-Benz online, doing price comparisons online, and holds, so they’re informed and can make Australia Pacific, reporting directly to the click-and-collect. We want to help Dealers decisions about their business. Information is CEO. understand what the future holds. All the power – the power to make decisions – and paradigms are changing. We understand when you don’t have information, you make Chairing the FCAI Communications what is of value to them and they can’t find it bad decisions.” Committee for four years and serving as a anywhere else. Board member rounded out David’s twelve AADA looks forward to David bringing all his years of hands-on engagement with industry “Dealers need to be smarter and reduce their experience, knowledge and passion to "AADA issues. Known for his advocacy and robust costs. Not by cutting their staff, they’re their 2020 Moving Forward". views in particular around the LCT and the biggest asset. They need to review how their use of genuine parts, David brings a well- physical footprint translates to the digital

automotivedealer.com.au | SEPTEMBER 2020 | 11 AADA 2020 VIRTUAL CONVENTION & EXPO FEATURE Australian Automotive Dealer Association

MOVING FORWARD

SENATORS HEADLINE FEATURE SESSIONS

ADA 2020 Moving Forward will Mr Voortman recently testified at the Senate AADA has a long history of engagement with include a series of feature sessions, Inquiry into Holden, a committee of which both sides of politics. Our annual Convention Adelivering high quality content Senator O’Neill was a member, showing regularly features talks and sessions from on subjects of importance to the retail great interest in and support for the need for sitting Ministers and Members of Parliament, automotive industry. a stand-alone code. This session will update as well as former Prime Ministers, Treasurers Dealers on the latest progress on the issue. and other high-ranking politicians. In “The Automotive Code – Lessons From Holden”, AADA CEO, James Voortman, and Balancing the political ledger, Liberal Senator AADA does an incredible amount of advocacy Labor Senator, Deborah O’Neill, will discuss David Van will deliver a session on “The for members with politicians on a federal and what the industry and the government have Franchise Relationship”. A former managing state level, and their ongoing support for our learned from General Motors’ departure from director of PR firm the De Wintern Group, events is indicative of the impression we are Australia, and how that can help shape a better, Senator Van was also a board director of the making in the halls of parliament. fairer Code of Conduct legislation, designed Australian Association of Franchisees. specifically for the franchised Dealer industry. It promises to be a highly informative and These interrelated subjects are vitally entertaining program with many valuable important for Dealers in the current economic takeaways for Dealers and key personnel. climate, and will shape the retail automotive model for years to come. 12 | SEPTEMBER 2020 | automotivedealer.com.au AADA 2020 VIRTUAL CONVENTION & EXPO FEATURE Australian Automotive Dealer Association

CONNECTING WITH THE NEW DIGITAL CAR BUYER

DRIVING COVID-19 AUTO SALES WITH THE TRUST, REPUTATION, AND SCALE OF THIRD-PARTY SITES

n a profound shift for our industry, the third-party global research agency BrandSpark • Which consumer behaviours and COVID-19 pandemic has accelerated to undertake a new local market research attitudes have changed due to COVID-19, Ithe transition to digital vehicle sales and study to better understand the Australian car and what dealership staff can do heightened the importance of effective virtual buyer. The survey canvassed an Australian operationally to manage these changes. showrooms. In this not-to-be-missed keynote national panel to ensure the responses were research presentation on the behaviour of unbiased and representative of the Australian Preliminary findings from the research car buyers, Autotrader and Gumtree Cars national car buying audience. include: will share the results of an in-depth Digital • Australia’s economic outlook has Influence Study into new and used vehicle The research focused on the consumer car not greatly impacted car purchase shoppers and recent vehicle purchasers. shopping journey, including the role of digital marketplaces on influencing auto intender consideration among consumers, with Conducted in September 2020, the new research, consideration, and the facilitation most intenders still actively looking to buy; survey will deliver the latest insights into of new connections between car buyers and • Where COVID-19 has impacted the consumer needs and behaviours across online dealerships. vehicle shopping process, the most marketplaces, empowering Dealers to optimise common result has been a delay in their approach and increase sales following This is a must-attend presentation where purchase timing; six-months of COVID-19 restrictions. Richard Dealer delegates will learn: Dicello, Dealer Sales Director, Autotrader • The role third-party sites play in guiding • COVID-19 has brought forward a new and Gumtree Cars, and Denis Hancock, the auto intender purchase journey, and segment of shoppers who are seeking VP Strategy, BrandSpark International, will how Dealers can best position themselves a vehicle specifically because of the present the findings of the research designed for success; pandemic. to identify and contrast new, demo and used car buyers – showcasing a complete overview • How open platform classified sites shape Don’t miss this pivotal presentation from of the car buyer universe. auto intenders’ behaviours and attitudes, our Principal Sponsor. You’ll walk away with including practical merchandising tips practical insights and knowledge on how to Building on the Autotrader ‘Connect’ and and best practice examples for Dealers; connect with car buyers in 2020 and beyond. Gumtree Cars ‘Connecting the Disconnected’ The future success of your business and team Research in 2019, Autotrader and Gumtree could depend on it. Cars together commissioned

automotivedealer.com.au | SEPTEMBER 2020 | 13 AADA 2020 VIRTUAL CONVENTION & EXPO FEATURE Australian Automotive Dealer Association

Free* Online Event - 10-11 November

ime is of the essence. We understand your time is valuable, and we want Tdelegates to get the absolute most they can out of "AADA 2020 Moving Forward". To that end, the AADA Workshop program will provide an abundance of solutions under the banner “Everything You Need To Know In 15 Minutes”, because – you guessed it – they will run for 15 minutes each.

These live workshops will be scheduled outside of the morning session program, giving all attendees the opportunity to connect and interact with each other, and discuss the issues facing dealerships and the solutions on offer from our Expo partners. all queries either during or after each session. Attendees will have the ability to view and Private messaging functionality between download handouts, view bios and synopsis of Our state-of-the-art interactive online audience and speakers means every delegate presentations. platform will allow delegates to participate in query will be followed up and answered. a live, Q&A with presenters, who will answer Simple. Straightforward. Comprehensive. Everything you need to know. In 15 minutes.

14 | SEPTEMBER 2020 | automotivedealer.com.au AADA 2020 VIRTUAL CONVENTION & EXPO FEATURE Australian Automotive Dealer Association

VIRTUAL EXPO TO DELIVER REAL SOLUTIONS

feature of the annual AADA National services, webinar scheduling and premium An investment in the AADA Virtual Expo Dealer Convention is the Expo, and with advertising packages in this dynamic, cost- will provide participating companies with Athis year’s online “AADA 2020 Moving effective industry event. a platform in Australia’s largest gathering of Forward” we will present a comprehensive automotive leadership in 2020. “Virtual Expo” of vendors’ products and The "AADA 2020 Moving Forward" Virtual services in an engaging expo hub. Expo will feature the latest in technology, The "AADA 2020 Moving Forward" virtual services and products that every new car Dealer event will attract leadership from all dealership The AADA Virtual Expo hub will house a needs to maximise the valuable new profit departments. library of downloadable information and opportunities presented by a challenging and content for meaningful dealership interaction, shifting market. The AADA Virtual Expo will provide an allowing delegates to explore and investigate online platform to showcase product and the latest technology, techniques, products and Today’s automotive Dealers rely on third-party service offerings in a friendly, inviting, business services to help their business move forward solutions and partner providers to add business environment. Exhibitors will be able to build into the future. Exhibitors will be able to track profitability. The AADA Virtual Expo is a one- their own expo offering inside an advanced participation and potential prospects through stop-shop exposing Dealer leadership to the multi-channel program, using display and our virtual expo software solution. wide range of solutions on offer. communication tools, including webinar and appointment-setting tools. Registration for Virtual Expo is completely The AADA Virtual Expo will see participation complimentary for "AADA 2020 Moving from many major international companies This is a limited opportunity for product and Forward" Dealer personnel delegates. showcasing offerings from around the globe, service providers to book expo space in the providing delegates with the opportunity to AADA Virtual Expo and present their products Sponsors and expo participants will enjoy learn about the latest products and services and services to Australian franchised new car unique opportunities in terms of brand designed to help drive their dealerships forward. Dealers. association, showcasing of products and

automotivedealer.com.au | SEPTEMBER 2020 | 15 COX AUTOMOTIVE SPONSOR FEATURE Australian Automotive Dealer Association THERE IS A NEW PLAYER IN TOWN.

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s the automotive industry assesses the Buyers who need the certainty of guaranteed impacts of COVID-19, more and more purchases will find selected BidNow vehicles ADealers are embracing online sales are configured to offer a premium BuyNow channels as part of their used car inventory price so the vehicle can be purchased without acquisition strategy. It’s no surprise a digital waiting for the online auction to close. sales solution like Manheim Online has never been more popular or important. Vehicles listed in BidNow auctions on Manheim Online are located right around Manheim Online gives Dealers exclusive Australia and are graded according to a star access to a variety of good quality stock rating, which is based on the vehicle condition. in timed, online BidNow auctions. It also The ratings are, from highest value to lowest, sell whenever they need from wherever they provides the convenience of being able to bid Prestige, Platinum, Gold, Silver and Bronze. are. He also said the importance of being able and buy vehicles 24 hours a day, 7 days a week to buy with confidence when buying online so Dealers no longer have to wait for physical Manheim spokesperson, Mathew McAuley, was vital, with a Manheim Condition Report auctions to purchase stock. said Manheim understand in the current conducted by qualified Manheim Inspectors climate it’s more important than ever to offer and available online for every car listed to help Dealers an online sales channel to buy and Dealers know what they’re buying.

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ox Automotive has expanded their newest “Franchised Dealers can now offer stock to stock acquisition and disposal platform qualified trade buyers, while independent Scott Allen Cfor Dealers, announcing the launch of Dealers and qualified wholesalers have exclusive Dealer-Auction.com.au into New South Wales. access to previously unavailable franchise Head of Dealer, Dealer stock, offered in time based online Manheim After a successful launch in Queensland auctions that can run 24/7, 365 days a year.” Australia and last year, feedback on the platform has been Dealer-Auction. extremely positive, with buyers and sellers alike Dealer-Auction.com.au is supported by a team com.au recognising the need for the wholesale digital of motor industry professionals with extensive solution which Dealer-Auction provides. dealership experience, who support buyers and sellers throughout the entire process. More and more Dealers are embracing online Head of Dealer for Manheim Australia and Specialist negotiators even help to close sales sales channels as part of their wholesaling and Dealer-Auction.com.au, Scott Allen, said the on vehicles that don’t meet reserve. stock sourcing strategy so, especially as the digital sales platform became an even more automotive industry assesses the impacts of popular alternative to traditional vehicle Mr Allen said the benefits to franchised COVID-19, a digital only solution such as the wholesaling during COVID-19 disruptions. Dealers and trade buyers in NSW include Dealer-Auction platform has never been more the fact it is a trade-only marketplace with an pertinent. “With this expansion both franchised and annual subscription fee of $200 plus GST and wholesale Dealers in NSW can now take a fixed sale fee of $100 plus GST per vehicle. Registrations are now open and the Dealer- advantage of this proven online auction There are no buyer fees. Auction team are looking forward to platform,” he said. welcoming Dealers on board. Dealer-Auction now supporting dealers in NSW and QLD List your wholesale stock in online auctions 24/7, 365 days a year

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18 | SEPTEMBER 2020 | automotivedealer.com.au COX AUTOMOTIVE SPONSOR FEATURE Australian Automotive Dealer Association CHOOSING THE BEST TYPE OF DIGITAL AD DURING COVID TIMES

his new ‘normal’ brings a new your website. Google Ads are perfect if you ads run across Facebook and Instagram to opportunity for Dealers to streamline want to increase your website traffic and overall reach customers and send them directly to Ttheir marketing efforts into digital enquiry volume – quickly. Since Google Ads use the vehicle details page on your website. This adverts to reach a wider audience with the ‘intent marketing’, you can use them to reach powerfully targeted form of advertising is added benefits of tracking – so as a Dealer, people who are interested in your vehicles or all about getting engaged eyeballs on your you know if the dollars you are spending on services and drive them to your Dealer website. inventory which leads to more sales. advertising are delivering results. Google Display Ads YouTube Ads The team of Digital Strategists at Digipurple, Dealer Solution’s digital agency, are offering ano- Google Display Ads allow you to advertise Did you know that YouTube is the number one obligation brainstorming session to help you your sales on websites that are relevant to your video site for influencing purchase decisions? get started. They have also shared the following dealership and reach customers based on their And with over 20 million Aussies using insights about some of the types of digital ads interest. Put simply, when you want to build YouTube every single month, pre-roll ads are available to you and when to use them: awareness, consider this the most targeted perfect for building awareness and reaching billboards out there, which will reach people car buyers with your sales promotions…just Google Ads who actually want to see it and will remember like TV only targeted. it; for a fraction of the price of a newspaper ad. These ads are incredibly targeted and only Interested? appear for keywords that are relevant to your Facebook Automotive Inventory Ads dealership, and you only pay when some clicks Reach out to the team at Digipurple via on your ad. So, you’re not just reaching a relevant FB AIA are dynamic and are generated directly digipurple.com.au/brainstorm to get your free audience but only paying when they come to from your dealership’s actual inventory. These strategy session.

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Interested? Book your no-obligation brainstorm session with our team of digital strategists and let us show you what Digipurple can do for your dealership. We work with Sam at Digipurple to increase awareness“ of our sales events through paid search, Book Now > Google Display and Facebook and drive high quality leads and foot traffic.” - Sydney City Volkswagen & ŠKODA NOTICE OF ANNUAL GENERAL MEETING OF AUSTRALIAN AUTOMOTIVE DEALER ASSOCIATION LIMITED ACN 167 598 085

Dear Member,

This is to advise you of the upcoming annual general meeting of the members of the Australian Automotive Dealer Association Limited. The details of this meeting are as follows:

Date: Tuesday, 10 November 2020 Time: 2.30 pm Place: ONLINE CONVENTION (Due to Covid-19 and pursuant to Covid-19 emergency legislation this year’s AGM will be conducted electronically by live video conferencing during the online convention)

At the meeting, members will be asked to consider and vote to: • accept the annual report • accept the director’s report • accept the auditor’s report • accept the annual financial statements • accept the outcome of the election of directors

Regards,

James Voortman Chief Executive Officer

Click here to register your attendance at the AGM Members who are unable to attend can authorise a proxy here

20 | SEPTEMBER 2020 | automotivedealer.com.au NOTICE OF

ANNUAL GENERAL MEETING OF AUSTRALIAN 3 827 9 5 739 8 9 536 5 AUTOMOTIVE DEALER ASSOCIATION LIMITED Very friendly, ACN 167 598 085 Absolutely competitive love it, Brian and easy to Super happy was a legend. deal with. I with my Dear Member, Recommend would highly purchase! highly. recommend. This is to advise you of the upcoming annual general meeting of the members of the Australian Automotive Dealer Association Limited. The details of this meeting are as follows:

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PH: 1300 880 057 • www.snap21.com.au FEATURES Australian Automotive Dealer Association NEW GM BRAND ‘UNTHINKABLE’

n the wake of the decision by General “GM has burned so much goodwill after months before announcing it was dumping Motors’ (GM) to withdraw from the taking so much from Australian taxpayers, the Holden brand, General Motors changed its IAustralian market, AADA has expressed yet here they are about to start another corporate structure,” he said. concern over the company’s announcement business. After a decade of treating consumers, that it will be launching a new vehicle brand. businesses and the Government with “It is important to get to the bottom of these contempt, how can we have faith that GM will issues as GM will have significant liabilities in “The launch of General Motors Special change its ways?” Australia for many years to come. There are Vehicles (GMSV) poses many questions and it 1.6 million Holdens on our roads, the second seems unthinkable that shortly after ruthlessly Mr Voortman called for stronger franchise most of any brand. The Government needs dismantling the Holden Dealer network GM laws similar to those in the United States, assurances that General Motors has set aside can simply be allowed to launch a new brand,” pointing out that over the past two years the funds to honour consumer law obligations, said AADA CEO James Voortman. ACCC had successfully taken action against a pay warranty claims, complete safety recalls number of Manufacturers, while Honda and and supply vehicle parts. “GM remains in dispute with a number Mercedes-Benz are making significant changes of Dealers and most who have settled did to their distribution models. “The Senate Inquiry looking into GM’s so under duress, accepting the inadequate operations in Australia should strongly compensation on offer. Even a last minute “We know Senator Deborah O’Neill has consider calling GM back to answer more request from the Federal Government to settle written to ASIC asking them to investigate questions." the dispute through arbitration was rebuffed a potential phoenixing situation regarding by GM. GMSV. We also know that last year, only

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s Honda and Mercedes-Benz • compensation and reimbursement for Mr Voortman said the fixed-price model was continue to plan to shift to a set-price included services “very different to how Dealers operate these Adistribution model, AADA CEO James days”. OEMs would retain ownership of the Voortman has expressed concern to a Senate • vehicle servicing arrangements with vehicles with Dealers selling them at a set price Committee about the detrimental effect such Honda Australia and earning a commission on every car sold. a move would have on Australian Dealers. • arrangements for finance, insurance, oil, “There are various such models which are Honda has announced its intention to move aftermarket products, accessories being trialled around the world. It's a new to the fixed-price model as early as 1 July, thing Manufacturers are starting to do, and • territory boundaries, and 2021, while Mercedes-Benz is reported to be that is their right. They have the right to try planning to do similar from 1 January, 2022. • processes for termination and transfers of new models. They have the right to sell vehicles the Dealers’ businesses,” the ACCC said online. They even have the right in Australia The Australian Competition and Consumer in a statement. to sell directly, as they do in a number of cases. Commission (ACCC) on 16 September granted That's not in question,” he said. interim authorisation for the National Honda “In addition, interim authorisation is not Dealer Council Limited (NHDC) to engage in granted to permit entering into or giving effect “Their right to change their business model is collective bargaining with Honda Australia Pty to any binding agreements between any Dealers not in question; but, when they have engaged Ltd (Honda) on behalf of Honda Dealers. and Honda Australia as a result of collective partners and asked those partners to expend negotiations. The entry into and giving effect significant capital in distributing their product The authorisation, which ACCC will continue to binding agreements following collective and then they want to change that model, to review and receive submissions regarding negotiations will be considered as part of the we believe that it has to be done in a fair and before making a final decision, will enable the ACCC’s substantive authorisation assessment," transparent manner. That's all we ask. When NHDC and the Dealers to: the ACCC stated. models are changed, Dealers need to be compensated adequately. It's that simple.” • discuss and share information about “Interim authorisation commences the terms of the termination of existing immediately and remains in place until it is Mercedes-Benz has already dipped its toe into dealership arrangements between Honda revoked, the application for authorisation is the fixed-price model, offering the EQC electric Australia Dealers and Honda Australia, withdrawn, or the ACCC’s final determination SUV it launched late last year for sale online. comes into effect.” • discuss and share information about In a press release at that time, Mercedes- the proposed terms of a new fixed-price Testifying at the Senate Inquiry into Holden’s Benz set out its reasons for adopting the distribution model proposed to be withdrawal from the Australian market, Mr model, saying it would handle many of the entered into between Honda Australia Voortman took the opportunity to express administrative functions typically handled at and the Dealers, whereby Dealers would AADA’s concerns over the fixed-price model. the retailer level. deal with constomerd as agents of Honda Australia in some respects rather than in “We would argue that much of the investment “This will enable EQ agents to focus on their own right, and is undertaken by the Dealer. The Dealer has delivering optimal service, including creating the relationship with the customer, and they're a highly personalised handover experience for • commence collective negotiations with often taking the risks and creating the value in the customer,” the release said. Honda Australia in relation to the above the business. We think that really does need issues. Of the 64 Mercedes-Benz Dealers in Australia, to be considered when you are compensating nine were initially announced as participants your Dealers,” he said. Discussions between NHDC and the Dealers, in the program. More have since been and negotiations with Honda Australia may “An example is we currently have Mercedes- appointed, but have yet to be announced. cover terms and information including, but Benz looking at changing its model, and it not limited to: In the 2022 plans, Dealers will retain control of has said that it will not be compensating its parts and servicing, as well as used cars. • commissions Dealers as they embark on a new model. But you can't move away from the fact that there are The majority of Mercedes-Benz Dealers last • circumstances in which capital Mercedes-Benz Dealers who have taken a brand year voted against moving to the fixed-price expenditure by Dealers will be in a particular area from essentially nothing model. That didn’t stop the Manufacturer, reimbursed by Honda Australia and and grown it to the extent that it has a massive which invited Dealers to apply for roles in the the nature and calculation of that database of loyal customers. Many of these new model. reimbursement Dealers would also have bought dealerships themselves and paid goodwill. I think any Mercedes-Benz already has similar models • Honda Australia’s proposed ‘one price compensation process really does need to have already in place in Sweden and South Africa everywhere’ model for new vehicle goodwill as a central element to it.” and its German base is believed to be behind pricing the push for its adoption in Australia. “An Autotrader lead is a higher quality lead, these customers know our address, know our location and they know about our business so they’re further down the buyer journey and more qualified.” Tom Kennedy, General Manager Bigboxcars

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A SMARTER WAY TO TRADE AUTO FEATURES Australian Automotive Dealer Association GOVERNMENT CHANGES TO FRANCHISING CODE PENALTIES ‘WEAK’

he Federal Government has doubled the and voluntary binding arbitration, in to a process of voluntary binding penalties that apply for a breach of the addition to mediation arbitration. This is simply enshrining TFranchising Code, but AADA believes the process that occurred with GM in this response is still ‘far too weak’ to change • targeted improvements to disclosure, which you asked them to participate in anything. particularly those relating to supply arbitration. As was the case with GM arrangements, marketing funds, exit Manufacturers will simply refuse if it is AADA Chief Operating Officer Brian Savage arrangements and significant capital not in their interest. We understand that said “the penalties are still inconsequential and expenditure constitutional issues have been raised on provide no deterrent to unfair behaviour by this issue, but we would like to explore • a new mandatory Key Disclosure large offshore auto Manufacturers”. other ways of developing a more effective Information Fact Sheet to improve and dispute resolution process under the “Dealers will always be the junior partner in simplify upfront disclosure, highlight Code,” Mr Savage said. their relations with Manufacturers and they key information, and assist franchisees do not seek to prevent Manufacturers from to understand obligations and the risks • Require Manufacturers to fairly arranging their retail operations as they see associated with entering a particular compensate Dealers when they are fit. All we call for, is that Dealers be treated franchise agreement terminated, agreements are not renewed fairly when they make these changes and to be or distribution models are changed. • consultation on the development of a paid the compensation for the time, effort and “Since the Holden Dealers were public register of franchisors, to increase capital they have poured into these businesses,” terminated, clauses have appeared in transparency in the sector and increase Mr Savage said. agreements stating that Dealers have no the ability of prospective franchisees right to compensation even in the event The Government also strengthened to make an informed decision before of termination for no cause,” Mr Savage dispute resolution options, among a raft entering a franchise agreement, and said. of responses to the Fairness in Franchising • a franchising website to make it easier for Report conducted by the Parliamentary Joint • Contract terms that grant Dealers enough franchisors and franchisees, including Committee in March 2019. time to recoup their investment. This was prospective franchisors and franchisees, an option under the Regulatory Impact The Government’s key actions in response to to access information and support. Statement but did not transfer to the the Fairness in Franchising Report include: Mr Savage called for “three key elements” to final Government response. “It is crucial • doubling the penalties that apply for a make the Franchising Code fair for Dealers: for Dealers who are often investing breach of the Franchising Code large sums of money at the request of • Better dispute resolution process. “The Manufacturers,” Mr Savage said. • strengthening dispute resolution options Government’s response has committed through the introduction of conciliation

Register online at: www.dealer-auction.com.au Phone: 07 3368 9944 ™ Email: [email protected] FEATURES Australian Automotive Dealer Association GOVERNMENT RELEASES ITS RESPONSE TO THE 2019 FRANCHISING CODE REVIEW

nature of the expenditure to be provided; Information Statement Evan Stents Lead Partner, 3. Include a requirement to discuss, plan 5. To clarify that the Information Statement Automotive Industry and agree end of term arrangements if an (Annexure 2 of the Franchising Code) Group, HWL Ebsworth agreement is not renewed including for the must be provided to prospective Lawyers handling of capital intensive stock; and franchisees separately and prior to providing the disclosure document and 4. Expressly allow multi-franchisee dispute other materials. n 20 August 2020, the Australian resolution. Government released its long awaited 6. To amend the wording of the Information The Government further recognised that the Oresponse (Government Response) Statement in Annexure 2 to include automotive sector will further benefit from to the Joint Committee on Corporations reference to the ACCC's franchisee manual broader reforms to the Franchising Code, and Financial Services inquiry (Inquiry) and emphasise key rights and information. including the introduction of voluntary into the operation and effectiveness of the binding arbitration and increased civil 7. To amend the Information Statement and Franchising Code of Conduct report: Fairness pecuniary penalties for a breach of the use educational materials to help improve in Franchising (Report). Code. The Government also stated that it franchisee's understanding that if the The Government established an interagency will continue to work with the automotive franchisor becomes insolvent they may taskforce on 10 April 2019 to examine the franchising sector on the development of an lose the benefit of shared funds such as feasibility and implementation of a number of industry-led, principles based voluntary guide marketing funds. the recommendations made in the Report. to improve the transparency and fairness of agreements. 8. To amend the Information Statement to Whilst the Report identified examples warn a prospective franchisee of the need of conduct in the sector that were seen Key amendments to be made to the to obtain advice about restraints of trade as problematic, particularly in relation Franchising Code before entering into the agreement. to breaches of the Franchising Code, Non-financial disclosure 9. To amend the Information Statement to false and misleading representations and emphasise the importance of prospective unconscionable conduct, the Government did 1. To require a disclosure document to be franchisees understanding the Franchising not conclude those instances were widespread. made available both in electronic and Code requirements before entering into the hardcopy form. The Government recognised that it has agreement. already made changes to the Franchising Code 2. To make technical changes to clause 10. To amend the Information Statement specifically for the automotive sector which 13 of the Franchising Code to increase to advise prospective franchisees of commenced operation on 1 June 2020. These transparency about retail leases but also their obligations including relating to changes were to: to clarify that franchisors will not need to employment matters and compliance with provide documents they do not possess. 1. Require franchisors to give franchisees relevant laws. 12 months’ notice of a decision not to 3. To require a franchisor's interest in a Key Disclosure Information Fact Sheet renew an agreement, if the agreement leasing arrangement to be disclosed in the is for 12 months or longer, including a Key Disclosure Information Fact Sheet. 11. To amend the Franchising Code to require requirement for the franchisor to provide a franchisor to prepare and give to a a statement outlining why an agreement is Financial disclosure prospective franchisee a Key Disclosure not renewed; Information Fact Sheet containing 4. Amend the Franchising Code so that any prescribed financial and other information. 2. Strengthen conditions that prohibit financial information (such as earnings This may have important implications for franchisors requiring significant capital information) must be part of the disclosure Dealers as it may require distributor to expenditure from franchisees, including document and require disclosure provide specific information concerning the introduction of an obligation to documents to include a statement on the dealership business model. discuss expenditure prior to entering an the accuracy and appropriateness of that agreement, disclosure of the circumstances financial information provided by the Supply arrangements and rebates under which the franchisee is likely to franchisor. recoup the expenditure and specifying, as 12. To oblige franchisors to disclose far as practical, the amount, timing and information on supplier rebates, commissions and other payments and any FEATURES Australian Automotive Dealer Association

master franchisor controls and or rebates the dispute resolution process determines and advertising subject to civil penalties for from suppliers - this information may be it is appropriate to conduct a multi-party contravention. included in the Key Disclosure Information process the franchisor cannot refuse to take Fact Sheet. part in that process. Prohibit legal costs being passed on for issuing documents 13. To clarify that the cooling off period is End of term franchisee goodwill measured in calendar days and to clarify 28. Amend the Franchising Code to prohibit that the disclosure period must begin at 20. Amend disclosure requirements to ensure a franchisor passing on its legal costs of least 14 days before signing a franchise end of term arrangements for franchisee preparing, negotiating and executing agreement. goodwill are clearly specified. documents to the franchisee (unless it is already incorporated into a joining fee). It Cooling off periods - extended to 14 days 21. Require franchisors to clarify a franchisees will make that prohibition subject to a civil entitlement to goodwill in the franchise penalty provision. 14. To allow a franchisee to terminate the agreement and include this information in franchise agreement at any time up to the Key Disclosure Information Fact Sheet. 29. To consider making amendments relating 14 days after the last of certain events to retrospective variations to an agreement have occurred. Those events include the 22. After consultation with the sector, to by a franchisor. agreement being signed, payment being amend the Franchising Code to include made, disclosure documents being received provisions to facilitate a negotiated early Changes to dispute resolution provisions and if applicable a copy of the terms of the exit of the franchise agreement (that 30. Amend the Franchising Code to include lease being received. Determining when balances the rights and interests of the dispute resolution provisions similar to it commences and ends will need to be franchisor and the franchisee). the Dairy Code that relate to voluntary carefully determined. 23. To clarify what constitutes a breach of Arbitration. The Dairy Code was 15. To extend the statutory right to cool off clause 23 of the Franchising Code (and introduced in December 2019 and has a to a transfer of an agreement to a new increase prospective franchisees awareness dispute resolution provision that includes franchisee; where the transferee is required of the effect of restraints of trade). improvements to the mediation provisions to enter into a 'substantially new agreement' that are not currently in the Franchising 24. To make technical changes to clause 23 and with the franchisor. It will not be extended Code. It is likely that the Franchising Code monitor their effectiveness with respect to to renewals or extensions of agreements. will be amended to incorporate those restraints of trade. provisions for consistency. 16. Documentation for the sale of a dealership Special circumstances (immediate) will need to deal with this new cooling Many of the recommendations made termination to be subject to dispute off right, which is intended to benefit a in the Report will not be adopted by resolution purchaser. It may also delay completion of Government. Some of the proposed actions that Government have indicated they will a sale by a further 7 days as distributors will 25. To oblige a franchisor seeking to terminate adopt will have practical and commercial want to ensure the cooling off period has for special circumstances under clause implications that will need to be worked ended before the sale is completed and the 29 of the Franchising Code, to give not through by industry participants. Ultimately original dealership agreement will not be less than 7 days' written notice of the until the changes are finally drafted it is affected if the right to cool off is exercised. proposed circumstances so that a mediator difficult to say with certainty whether all of or arbitrator can assist the parties to Capital expenditure these proposed reforms will be made and negotiate. This change will mean that the what practical impact they will have on the Part 4 dispute processes will commence 17. To extend some of the recent changes to franchise sector. the Franchising Code for the Automotive to apply to a termination following the sector. procedure in clause 29. It also appears to There is likely to be only a short time for mean a termination without notice will be further consultation with Government before Marketing and cooperative funds prohibited even in special circumstances. draft legislation is prepared. The timing of this release is interesting as it now means there is 18. To clarify requirements relating to the Penalties and enforcement the potential for changes to the Franchising treatment and reporting of cooperative Code to be made prior to the end of the funds where regular payments are required 26. Double the civil penalty provisions for calendar year. to cover advertising and marketing breaches of the Franchising Code from 300 to 600 penalty units. activities. This article was written by Evan Stents, Lead Partner, Automotive Industry Group, HWL Multi-party dispute process 27. Make clause 31 of the Franchising Code containing provisions relating to marketing Ebsworth Lawyers. 19. To clarify that if the person conducting

automotivedealer.com.au | SEPTEMBER 2020 | 27 FEATURES Australian Automotive Dealer Association

NEWS FLASH - THERE’S A RECESSION HAPPENING... BUT IT’S NOT THE ONE YOU KNOW ABOUT

David Blackhall VFACTS QUARTERLY AGGREGATES - RECESSIONARY TRENDS Industry Consultant, 1ST QTR 2ND QTR 3RD QTR 4TH QTR Raglan Ridge 2017 388870 320207 289616 299948 Advisory Delta Qtr/Qtr (68663) (30591) 10332 2018 291538 313984 275483 272106 ell before August VFACTS hit the Delta Qtr/Qtr (8410) 22446 (38501) (3377) cyber-net, it was obvious that we’d 2019 268538 285928 256998 251403 Whave to avert our eyes from last Delta Qtr/Qtr (3568) 17390 (28930) (5595) month’s scoresheet to avoid a bout of morbid 2020 233361 209054 depression. And the numbers didn’t let us down in that regard. Delta Qtr/Qtr (18042) (24307)

Of course the result went from bad to hideous Table 1 because of the protracted Victorian lockdown. These draconian measures landed a massive blow to Dealers’ businesses and trashed the Now, while the 29 consecutive months of Kinda puts things into perspective, doesn’t it? national numbers. year-over-year new car sales decline is widely known in both Federal and State political and Looking at the August numbers in detail, a few You have to go back to 1997 to find a lower economic circles, maybe the table above isn’t. things jump out. August total, and that was a year that came in First, grid positions are relatively unchanged. at a meagre 772 thousand sales – but more on Table 1 (above) shows four automotive Toyota has pole with 20.4% share for the August later. recessions that governments - State and Federal - don’t seem to care to do anything about. month and 21.8% for the year. They love it at Economists generally define a Recession (yes, Toyota when a plan comes together – which is that’s with a capital ‘R’) as two consecutive Total quarterly sales of new cars declined always for them… quarters of declining GDP. That’s just consecutively in the 2nd and 3rd quarters of Mazda sits in second spot on 11.3% and the happened in Australia, thanks to COVID-19, 2017, the 3rd and 4th quarters of 2018, the 3rd ‘Seoul-brothers’ Hyundai and Kia are equal although there were a few worrying signs and 4th quarters of 2019 and the 1st and 2nd third on 7.4% - a mere 4 units separated them before the virus crept into our lives. quarters of 2020. last month. One of those worrying signs was the Of course, there’s likely more to come since Talk about sibling rivalry… slowdown in new car sales. COVID-19 has its icy grip on us, probably through year end.

28 | SEPTEMBER 2020 | automotivedealer.com.au FEATURES Australian Automotive Dealer Association

The second thing that jumps out is the names In what was a decidedly underwhelming VFACTS is no help in that regard. of the top five brands ranked by performance month in a dreary economic landscape, some relative to the market. Since the overall market other honourable mentions include: A friend (or someone I formerly thought of as a friend) recommend that I read Love in is down 20.4% on a year-over-year basis, • Sustained return to form from Volvo the Time of Cholera by Nobel prize winning any brand that is down less than 20.4% can Cars this year, down just 448 units YTD theoretically be called a ‘winner’. But that author Gabriel Garcia Marquez. He thought it • Mercedes-Benz Cars and Vans both beat does seem like blatant abuse of the English was an appropriate choice given our pandemic the market decline handily language. Still, as Einstein proved, everything circumstances. is relative.. • Other luxury/prestige brands Audi, BMW and Maserati did likewise I recommend you don’t do that. The list is on the next page. • There were some spectacular Perhaps the new Netflix series ‘Raised By conflagrations at the other end of the Three of these could well be called ‘aspirer’ Wolves’ starring our own Travis Fimmel might table, but good manners cause me to brands and those three are all Chinese. You be more appropriate (he’s a household name forbear mentioning these matters…. could argue that they are selling smallish in Echuca). numbers and that’s true – but the value As we head into the sixth month of Directed by Ridley Scott … how bad can it be? propositions seem strong. COVID-19, diversions from our virtual house- Ahem…just watch it. At least it’s not called arrest become increasingly important. Finding Note to self: Consumer Economics 101: Eaten By Wolves. great things to read or watch is now a vital life Consumers love value. skill. There might be a risk of some of that come 2021…

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VFACTS PERFORMANCE RANKING BY BRAND National Based on brand YTD % variation vs.Total Month YTD Variance +/- Vol. & % Brand 2020 2019 2020 2019 MTH YTD MTH YTD Haval 246 168 1,851 951 78 900 46.4% 94.6% MG 1,217 720 8,074 5,140 497 2,934 69.0% 57.1% RAM 245 303 2,252 1,681 -58 571 -19.1% 34.0% Genesis 14 19 99 79 -5 20 -26.3% 25.3% Great Wall 115 118 1,109 906 -3 203 -2.5% 22.4% LDV 654 564 4,539 4,210 90 329 16.0% 7.8% M-Benz Vans 475 535 4,444 4,221 -60 223 -11.2% 5.3% Audi 1,008 1,365 9,552 9,421 -357 131 -26.2% 1.4% BMW 1,414 1,860 15,005 16,005 -446 -1,000 -24.0% -6.2% Maserati 30 36 314 344 -6 -30 -16.7% -8.7% Volvo Car 568 692 4,630 5,078 -124 -448 -17.9% -8.8% M-Benz Cars 2,064 2,380 18,984 20,962 -316 -1,978 -13.3% -9.4% Toyota 12,449 16,700 125,686 139,349 -4,251 -13,663 -25.5% -9.8% Lexus 358 817 5,625 6,373 -459 -748 -56.2% -11.7% Porsche 174 388 2,631 3,007 -214 -376 -55.2% -12.5% Kia 4,521 4,662 35,604 41,232 -141 -5,628 -3.0% -13.6% Jeep 476 469 3,310 3,835 7 -525 1.5% -13.7% MINI 175 274 1,924 2,236 -99 -312 -36.1% -14.0% Peugeot 147 335 1,392 1,632 -188 -240 -56.1% -14.7% Suzuki 1,148 1,309 9,786 11,574 -161 -1,788 -12.3% -15.4% Ford 3,898 4,916 36,122 43,821 -1,018 -7,699 -20.7% -17.6% Skoda 504 611 3,907 4,770 -107 -863 -17.5% -18.1% Chrysler 20 26 179 219 -6 -40 -23.1% -18.3% Alfa Romeo 76 86 456 590 -10 -134 -11.6% -22.7% Volkswagen 2,785 4,100 26,090 33,893 -1,315 -7,803 -32.1% -23.0% Mazda 6,921 7,291 53,574 70,889 -370 -17,315 -5.1% -24.4% Isuzu Ute 794 1,914 12,100 16,472 -1,120 -4,372 -58.5% -26.5% Ferrari 11 35 133 182 -24 -49 -68.6% -26.9% Subaru 2,052 3,553 19,873 27,199 -1,501 -7,326 -42.2% -26.9% Nissan 2,380 4,538 23,979 33,692 -2,158 -9,713 -47.6% -28.8% Renault 504 740 3,684 5,251 -236 -1,567 -31.9% -29.8% Mitsubishi 4,308 6,242 37,778 55,516 -1,934 -17,738 -31.0% -32.0% Land Rover 248 657 4,293 6,347 -409 -2,054 -62.3% -32.4% Hyundai 4,525 7,320 39,946 59,244 -2,795 -19,298 -38.2% -32.6% Honda 1,471 3,067 20,199 30,806 -1,596 -10,607 -52.0% -34.4% Jaguar 60 198 1,011 1,638 -138 -627 -69.7% -38.3% Fiat 50 76 427 714 -26 -287 -34.2% -40.2% Holden 555 3,569 15,770 31,352 -3,014 -15,582 -84.4% -49.7%

Total 60,986 85,633 575,906 723,283 -24,647 -147,377 -28.8% -20.4% FEATURES Australian Automotive Dealer Association

FAIRNESS IN FRANCHISING: GOVERNMENT RESPONSE

PRINCIPLES FOR FAIR AND Completed Actions of relevance to Dealers Vinesh George FACET EFFECTIVE REGULATION Company Secretary 1. Prospective franchisees should 1. The Government has supported the and Legal Counsel, be able to make reasonable, information-gathering powers of the AADA | Principal, informed assessments of ACCC with respect to unfair contract the value (including costs, VS George Lawyers obligations, benefits and risks) of terms and has implemented legislation to Entering a a franchise before entering into a this effect. franchising contract with a franchisor. agreement n 20 August 2020, the Government 2. Franchisees and franchisors The ACCC now has investigative power published its response to the should have ‘cooling off’ to obtain information, documents and time to consider whether the OParliamentary Joint Committee on relationship is right for them evidence for the purpose of determining Corporations and Financial Services (The after signing. whether or not to make an application to Committee) Fairness in Franchising report. 3. Each party to a franchise the court for a declaration of the existence agreement should be able to of unfair contract terms in a consumer or The report recommended changes to the verify the other party is meeting its obligations and is generating small business contract. Franchising Code of Conduct (Code) and value for both parties. this is the Government’s response to the 4. A healthy franchising model 2. The Government’s response to the issue recommendations. fosters mutually beneficial of threats and intimidation to franchisees/ Operating a cooperation between the Dealers is to extend whistleblower Although Dealers have the benefit of separate franchise franchisor and the franchisee, with shared risk and reward, free protections for franchisees and employees protections in Part 5 of the Code, they still from exploitation and conflicts of both franchisees and franchisors have retain many of the general protections in the of interest. been added through the Treasury Laws Code and so benefit from those as well. 5. Where disagreements turn into Amendment (Enhancing Whistleblower disputes, there is a resolution Protections) Act 2019, which came into The Government’s response is framed around process that is fair, timely and cost effective for both parties. effect on 1 July 2019. the four key facets of the franchise experience 6. Franchisees and franchisors as well as seven core principles for fair should be able to exit in a way This is an interesting response given that and effective regulation as indicated in the Exiting that is reasonable and fair to both to date, whistleblower protection has been following table. parties. unavailable as it does not fall within the 7. The framework for industry Code codes should support regulatory scope of disclosable matters. Although it compliance compliance, enforcement and does not appear to have been tested, the appropriate consistency. scope of disclosable matters now appears

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to include Dealer complaints, which might processes. The Government will implement that is fair and that constrains losses is. fall into the category of “improper state of a voluntary binding arbitration model, Exit arrangements, including termination affairs or circumstances”. introduce conciliation and amend the rights, unfairly favour franchisors over Franchising Code to clarify that if the franchisees. The Government intends to The Government specifically states in person conducting the dispute resolution amend the Franchising Code to facilitate its response that a breach of an industry process deems it appropriate to conduct a negotiated early exits that balance all code would qualify. Importantly, the multi-party process, the franchisor cannot interests involved. amendment clearly provides anonymity refuse to participate. to whistleblowers in section 1317AA of 4. The Government has resolved to double the Corporations Act 2001, which states Increased dispute resolution alternatives the maximum financial penalty for a that, “There is no requirement for a discloser and the ability to force franchisors to breach of the Franchising Code from to identify himself or herself in order for a comply with a multi-party process is a $66,600 (300 penalty units) to $133,200 disclosure to qualify for protection...” step in the right direction to alleviating the (600 penalty units). Despite the significant imbalance in bargaining power between increase, this amendment falls far short 3. Finally and significantly, the Government franchisees and franchisors. This also of the recommendation in the Fairness amended the Franchising Code to appears to clarify that clause 52 of the in Franchising report, which called for introduce the New Vehicle Dealership Code, which only applies to Dealers, is penalties to ‘at least’ reflect those currently Agreements provisions for the automotive intended to be a mandatory requirement to available under Australian Consumer Law sector to strengthen the rights of Dealers. participate in a multi-party process. that exceed $10,000,000.

Those industry specific provisions 2. The Government has committed to Conclusion commenced operation on 1 June 2020 amending the Code to clarify requirements Changes that have been implemented by and have been unpacked in detail by the relating to the treatment and reporting of the Government and the intended changes Briefing Note on the New Automotive cooperative funds where regular payments constitute further progress for Dealers on the Regulations released by V.S George Lawyers are required to cover advertising and journey to a level playing field. It is apparent in August 2020. marketing activities. Dealers should be that franchisee concerns are being taken ready to contribute to this discussion in seriously and that there are genuine attempts Key Actions to be taken by Government of order to protect co-operative funds from to provide adequate protections. We now relevance to Dealers misuse and also to clarify ownership of the await details of the proposed intended changes funds in co-operative accounts. 1. The Government has resolved to take steps that have been flagged by the Government’s to improve the accessibility, affordability 3. Dealers commonly face the inability to exit response. and effectiveness of the dispute resolution an unviable franchise agreement in a way

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32 | SEPTEMBER 2020 | automotivedealer.com.au FEATURES Australian Automotive Dealer Association

AADA PROPOSES FOUR-POINT BUDGET PLAN

ADA has put a four-point plan for AADA Key Budgetary Recommendations facilities benefited the wider economy via the the retail automotive industry to the employment of local builders, contractors AFederal Government in its annual Incentivise Investment and other service providers. It also requested Budget Submission, highlighting the need • Extend the enhanced Instant Asset consideration for the abolition of the car limit, to incentivise investment, incentivise Write-off arguing that it discriminated against cars, as no consumers, encourage consumer lending, • Allow all businesses to access investment other asset has such a limit. and modernise automotive taxation. incentives “There is no boat limit. There is no coffee In a 20-page document compiled by CEO James • Remove or restructure the Car Limit machine limit. Furthermore, it discriminates Voortman, AADA stressed how significantly against certain businesses, such as limousine Incentivise Consumers the business landscape had changed for the providers and tour operators for example who industry, and the challenges it faced even before • Establish a Fleet Renewal Program are more likely to require vehicles subject to the onset of the COVID-19 pandemic. the car limit. The car limit should be abolished Encourage Consumer Lending or restructured to ensure it targets appropriate “Australia’s automotive industry entered • Review Responsible Lending Laws vehicles and does not discriminate against the pandemic having experienced some 28 certain businesses,” AADA argued. months of falling sales,” the submission reads. Modernise Automotive Taxation “The situation has only deteriorated since, • Review the Automotive Taxation Regime Incentivise Consumers the low point being the month of April which • Abolish or reform the Luxury Car Tax saw a fall in sales of almost 50 per cent. As of “The Government should develop a fleet 31 July, new car sales are down around 20 per • Abolish the Passenger Vehicle Tariff renewal scheme that will provide a stimulus for cent year to date and with the third quarter the automotive industry and assist in making Incentivise Investment traditionally being characterised by weak sales Australia’s passenger vehicle fleet safer, while also reducing emissions,” AADA submitted. and the situation in Victoria having an effect, The AADA submission argued it was crucial it seems like sales volumes in 2020 will be the that business investment be encouraged to “Bringing down the age of Australia’s fleet worst in around 20 years.” assist in the recovery from COVID-19 crisis, will have social and economic benefits. It will and suggested the instant asset write-off and AADA acknowledged the Government had save lives and achieve better environmental the accelerated depreciation deduction for provided much-needed assistance during outcomes while providing a boost for industry businesses with an aggregated turnover of less this time, with the JobKeeper program saving and making significant savings to the budget. than $500 million be extended until at least the tens of thousands of dealership jobs. The end of this financial year. “Fleet renewal schemes have been successfully expansion of the instant asset write-off scheme applied in other industrialised economies had also provided welcome support, proving “Both the instant asset write-off and the throughout the world during economic an incentive for more businesses to purchase accelerated depreciation deduction are downturns.” vehicles which they otherwise would not have. welcome, but they are likely to be most effective as the economy starts to recover from Encourage Consumer Lending “Without these measures dealerships all across the effects of the pandemic,” it said. Australia would have severely struggled and In recent years a stricter application of the consequences for the industry would have AADA pushed for the concessions to extend responsible lending laws has resulted in been catastrophic,” the submission said. to businesses with turnover greater than $500 everyday car buyers finding it more difficult to million, arguing that Dealer investment in get finance approval for the purchase of vehicles.

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To compound matters COVID-19 has led to Modernise Automotive Taxation • raise the threshold to target truly luxury many occupations being deemed high risk vehicles and stage a sunset period for resulting in a further tightening of credit. AADA submitted that Australia needs an LCT urgent review of its automotive taxation regime: Notes from finance companies have been “Each year, Australians pay tens in billions in • exempt low-emissions vehicles, and issued to dealerships restricting them motoring taxes and charges to governments. As from assessing the JobKeeper portion of a fuel efficient vehicles are increasingly adopted • exclude accessories from the calculation customer’s income. and trends such as ridesharing accelerate, of whether a vehicle hits the threshold for Australia needs to consider the way in which we paying the LCT. “The Government has acknowledged the tax motorists and create a system which is fit for Passenger Vehicle Tariffs problem for small and medium enterprises purpose for the future.” and under the Coronavirus SME Guarantee AADA proposed the removal of import tariffs Scheme it has provided an exemption from AADA argued that the Luxury Car Tax (LCT) on vehicles that are manufactured in, or responsible lending obligations for lenders and tariffs on imported vehicles were outdated imported from countries with which Australia providing credit to existing small business and in need of reform. does not have a Free Trade Agreement (FTA). customers. Something needs to be done for Luxury Car Tax (LCT) consumers too,” AADA said. “Consumers deserve immediate relief for new vehicles and so does industry, particularly “This is the biggest factor behind the “The LCT is a poorly structured tax and acts those new car dealerships which have a downturn in new car sales over the past two as a barrier to the renewal of the passenger disproportionate amount of product on their years and if it persists will significantly affect vehicle fleet at a time when technological showroom floor which just happens to be the industry’s ability to recover. Default rates in improvements continue to make new car manufactured in a non-FTA country,” the the motor vehicle finance industry have been models safer, more energy-efficient and more submission said. relatively low in Australia and the Government environmentally friendly,” AADA said. should explore ways of freeing up credit If the total abolition of the LCT was not AADA is hopeful the Government will to appropriate consumers and review the possible within the next budget cycle, AADA carefully consider the proposals and responsible lending laws.” proposed three options: will continue to make itself available for consultation.

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REFORM, THEN ABOLISH LCT

ADA has proposed three options AADA proposed the adoption of one or more “Increasing the threshold of the LCT to target to reform the Luxury Car Tax of the following options: true luxury vehicles should in our view, be the A(LCT) before its eventual abolition, prelude to the eventual abolition of the LCT,” in its Budget Submission to the Federal Option 1: Raise the threshold to target truly AADA said. Government. luxury vehicles and stage a sunset period for LCT “The AADA understands that forgoing the “The LCT is a poorly structured tax and acts revenue raised by the LCT is challenging, so as a barrier to the renewal of the passenger As it stands, the LCT is set at a level above that our proposal is for a staged abolition, where vehicle fleet at a time when technological of the premium models of cars that were once the rate at which the tax is paid is progressively improvements continue to make new car manufactured in Australia, such as the Holden diminished over a period of five years until it is models safer, more energy-efficient and more Statesman and the Ford Fairlane. A slightly no longer collected. This approach would show environmentally friendly,” AADA reasoned. higher threshold exists for cars that claim a the Government’s good faith while allowing a fuel consumption of less than seven litres per progressive adaptation to the loss of revenue The submission pointed out that the threshold 100km. and preventing a consumer boycott to avoid for the tax currently applies to vehicles such as the LCT until it was removed. the Toyota Landcruiser, when it was intended “As car manufacturing no longer takes place for the truly luxury vehicles. It also asked why in Australia, it is unclear why the thresholds “Adopting Option 1 would both restrict the luxury new vehicles attract a tax when other remain at current levels, particularly when tax to cars that are more appropriately labelled luxury products such as yachts, private jets and they capture vehicles such as the Toyota as luxury vehicles and lead to the eventual jewellery attract no such charge. Landcruiser or even some variants of the abolition of the tax in a staged and controlled Mazda CX-9 SUV,” AADA said. fashion.” In addition, individuals purchasing expensive vehicles are already paying more by virtue of “The Government should consider escalating Option 2: Exempt low-emissions vehicles the GST contribution they make on the final the threshold upon which the LCT is payable sale price. until only cars that truly meet the definition of AADA submitted that the LCT had been luxurious are left in the market. structured in a way that discouraged the “Furthermore, it is disappointing that the LCT purchase of fuel-efficient vehicles. applies to optional features which discourages “Our review of car prices and models indicates consumer uptake of safety features due to that a nominal threshold of $100,000 would In 2008 a higher LCT threshold was concerns it will push their new vehicle over the meet the above definition. Interestingly, this introduced for fuel-efficient vehicles that threshold,” the submission stated. is the level at which the Queensland and consumed less than seven litres of fuel per Victorian Governments’ state luxury car taxes 100km driven. The threshold was set at AADA also argued that the LCT potentially also apply.” $75,000 for fuel-efficient vehicles, significantly hinders good relations with Australia’s higher than the threshold of $57,180 for all trading partners. In particular, the EU and While the AADA was strongly opposed to other vehicles. Both thresholds were indexed, the UK are disproportionately affected and the Queensland and Victorian Governments’ but differing methodologies were applied, have repeatedly criticised the Australian recent introduction of a state tax on luxury which resulted in the threshold for fuel- Government’s application of the tax at various cars, it acknowledged that the threshold efficient cars increasing less than one per trade forums and negotiations. had been set at a level that more accurately cent over the past decade – it is now $75,526. reflected the luxury status of the motor The threshold for non-fuel-efficient vehicles If the total abolition of the LCT cannot be vehicles at, and above, that price point. contemplated within the next budget cycle,

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meanwhile has gone up almost 20 per cent to disproportionately on EVs,” AADA said. calculated solely on the price of the base level $67,525. variant of a vehicle, rather than include all Many of the EVs sold in Australia attract accessories present in other variants. This is If the fuel-efficient cars were indexed at the a tariff due to the fact that they have been of particular importance for vehicles that are same level as other vehicles, the threshold manufactured in non-FTA countries, mainly marginally below the LCT threshold, that today would be over $88,000. within the EU. Even more EVs also incur the mostly only cross it because their new owners LCT as they cost more than the fuel-efficient have chosen a variant with greater safety “This is one example of how the LCT has threshold of $75,526. features. One example of this being the Mazda in effect disincentivised the uptake of CX-9, where only the variant with the highest fuel-efficient vehicles. Without a doubt the EVs manufactured in Europe are more likely level of safety features falls within the LCT biggest factor constraining demand for low to be priced above the LCT threshold and as purview,” AADA said. emission vehicles (that is those with fuel such are more likely to be subject to additional economies better than 3 litres/100 Kilometres) Federal Government taxation. “This situation is particularly problematic particularly Electric Vehicles (EVs) in for many 4WD vehicles, where aftermarket “While the policy intent of these taxes is not to Australia is the high up-front cost of purchase,” safety or work-related accessories (winches, target low emissions vehicles, the unintended AADA said. lights, bull bars, etc.) are added to the price consequence of these legacy taxes is that EVs of the vehicle and thus take it above the LCT “Despite the significant savings in running are more expensive than they should be,” threshold. The result is that consumers will still costs and the relief from taxation, many AADA said. get their accessories but source them after they motorists are put off by the fact that EVs have purchased their vehicle, and potentially are nowhere near price parity with Internal “Adopting Option 2 would make electric not use genuine parts, with associated effects Combustion Engine (ICE) vehicles.” vehicles and potentially other low emissions vehicles more affordable and encourage their on the safety of the vehicle’s driver and The reason for the price disparity is the broader acceptance into the Australian fleet. passengers. high cost of the lithium-ion battery, which Given the very small numbers of vehicles “Alternatively, we would offer the suggestion is expected to decline over time. In the involved, this option would not significantly that, if the base version of a vehicle does not meantime, some countries have sought affect the revenue raised annually by the LCT.” breach the LCT threshold, then none of the to bring down the cost of EVs by offering versions featuring more extensive options, financial incentives. “The question of Option 3: Exclude accessories from the would breach the threshold either.” incentives is, in essence, a philosophical calculation of whether a vehicle hits the one, and it distracts from the real factors threshold for paying the LCT distorting the price of EVs namely the Federal “Adopting this option would modify the Government’s taxes on new cars, which falls calculation of the LCT to ensure that it is LUXURY CAR TAX THRESHOLD RISES

he Australian Tax Office has revised is imposed at the rate of 33% on the amount Lexus vehicles, the Ford Mustang GT and the Luxury Car Tax (LCT) threshold, above the luxury car threshold, and is paid R-Spec, and the Toyota Supra. Tfrom $66,331 to $67,525 for the 2019-20 by businesses that sell or import luxury cars financial year. For fuel-efficient vehicles the (Dealers), and also by individuals who import Unlike its competitors, BMW is not passing- LCT threshold remains the same at $75,526. luxury cars. on the savings to consumers. In a statement, the company said: "BMW integrated the In the past decade, the threshold for non-fuel- The LCT threshold increase has resulted in savings from this change into its recent pricing efficient vehicles has increased by more than price reductions across many new models. revision for applicable models". $10,000, from $57,180. In the same period, The new threshold makes for a saving of about the threshold for fuel-efficient vehicles has $400 per vehicle, or $672 for fuel-efficient In Victoria, an additional 'super luxury duty' risen by just $526, which seems odd given the models. applies above the LCT threshold, equating to environmental benefits of incentivising the 5.2% up to $100,000, 7% from $100,000 to take-up of fuel-efficient vehicle. Although not all savings were passed on $150,000, and 9% for vehicles over $150,000. to new-car buyers, prices were reduced on A fuel-efficient vehicle is defined as one with models from Audi, Jaguar, Land Rover, AADA’s position remains that LCT should be a fuel consumption of 7L/100 km or less. LCT Mercedes-Benz, and Porsche, as well as some abolished.

36 | SEPTEMBER 2020 | automotivedealer.com.au FEATURES Australian Automotive Dealer Association

ASIC INTERVENTION RISKS FURTHER DAMAGING AUTOMOTIVE INDUSTRY

he Australian Automotive Dealer ASIC also undertook additional work to “ASIC’s scrutiny of these products in recent Association’s submission to ASIC’s consider the impact of the COVID-19 years has had the desired effect, leading to a Tproposed intervention order on the environment on the market in recent months. capping of commissions, insurers withdrawing sale of automotive add-on insurance and from the market and improvements in warranty products has expressed concern The consultation process insurance and warranty products. Consumers that the intervention will further harm have benefited from improved insurance Before making a product intervention order, the industry and its ability to service its and warranty products and ASIC should be ASIC must consult persons who are reasonably customers. commended for the role they have played in likely to be affected by the order. driving these outcomes.” ASIC sought stakeholder feedback on a In response to the submissions received to CP proposed product intervention order on Mr Voortman argued that instead of denying 324, ASIC has made a number of changes to the sale of add-on insurance and warranty consumers the ability to purchase reputable the proposed product intervention order. products sold with motor vehicles, with insurance and warranty products, the focus submissions due by 19 August. AADA CEO James Voortman said ASIC’s should be on those poorly constructed revised proposed intervention order comes at products available for sale. ASIC is considering using its product a time in which the industry is struggling amid intervention powers to address what it believes “ASIC should target the design of these historical declines in new car sales. is significant consumer detriment in this products rather than the sales process and market. “This year, we are on track to have the worst channel through which such products are new car sales result in two decades and the sold,” he said. It followed ASIC’s earlier consultation through steepest decline on record. Dealers are focused Consultation Paper 324 Product intervention: “We remain of the view that ASIC’s work is a on keeping the doors open and holding onto The sale of add-on financial products through duplication of the effort being led by Treasury their employees and unnecessary regulation caryard intermediaries (CP 324), published which is working on a whole of economy will only compound their situation,” he said. in October 2019. The initial consultation model. sought views on ASIC’s proposal to use the “Our members in Melbourne have been forced “We would hope that by aligning the product intervention power in Pt 7.9A of the to close their doors and all Dealers are feeling automotive industry with the rest of the Corporations Act 2001 to introduce a deferred the pressure from the effects of the pandemic. economy, new car Dealers will be able to sales model for the sale of add-on insurance If issued, this intervention order will risk assist customers that have genuine need for and warranties by caryards. further economic harm to Dealers and limit appropriate insurance products.” their ability to sell credible insurance products to customers in need.

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JOBKEEPER, JOBTRAINER AND CONTINUATION OF THE MODIFIED AWARD

n 7 August, the Federal Government The eligibility thresholds for reduction down-turned market lasting over two years and announced an extension to its in turnover remain as before at 50% for compounded by the COVID-19 pandemic. OJobKeeper program, but with a businesses with turnover of more than reduction in the amount of money recipients $1 billion and 30% for businesses with We note that the target industries for the will receive. The JobKeeper payment that was turnover of $1 billion or less. JobTrainer program will be worked out scheduled to run until 27 September 2020 by the National Skills Commission (NSC) will now continue through to 28 March 2021. JobKeeper has provided an important lifeline in consultation with the states and we are for Dealers all over the country and has working with the NSC and States to ensure From 28 September, the JobKeeper rate has enabled them to keep staff employed who that the automotive industry is included in the been reduced from $1,500 a fortnight to otherwise would have had to be let go. program, given the industry skills shortages. $1,200; and from 4 January 2021 the rate drops from $1,200 to $1,000 a fortnight. JobTrainer Modified Industry Award

To be eligible from 28 September, businesses The JobTrainer program is an upskilling and The AADA has worked with the ACCI and will have to demonstrate a decline in turnover re-training initiative, with contributions from VACC to introduce a modified industry using actual GST turnover rather than both Federal and State governments. award to assist member businesses not eligible projected GST turnover; eligibility will be for JobKeeper, to utilise a range of award It was announced in July by Minister for Small determined by assessing actual GST turnover flexibilities during the pandemic. The changes, and Family Business, Skills and Vocational in the September quarter, 2020 only. made through the provision of Schedule Education, Michaelia Cash, and will create 1 - Award Flexibility during the COVID-19 From 4 January 2021, eligibility will be 340,700 additional training places. The AADA Pandemic, were added to the Vehicle Repair, determined by assessing actual GST turnover were delighted with the announcement of the Services and Retail Award 2020 (VRSR) and in the December quarter, 2020 only. JobTrainer program and the provision of were approved by the Fair Work Commission $1.5 billion to expand and extend the (FWC), who recognised that sectors of the From 3 August, the relevant date of Apprentices and Trainees Wage subsidy. We Automotive industry have been severely employment moves from 1 March to 1 July also welcome the changes to the eligibility impacted by the pandemic. 2020, increasing employee eligibility for the criteria for the wages subsidy which now existing scheme and the extension. benefits businesses with up to 200 employees. This modified award has been negotiated This will assist many franchised new car between industry and the unions, ACTU and Dealers, all of whom have been suffering from a AMWU and has now been extended to 30 September, 2020. automotivedealer.com.au | SEPTEMBER 2020 | 39 FEATURES Australian Automotive Dealer Association

ARE YOU PREPARED? JOBKEEPER COMPLIANCE REVIEWS AND JOBKEEPER 2.0

JobKeeper reviews already starting to be seen businesses claiming JobKeeper to ensure they André Spnovic in the motor vehicle industry. have information on hand to support their Partner, Indirect Tax, entitlement. Deloitte Tax Services These reviews have initially focused on Pty Ltd circumstances where figures reported on What information should businesses have on Business Activity Statements (BAS) are not hand in anticipation of an ATO review? consistent with what the ATO would expect for a business that has claimed JobKeeper (e.g. We have set out below some of the information Andrew Cheney reported sales have not decreased to the extent that should be held: Manager, Indirect Tax, expected, generally 30% or greater). • Decline in turnover calculations, Deloitte Tax Services including details of the test period Whilst BAS figures are a logical starting point, Pty Ltd selected, calculation performed, and it is noted that this approach is reflective of method adopted to allocate supplies to certain limitations in information available to the comparison and test periods. the ATO. There are various reasons why BAS • If tests other than the ‘basic’ test were any in the automotive industry have figures may not appear consistent with the applied, support for why the relevant test put their hand up to claim eligibility decline in turnover required for JobKeeper was selected (e.g. ‘modified basic’ test for Mfor the Federal Government's eligibility though despite this the business is group employer entities or ‘alternative’ ‘JobKeeper’ program and received support eligible for JobKeeper. payments for eligible employees and eligible tests). business participants. With the ATO There may also be circumstances where BAS • Evidence of meeting JobKeeper ramping up JobKeeper review activity, and figures suggest a business has experienced administrative requirements, including JobKeeper phasing into ‘JobKeeper 2.0’, it is the required decline in turnover, though the nomination notices completed by an important time for businesses to review JobKeeper eligibility requirements are not met. employees, evidence of notifying their JobKeeper position. Accordingly, we expect the ATO to expand the employees of enrolment for JobKeeper circumstances in which it conducts JobKeeper purposes and evidence of notifying ATO review activity reviews. employees of identifying them to the ATO for JobKeeper purposes. The ATO have been gearing up for JobKeeper In this context, it is important for all reviews for some time now, with a number of

40 | SEPTEMBER 2020 | automotivedealer.com.au FEATURES Australian Automotive Dealer Association

The ATO expects this information to be on hand and readily accessible by businesses. Accordingly, when conducting JobKeeper compliance reviews the ATO requests businesses provide this information within short timeframes (generally 1 week).

Potential areas of focus for the industry

JobKeeper started with a simple policy objective. However, the rules in implementing JobKeeper have become complicated.

Potential areas of complexity to consider in advance of any ATO review, include: • Allocation of supplies to relevant periods – the ATO has released a ruling which allows taxpayers some flexibility to choose from different approaches for allocating supplies to relevant periods for comparison purposes. Whilst GST attribution is broadly one permitted approach, this does not necessarily mean that businesses can compare figures from BASs. There may be amounts included or excluded from BAS figures that should or should not be included in JobKeeper decline in turnover testing calculations. • Manufacturer incentives/support payments – incentives and support payments received by Dealers that do not represent consideration for the supply of a car (or any other supply) made by Dealers (e.g. holdback, retail target incentives, wholesale target incentives etc.) may not count towards current or projected However, from the Federal Government’s The release of the JobKeeper 2.0 rules is GST turnover as relevant for JobKeeper announcement regarding the extension of imminent. Businesses should keep an eye out decline in turnover testing purposes. JobKeeper there are a few key points to note: for these rules and consider their application. However, other incentives and support • JobKeeper 2.0 will have two phases. Phase payments may count (e.g. fleet rebates Businesses that were eligible for JobKeeper 1 from 28 September to 3 January 2021 and run-out model support payments). but not eligible for JobKeeper 2.0 may still and phase 2 from 4 January 2021 to 28 • Capital assets – the sale of a capital asset be able to give directions to employees March 2021. should not count towards a Dealer’s as contemplated by COVID-19 related projected GST turnover as relevant for • Businesses will be required to reassess modifications to Fair Work Act 2009 (Cth) if JobKeeper decline in turnover testing eligibility for each phase, meaning broadly their turnover has declined by 10% or purposes (though may count towards businesses that have been eligible more, and they hold a ‘10% decline in turnover current GST turnover). for JobKeeper to date may no longer certificate’. Contact your tax adviser if one of be eligible. The approach for testing these certificates is required. JobKeeper 2.0 eligibility may also differ to that which has been applied to date. In summary, there have been a number of At the time of writing this article the • JobKeeper payment amounts will differ updates and changes to JobKeeper and other Department of Treasury is yet to release the for each phase and within each phase there government support programs for businesses rules for the recently announced JobKeeper will be two-tiers of payment broadly based to keep abreast of in recent months. Businesses 2.0, which broadly covers the period from on the average number of hours worked should be prepared to demonstrate they have 28 September 2020 to 28 March 2021. per week by eligible employees within complied with relevant requirements and Accordingly, much of the finer detail regarding defined reference periods. consider the implications of further changes JobKeeper 2.0 is not yet known with certainty. over the coming months.

automotivedealer.com.au | SEPTEMBER 2020 | 41 FEATURES Australian Automotive Dealer Association CRENNO SIGNS OFF

MOTORSPORT Australian Automotive Dealer Association

There is no silver bullet; all teams are governed by the REC and do an platforms, from broadcast to digital and amazing job. Ultimately this competition social, gives us complete control of our MOTORSPORT Australian Automotive Dealer Association recently agreed to a Q&A interview for is one of, if not the, toughest motorsport James product. Our digital and social platforms competitions in the world. Team Penske 'Automotive Dealer' magazine, as he prepares are second only to the AFL and continue was beaten to pole position at Clipsal to commence his fifth year at the helm of the to grow at a staggering rate. This puts us by 0.0001 of a second or 5mm across a Supercars organisation. in a hugely advantageous position when 3.22km circuit. Eighteen metres regularly we consider the long-term direct-to-fan JC: What do you rate the best three goals/ separates the top 15 cars in qualifying, pathways. tries you have scored in your four which is why the fans love our product. years? 10 QUESTIONS FOR JC: With the big push by Supercars this In my last article I noted how Delta year to install female driver, Simona JC: JW: 1) The richest media deal in the sport's Goodrem's appointment as Supercars de Silvestro, in one of the 26 available history. It doesn't matter the sport, Ambassador was irrelevant to our seats, what will be your evaluation SUPERCARS CEO, the media rights and, particularly, audience and incapable of creating MOTORSPORT Australian Automotive Dealer Association success markers at season’s end? PLENTY OF CHANGES FOR THE broadcast rights are fundamental to growth. You felt my commentary the health of the sport and the viability was erroneous. Please convince me Bathurst in 2015 showed from the outset of the teams. JW: The question needs to be asked whether the JAMES WARBURTON that this initiative would be successful. otherwise. The addition of the Super Girls Wildcard authorities of our sport, in particular the 2) Brokering the 'Team's Deal' between I sure did, in that you suggested Delta drove an additional $25 million of PR JW: I tipped only two in the top five; six in the the equity shareholders (financial would do nothing for our existing fans. directors of V8 Supercars, recognise that top-up) which, frankly, was an absolute for an already mature event. top 10 and 13 in the top 15. That is exactly the point. Delta became 2017 V8 RACING SEASON MOTORSPORT and Will Davidson for winning this this irresponsible hoon element have motor necessity to underpin the sustainability Australian Automotive Dealer Association We always said that the drive had to be an Ambassador to further our appeal to and viability of the teams. on 'merit' and we are not surprised to new or non-fans. Premiership. The tips I got very wrong were: sport and hot cars as their core recreational see the early accolades that Simona has 3) Renewing our key races with every A case in point is my niece, who is 19. interest. As such, it is a fair assumption received from the experts. Ultimately, single state government. This She has never been to, nor would ever List A - Official 2016 Top 10 in performance will dictate success, so it • Rick Kelly for 3rd – his result was 13th that our sport and our drivers can have an management team has done close to have been likely to attend, a Supercars was crucial we received a three-year 4.4% half a billion dollars’ worth of deals for event. She, along with 10 of her Championship: influence on the hoons and may well be • Cricket commitment for the initiative. BUT ARE THEY WHAT THE SPORT NEEDS? • Moffat for 9th – his result was 20th 4.0% the sport in four years. girlfriends, have already booked to come • Athletics promoting this dangerous street behaviour. to the Gold Coast to see Delta perform 3.9% What do you rate the three biggest Our sport is dominated 65:35 by male 1. Shane van Gisbergen • Coulthard for 5th – his result was 12th • Netball JC: and take in some racing as well. John Crennan 3.2% challenges the sport faces in the next attendees, and initiatives like this will 2. Jamie Whincup • Aerobics generate interest and usher in a new • Van Gisbergen for 8th – his result was If the directors of V8 Supercars don’t Motorsport Contributor 2.9% two to three years? Delta is one of our most successful • AFL generation of fans, some of whom have 3. Scott Mc Laughlin 2.6% female artists and has a huge TV 1st recognise this connection between our • Gymnastics JW: 1) Continued pressure on people’s leisure lapsed or never considered following 2016 CHAMPIONSHIP RESULT IN V8 presence, with The Voice, House 4. Craig Lowndes 2.1% must painstakingly conduct these sports to time as well as increased competition Supercars. sport and the hoon element and ban • Martial Arts Husbands and an upcoming mini-series, • Tim Slade for 13th – his result was 8th, ne of our nation's most referenced 1.6% the most professional business standards and for sports, including new formats and John Crennan 5. Will Davidson • NRL At a grass roots level we have an and to have her as an Ambassador is a this imbecilic and irresponsible victory expressions is that Australians are structures. variants from the large established and 1.5% important obligation as a sport to show huge asset for Supercars. 6. Mark Winterbottom obsessed with sport. • Body Surfing sports. behaviour, then perhaps it’s time for O 1.5% TheCEOs of these sporting bodies normally young girls and ladies that it is possible Motorsport Contributor • Scott Mc Laughlin for 12th – his result • Surfing JC: Can I get a brief comment on the three SUPERCARS, ANOTHER YAWN 7. Chaz Mostert government and police authorities to take only flash into media prominence when The changing global nature of to make it in the top tier of motorsport. In considering such a theory there is no ‘one 1.5% 2) areas I have crusaded on to achieve was 3rd • Volleyball some form of controversy erupts in the sport. automotive manufacturers and clarity 8. Tim Slade size fits all’ when it comes to Australia's top 1.2% improvements in our sport: the action. • Softball Controversy will always be part of sport, both around their product plans. JC: The most inspiring leader in my career sports. The categories vary somewhat in 1.1% was American John Rock who, on 9. Garth Tander My accuracy levels, however, on the 15th • Field Hockey at the elite end and at junior level. Too often we The Supercars Board of Governance popularity, depending on which criteria you Becoming a regional championship his first day, declared no interest in i. HOLDEN EXIT FEATURE Australian Automotive Dealer Association sit in judgement of our sports administrators 3) should replace the self-interest 10. Michael Caruso to 26th positions reflected a solid set of How great it would be for V8 Supercars to use to evaluate your sport – like, for example, and the patience and focus required visiting and entertaining our 20 most the big end of town, where the financial through their handling of the dramas team owners with independent which sport is: At to deal with Asian promoters and successful and “noisy” GMH Dealers. predictions. start the new season in 2017 and ban the versus the incredible hours of dedication, commissioners. John Crennan stakes are highest in the Australian sports governments. Instead, he stated his focus would be • most watched on television most attended commitment and winning strategies they put he phenomenally successful Clipsal For manufacturers it was six Holdens, two burnout ritual. Perhaps take it one step industry, there are basically six sports that with the bottom 20 Dealers to enable • most participated in go head-to-head when competing for the in place away from the media glare. As I have JW: The Supercars Board and Supercars Motorsport Contributor Fords, one Nissan and one Volvo. As fortune favours the brave I will again, noted in a previous article, the demands and JC: What do you consider are Supercars' them the opportunity to overhaul the Commission are in the shareholding further and at the same time work with most searched, and; corporate sponsor dollar. The differentiation opening race event in Adelaide will • responsibilities of running anything to do best assets compared to our major big Dealers and thereby generate a agreement and unless this was a decree in the first edition of this magazine next HOLDEN’S SHOCK ANNOUNCEMENT point of these six sports compared to the the police and government authorities to • the strongest in fan avidity. competitors, in particular the football bigger sales pie. Can you find a way others is the magnitude of sponsorship with the sports industry are far greater and from the Shareholders (Archer and kick off with lots of changes for teams List B - Unofficial Top 10 for those without more complex than running conventional codes? to change the regularity of the series' teams) and voted appropriately it will year, make my predictions and invite some promote responsible driving and have each if we examine some recent amounts, as well as the serious payments to under-performing teams? T factory funding: Interestingly, commercial enterprises. never change journalist to join me and include their tips Andretti and Zak Brown and all being absentee/ their athletes, the full season national calendar JW: Without doubt the accessibility of our and drivers, but is there enough coming of the 26 professional V8 drivers support TO CLOSE DOWN research that covered the most popular sports of events, strong gate receipts, club/team events to 'look in the changing room' We've focused on making sure the rules he 2017 V8 Supercar season is done Why do I go into raptures over the remote location owners. Then good luck with by 'participation' for all Australians over six In Supercars, the man who sits in the big chair JW: ii. The sport should immediately trial in the edition. a media campaign designed to stop hoon Bathurst, up pop two additional new co- memberships, significant television rights and with our Paddock and access to our stay consistent. Change tends to lend 1. Will Davidson commitment this Holden Dealer had made Come years, the top 20 went like this: of the sport is Sydney-based James Warburton. a revolutionary non-championship from the V8 Series organisers? and dusted for another year; however hundreds of thousands of Holden world class mass media coverage. superstar athletes/drivers is without itself to the bigger and better-resourced burnouts throughout the community, with to his local community? Well, when you have these very busy new partners, who have their 20/20 equivalent at our four lesser 2. Mark Winterbottom cars and engines to build locally and sell and owners to try and lead the Walkinshaw Team out 14.4% was the former television superstar peer. People who have never been to a teams getting on top of things much it certainly didn’t finish on the high V8 Supercars must ban the burnout been trained to Holden’s commendable and • Swimming six sports are AFL, Cricket, Soccer, James lights events. a “WE HAVE STOPPED IT” theme. beyond that time, we will be offering world own empires to run, finding a communications 10.8% These dealmaker executive who, on 1 June 2013, race are continually blown away by this quicker. T 3. Chaz Mostert exacting standards on providing premium of its seven-year performance nightmare. Give • Cycling class cars sourced for Australia from GM’s NRL, Rugby Union and Supercars. Whilst took over the reins of V8 Supercars from aspect. The 3-5 March Adelaide excitement will of some other sports, where massively John Crennan customer care, it was stimulating and satisfying process for the leadership group that can cross 8.2% 4. Tim Slade global network. Together with our network me a break please, as I, for one, will not buy this • Soccer the athletes in these sports are the stars of the flamboyant and opinion-polarising At the end of the last V8 Supercar race to see it in fulsome practice. However this buzz 6.0% automotivedealer.com.au | MAY 2017 | 39 surprising results in 2016 took the brands I know I’m not a lone voice in this plea Motorsport Contributor of 230 Dealers nationwide we will continue four different time zones of Australia, France, • Dancing the show and attract all the fan and media Ownership and control of our media again see 26 cars hit the track, with a high 5. Fabian Coulthard of seeing such a positive commitment to the convoluted new business model that's been so personality, Tony Cochrane. for this season in Sydney on 4 December, to provide our customers with exceptional 5.0% attention, the year-round 24/7 responsibility of those sports to almighty new heights. to make this crucial image change for Holden franchise quickly moved to a great England and America. • Basketball 6. Scott Pye products, service and support.” Big lesson here confidently sold to the fans and the media (just 5.0% for the health and wellbeing of the sport falls proportion sporting all new war paint and the newly-crowned champion, Shane Van sense of ‘what the hell’ chagrin and dismay. • Bush-walking The power of the ‘unpredictable’ in major our sport. I certainly don’t want my for big corporations – don’t make promises to the behind-the-scenes administrators. They 7. David Reynolds Knowing the lifeblood of a car franchise is the like the Hallam and Burgess solutions were). 4.4% Gisbergen, live on national television in you cannot keep. Thisis all before you build in the ego factor of so • Tennis naming rights sponsors. sporting codes is profound. grandchildren seeing this hero worship An Uplifting Dealership Experience Sparks flow of new cars from the car manufacturer L-R: Alex Premat, Scott McLaughlin, Tony D'Alberto and Fabian Coulthard. Credit: Vue Images 8. Jason Bright prime time, did a massive tyre burntout Chagrin and Dismay many in this new equation. Perhaps the next big In TV land, Simon Fordham, the most senior nonsense on the track and TV, thinking Today’s current 190 Dealers, Holden owners and from which everything in the business can be no denying the credentials and flows: Used cars, Service, Parts, F & I, it There consider strategic and aimed at building influential person, Roland Dane, is also the 9. Nick Percat that went for at least two minutes. Then, rom a strict business analysis and customers (myself included with a new announcement at the start of the 2018 season of executives who, behind the scenes, plays the In the AFL, the Western Bulldogs’ grand that experimenting with such antics in a suddenly hit me that the heart and soul of this 38 | MAY 2017 | automotivedealer.com.au 10. Cam Waters standpoint, Holden’s announcement on Equinox) now find themselves evaluating GM/ outstanding motorsport pedigrees of Michael Let's summarise what’s new in 2017 for all final victory was hugely popular and owner of the team that has won seven of the amidst gyrating the car to extremes and business (and all Holden Dealers) was soon to will be this team announcing Bernie Ecclestone most important TV pivotal role for our sport, is the sport. The new construction tyre, which with their feet and the TV remote control. car, is acceptable. 17 February that they were withdrawing Holden’s commitment for the next 10 years on Andretti and Zak Brown and on paper it looks on the grid this year, with Swiss import, generating massive levels of smoke and F their service and parts obligations, particularly be ripped out with no further supply of new moving his significant talents to a competitive of the stakeholders. sparked an incredible level of media last nine Championships and who has been from Australia and NZ was a logical and Holdens. has been recruited for the team manager’s job offers a greater surface area but basically This is a very dangerous position for any For the manufacturers it was five Holdens understandable determination. From a after reading recent reports on contentious great. But I cannot avoid recalling the words attention. It was a win for the masses, on the Board of V8s for years. Most of these blackened skid marks on the bitumen, Christmas/summer quiz issues between GM and Dealers on post close- because, as I see it, this person will need Bernie’s sport in NRL. Also Greg Rust, long-time Simona De Silvestro, in a Nissan Altima, sport and it’s the space Supercars has been and five Fords. sentimental standpoint however, it was a Tom Walkinshaw would always convey to me, popular commentator, has decided to hang MOTORSPORT FEATURE Australian Automotive Dealer Association the same compounds, where new names given their only other premiership was 62 years he has claimed the ‘Premiership’. Shane emerged from the Red Bull car, massive disappointment and shock for a down Service and Parts Agreements. capabilities and strengths to work through this In TEAM land those who have announced and Alex Rullo who, at 16 years old, will be in for some time. Nothing changed this large proportion of Australia’s 26 million that success in motorsport comes only with up his Supercars Motorsport microphone, but will be introduced. The Hard tyre will be years ago. Whilst the Bulldogs won the jumped on the roof and pumped the air Like all sports, motor racing serves up its Three weeks after the total Holden Closure ‘interesting’ business model. year with yet another spectacular solo It will be most interesting to see the results population for whom Holden had, in some announcement, some electrical issues with single-mindedness and there being room for new naming rights include Shell VPower the youngest ever in main game V8s. The major changes necessary to take with excitement and jubilation. fair share of characters and, with that, an special way, touched their life at some point. something would suggest to me that Greg is not flag, the winner was really the AFL itself performance by Team Triple 888 and its next year for the Walkinshaw and Garry my Holden I was driving required I make an MOTORSPORT FEATURE the old Soft tyre and the new Soft tyre will the sport to the next desperately needed even higher number of nicknames. Over appointment with Stephen Howlett, the owner only one boss. People changes Australian Automotive Dealer Association Racing Team, Red Bull Holden Racing as the popularity meter was reset after the Holden’s 2013 decision to announce the end going to fade into the sunset. three drivers. Shane Van Gisbergen, Jamie Rogers teams as they take their place on the and Dealer Principal of Tweed Holden/Sharp ONLY TONY COCHRANE CAN MAKE now be a new Super soft tyre. Hopefully monotony of Hawthorn final appearances. level will only take place when the team Unfortunately, each race this year saw time the characters and their nicknames – of local car production from 2017 was again a were a few aspects of this Bathurst Team, Mobil 1 HSV Racing, Tekno So V8 fans will have to adjust their 'racing Whincup and Craig Lowndes (1st, 2nd, grid without any financial support from tough but inevitable call. Any well-considered Motor Group. As I had an hour to kill and There are also some significant changes taking representatives stop self-managing similar irresponsible burnout victory and the reference to them in pit lane – have with Stephen involved in an offsite meeting, I There All of this amounts to a lot of change – some these changes will create a greater chance of evaluation of all the facts including the dashboards' to embrace a 33% change in 4th). Holden and Volvo respectively. This will be treated myself to a tour of his dealership. My announcement that got the red light on my dash place in the areas of our sport where such good, some not so good – but certainly for Woodstock Racing and Harvey Norman Same in the NRL with the Cronulla the Series and allow independent rituals, which our TV commentators seem added a lot to the theatre and colour of this well-established formula for car production SUPERCARS GREAT AGAIN unpredictability with the results as drivers the first time in 26 years that Holden has economies of scale, declining sales volumes, loss 50-year-plus association with Holden afforded flashing. The first being Andretti said this deal in tough times it’s sponsorships that always Team names and a 40% rejig of drivers and Sharks when they turned their fortunes Commissioners to set the strategic to endorse, judging by their supporting fascinating circus. me the chance to inspect around 250 different moves are outside the norm. The sport is about me the highlight will be to see in 2018 some ONLY TONY COCHRANE CAN MAKE Nissan. It is fair to predict, come Adelaide, Triple 888 have won seven of the past of brand equity, huge shifts away from passenger This dealership walk-around, which I did of get treated the most harshly when the bean not provided funding for the Walkinshaw/ dealerships throughout every part of Australia got done in 30 minutes or thereabouts (where is intellectual sports deftness is crucial for adjust. Secondly, a new event in Newcastle around ‘overnight’ and recorded their first planning and transformation agenda. I commentary during this ‘light ‘em up’ cars, and unfavourable currency exchanges, all my own accord, triggered the stark reality of to lose its capable and authentic CEO, James seriously talented young drivers being given a counters introduce heavy cutbacks. Contracts teams. and NZ so my vibe meter on reading a Supercars’ right now. there will be at least another four new nine Championships and need to be HRT team. A fair estimation of funds meant Holden faced a perfect storm around a Holden’s closure announcement and in turn the due diligence in all that?) and Walkinshaw due for renewal with existing sponsors will premiership ever in another dramatically have been saying this until I am blue in mayhem. The V8 series in particular travels to every dealership’s retail heartbeat or otherwise comes Warburton, who is moving on to head up an chance to break through and be trusted with as the year end grand final is a huge bonus congratulated for this outstanding feat non-viable local production model. how this superb dealership/business and SUPERCARS GREAT AGAIN be very hard going for both the Series and the injected from Holden over that period from a reasonably solid base. I had the joy of saying these guys are not just investors, they are The three different storm cells creating these naming rights sponsors rolled out. state of Australia, spending on average 40 outdoor advertising company after just over a full season drive. They have earned the right in tough times it’s sponsorships that always popular outcome for the Rugby League the face and unless it happens you can bet ‘tyre kicking’ over 30 new or demo Holdens others like it, will soon be gone along with all John Crennan cyclone conditions are: 1) those flowing from teams. Hard to quantify, but maybe for every as they constantly strive to build on all would have been in the vicinity of $80 What happened after the 2013 decision to there to be involved and add value to the team. get treated the most harshly when the bean This is far from ideal, as stability and for the sport, replacing Homebush which, By stark and ironic contrast, 15 minutes nights a year in hotel/motel rooms, where on display on the superb 12 car showroom, those staff trained to Holden’s high standards four years in the big chair. Add to that the next through talent, not bringing money to the team. intellectual sports deftness is crucial for Motorsport Contributor Covid -19 being sponsorships, government dollar previously invested in good times, it code. the Triple 888 juggernaut will continue to cease production however is where serious counters introduce heavy cutbacks. Contracts aspects of team strategy and have a plan to as well as the equally impressive lineup on the and values which I too had been the grateful Supercars’ right now. funding and team sustainability; 2) those that may now be more in the area of 70 cents post- million. later after the race last on the 6 o’clock many great stories get shared. questions can be asked of Holden for failing most senior member of the series leadership due for renewal with existing sponsors will consistency is the cornerstone of growth weirdly, did not generate the patronage and dominate our sport. forecourt. I cannot before recall seeing this beneficiary of from the day I started at GMH In particular I really like what I see about Ricky are self-inflicted: television contracts, Supercars Covid. It is interesting to note the renewed interest always keep ahead of the game. Their latest to implement a sustainable revitalisation/ I cannot imagine how even the most gifted be very hard going for both the Series and the Also in the USA, the Chicago Cubs broke national news, the lead story featured many new cars so immaculately presented and as a 17-year-old. team, COO, Matt Braid, who also finishes with The three different storm cells creating these For Sale sign and Team Sydney; 3) out of the recovery given the abundantly obvious Stanaway. John Crennan teams. Hard to quantify, but maybe for every Government and loyalty in sport. If the Harvard passion from the fan base that this new move to recruit Shane Van Gisbergen and In an earlier edition at the start of the polished to the point of perfection. Likewise team manager could run the show in Australia cyclone conditions are: 1) those flowing from blue events, being Holden Exit, Virgin Airlines in the Series from the major fuels and the biggest drought in sports history when Let’s look at the winners and losers of more road trauma and more examples The quiz below covers only those challenges the plant closure would present. My father worked all his life for GMH, from Supercars at year end. This is not a great look. dollar previously invested in good times, it ustralia’s leading motorsport series my identical reaction to the total dealership, Motorsport Contributor Covid -19 being sponsorships, government Receivership and Adderton Mk II. move to three cars further strengthened season, I challenged the motor sport media its beginnings in 1926 through until 1968. His and survive the machinations of a small may now be more in the area of 70 cents post- has a lot to contend with as it prepares The various state and territory governments Business School were to conduct a study regional road race event certainly will in 2016 of disgraceful social behaviour with the nicknames totally removed from their real Despite commitments at the time of including its commanding location, its layout, In this same vein, one of the highlights for this funding and team sustainability; 2) those that lubricant companies. Both Shell and Mobil they won the World Series and created service to Holden coupled with my association Covid. to restart its racing season. With only are very generous financial contributors to their stranglehold on the Championship. to have a crack at tipping the card for 2016. announcing the closure, Holden did not the clinical cleanliness of every conceivable $6-8 million business having four owners/ are self-inflicted: television contracts, Supercars A The primary components of the Supercars increasing number of hoon drivers where name. If we were to include a derivative of 52 years in various forms, meant my Supercars. Given their tough road ahead with never-before-seen celebrations and media season has been the performance of Cameron For Sale sign and Team Sydney; 3) out of the two races conducted over seven months, economy are television rights, sponsorships will join Caltex this year with naming on the impact on the V8 fan base of this late November. V8 Supercars considered deliver on their promises made six years department, the striking professional Government serious budget deficits already coming into However, the leaders of this sport must List A reflects the Top 10 for this season. To set the right example with the ‘courage of their given or surname the list would family had some connectivity over a 90 year shareholders in Martine, Ryan, Michael blue events, being Holden Exit, Virgin Airlines and the next not scheduled until June 27, and government funding. It’s not unreasonable hysteria. burnouts are their trade mark ritual. It earlier. Holden’s then Director of Sales corporate dress code and grooming of all Waters (23), who has achieved great podium ustralia’s leading motorsport series play, one could assume all governments will span. Perhaps that’s why my REAL WORLD Receivership and Adderton Mk II. the organisers face a considerable range of to assume each of these crucial revenue streams 40% jumble-up of the stars, their teams their big news for the year at the Adelaide surely realise it is actually weakening the Whilst Triple 888 dominated with a 1st, needle’ I nominated my top 26 for the year. and Marketing announced one week after the staff, the beautifully furnished Service has a lot to contend with as it prepares The various state and territory governments be taking a very hard look at ‘Essential’ versus rights, and it appears Castrol will also be seems a weekly event that we hear from be need 10 pages, as it is hard to think of experience at the dealership of the impact of Average of Championship results. As I constantly state, the lifeblood of this challenges as the show gets restarted. are under pressure – both for teams and Series. the plant closure on 20 December 2013 an Customer lounge and large viewing window to restart its racing season. With only are very generous financial contributors to ‘Nonessential’ expenditure contracts. It’s not sport, for when Triple 888 gets stronger it 2nd and 4th, it was healthy to see Davidson, After analysing my year end results I can the sudden closure, created such a sense of A The primary components of the Supercars majoring on the Rick Kelly Nissan entry. and brands, I sense the findings would pre-season launch was announcing Delta These three examples illustrate the our police superintendent talking about anyone who is anybody in the sport who advertising campaign: ‘HOLDEN BRAND into the 16-bay service department, and sport are new, young, skilled drivers who, on Supercars. Given their tough road ahead with disillusionment and hit me like a ton of bricks. Placings 2014 - 2017* two races conducted over seven months, economy are television rights, sponsorships Covid-19 has thrown up many serious issues Here is some commentary and opinion on each hard to forecast government money going into understand the reluctance of the journalists HERE TO STAY’. He stated the campaign then to cap it all off a bustling five star fully Comparison of Championship serious budget deficits already coming into importance in sport of refreshing the has a counter-adverse impact on teams with Mostert, Slade and Caruso slide into the how serious this hoon driving situation is has not had their real name shortened or their own merit, in feeder ranks come through and the next not scheduled until June 27, and government funding. It’s not unreasonable for all sports, however Supercars have also been of these disturbances to the momentum of the the sport in a manner, to which Supercars have highlight more harm than help to the Goodrem as Supercars 2017 Ambassador. was to ensure customers understood the equipped showroom café/coffee shop. play, one could assume all governments will to walk the plank. As my report card Placings 2016 v 2017 the organisers face a considerable range of to assume each of these crucial revenue streams hit with a number of other heavy predicaments Supercars business. previously been accustomed, could be seriously trophy cabinet. It’s like a blood transfusion less commercial and technical capability. top 10 versus the prior year at the expense in Victoria and I’m sure the same problem slanged off in some way, e.g. Larko, Richo, Holden brand would remain in Australia. He and place pressure on the veterans. be taking a very hard look at ‘Essential’ versus challenges as the show gets restarted. are under pressure – both for teams and Series. to wrestle with. This is not a perfect storm, it’s scrutinised and squeezed. Then in DRIVER land we will see massive sport. If the AFL or NRL were to see a 40% What a yawn, and pure marketing spin, as shows, I failed. also said, “Over the next four years we have ‘Nonessential’ expenditure contracts. It’s not more like a cyclone they are facing. Sponsorships with the injection of new life and hope into of Coulthard, Rick Kelly, Reynolds exists in other states. Covid-19 has thrown up many serious issues hard to forecast government money going into As unbelievable as it sounds Supercars are Unfortunately I see nothing our sport is Tipsters’ results Here is some commentary and opinion on each change. Those who are on the move to new realignment of their athletes and Teams, the Goodrem brand has no relevance to the the game. It provides unlimited new angles (dropped from 3rd to 16th) and Courtney. 22 | MARCH 2020 | automotivedealer.com.au for all sports, however Supercars have also been of these disturbances to the momentum of the the sport in a manner, to which Supercars have So significant is the combination of both This is a double-edged sword. Firstly, if for currently pushing to move the calendar to a doing to introduce new initiatives to even I tipped Jamie Whincup to win the hit with a number of other heavy predicaments previously been accustomed, could be seriously Covid-19 issues and other untimely dramas, I example, a sponsor at the start of the season summer season. This could also create some for the media to explore and increases Supercars business. Teams are Scott McLaughlin to DJR Team there would be a fan revolt. It’s a shame our V8 audience and it’s doubtful it can drive Championship and he came second. automotivedealer.com.au | DECEMBER 2016 | 43 In the February edition this year there were to wrestle with. This is not a perfect storm, it’s scrutinised and squeezed. would suggest Supercars need to immediately had signed on for $500,000pa, what would disquiet with governments, particularly in public appeal at all levels of the game. Sport the competition. There are endless options List B is the concept I introduced after more like a cyclone they are facing. Sponsorships establish a specialist ‘Crisis Cabinet’ (this their expectation be for a reduced figure given northern regions which hopefully does not put Penske, Garth Tander to GRM, Nick Percat any incremental dollar for new fans of the to do this if the sport cares enough to think last year’s results that shows the Top 10 four tipsters who had a crack at predicting As unbelievable as it sounds Supercars are term maybe overdramatic but not when you the revised calendar, fewer races, experimental at risk contracts currently on foot. organisers can't exercise more control over is an emotional business and routine is the the Top 10 come year end. Again, making So significant is the combination of both This is a double-edged sword. Firstly, if for currently pushing to move the calendar to a hear feedback from stakeholders in the Series unproven new racing formats, loss of customer outside the square, like all other elite sports results of those drivers in teams who are Covid-19 issues and other untimely dramas, I example, a sponsor at the start of the season summer season. This could also create some who feel many major issues require urgent coach’s box experiences and limited media Holden and Tim Blanchard to BJR, Scott Pye to the franchised Teams in this crucial driver series. enemy of emotion. would suggest Supercars need to immediately had signed on for $500,000pa, what would disquiet with governments, particularly in action) This Crisis Cabinet would address both attending the races until we come out of do. not the beneficiaries of factory funding, the assumption of no change from current The news that broke on February 17th this year, establish a specialist ‘Crisis Cabinet’ (this their expectation be for a reduced figure given northern regions which hopefully does not put transformational change and problem solving. current Covid restrictions? A sponsor may feel WR, Jason Bright to PRA, Dale Wood to area of our sport. a week prior to the first race in Adelaide, that When one team dominates the results year so congratulations to the Tekno Team standings this year (statistically no other driver term maybe overdramatic but not when you the revised calendar, fewer races, experimental at risk contracts currently on foot. it’s reasonable to renegotiate a 25% reduction Holden would exit Australia, stunned the entire Where is the Board and Management’s Independence is needed in the sport. hear feedback from stakeholders in the Series unproven new racing formats, loss of customer Is it unreasonable to suggest that the current now and a further 15% if certain KPIs were not Erebus, and one further change still to be on year, the sport becomes flat, lacking in can make it to the top 10), this is how each Holden nation. The flow-on effect of Holden’s exit from who feel many major issues require urgent coach’s box experiences and limited media structure and leadership of Supercars does not achieved by year end. We have a situation in which the most MOTORSPORT Australian Automotive Dealer Association tipster rolled: action) This Crisis Cabinet would address both attending the races until we come out of have the capacity or capability to handle all the Supercars is profound. The impact of 16 of the announced at the LDR team. At V8 ORGANISATION level there are excitement and unfortunately. it sucks the The news that broke on February 17th this year, transformational change and problem solving. current Covid restrictions? A sponsor may feel urgent concerns? They will be fully stretched Teams will be trying extremely hard to sell the 24 cars on the grid carrying a defunct brand a week prior to the first race in Adelaide, that passion tank dry; fans lose interest and vote it’s reasonable to renegotiate a 25% reduction just managing business operations thrown benefits of the E Series, however that program, and logo for the next two years is a marketing basically only two changes one could Fogarty: got 1 in Top 3 (Whincup) and Holden would exit Australia, stunned the entire Mark Is it unreasonable to suggest that the current now and a further 15% if certain KPIs were not up from the pandemic. The added brain as well promoted and televised as it has been nightmare. nation. The flow-on effect of Holden’s exit from There will be two new full season drivers 7 in top 10 with three offs – Davison, R Kelly, structure and leadership of Supercars does not achieved by year end. power and specialist expertise and experience with enthusiastic social media driver posts, manner by establishing the standards and have the capacity or capability to handle all the Supercars is profound. The impact of 16 of the It was concerning to read a report of a team guiding principles for the teams to follow. necessary to implement robust solutions to did not register on my passion meter. Not The casualties and loss of jobs in sport with Courtney. urgent concerns? They will be fully stretched Teams will be trying extremely hard to sell the 24 cars on the grid carrying a defunct brand owner suggesting car brands are now irrelevant Yet, the governing body also has a sales team navigate the business threats noted below will sure Sponsors would be prepared to accept E coaches and CEOs as a consequence of fans just managing business operations thrown benefits of the E Series, however that program, and logo for the next two years is a marketing as the sport is only about providing great MOTORSPORT are front and centre constantly, morning, noon in the market place competing vigorously have to come from either new ownership/ Series represented any sponsorship value as its Australian Automotive Dealer Association and fanaticism, versus shareholder pressure up from the pandemic. The added brain as well promoted and televised as it has been nightmare. entertainment. This is bollocks and is treating and night, 24/7. against all the teams in the sport for corporate Gover: got 1 (Whincup) in top 3 and 8 in management and or a highly skilled team of appeal was artificially inflated by one-off sports on a board in regular business does not bear Paul power and specialist expertise and experience with enthusiastic social media driver posts, Holden loyalists with contempt given the sponsorship. It was concerning to read a report of a team external specialist advisers. starved audiences during lockdown. comparison. Top 10 with two offs – Percat, Courtney. necessary to implement robust solutions to did not register on my passion meter. Not significant investments in the sport over the 40 | FEBRUARY 2017 | automotivedealer.com.au Conversely, the business affairs and results/ WHEN CAR-MAKERS SNEEZED, owner suggesting car brands are now irrelevant past 50 years by the massive Holden fan base. scoreboard of BHP (for example) would only It is the same in Football, Cricket and NRL. navigate the business threats noted below will sure Sponsors would be prepared to accept E Regardless of whether it’s new ownership and/ Secondly, if recessionary conditions and a Even off the track or sporting arena, if a high- as the sport is only about providing great be referenced twice a year at reporting time, That’s the definition of ‘tough’ when in sport have to come from either new ownership/ Series represented any sponsorship value as its or a’ Crisis Cabinet’ model that is urgently much tougher economy plays out over the profile sporting CEO got booked for exceeding Ashbee: got 1 in Top 3 (Whincup) entertainment. This is bollocks and is treating ON TRACK WITH ‘CRENNO’ versus every day for the full season when a as you seek to recruit more customers; the Carrington management and or a highly skilled team of appeal was artificially inflated by one-off sports needed, the person central to any recovery and coming years, corporate and retail marketing .05 there would be media frenzy for a month Holden loyalists with contempt given the team’s results are subject to scrutiny, even governing body are in the same market at the external specialist advisers. starved audiences during lockdown. reset of Supercars must be former supremo, budgets will be hammered. Unfortunately and sponsors would threaten to withdraw and 8 in top 10 with two offs – Davison, significant investments in the sport over the during training. same time trying to achieve the same end. In Tony Cochrane. His proven leadership and funding from the club. Whereas in most cases, Regardless of whether it’s new ownership and/ Secondly, if recessionary conditions and a past 50 years by the massive Holden fan base. business you don’t get that double whammy RACING CAUGHT PNEUMONIA The more compelling issue Mark Fogarty’s Courtney. if a high-profile business executive did the or a’ Crisis Cabinet’ model that is urgently much tougher economy plays out over the effect as you work hard at winning customers. THE BUSINESS OF MOTORSPORT IS TWICE The scoreboard microscope same thing, it would not rate a mention in the needed, the person central to any recovery and coming years, corporate and retail marketing article raises is why have the big names 28 | JUNE 2020 | automotivedealer.com.au media. I don’t think it’s over, but I do think most John Crennan: got the quinella with first and reset of Supercars must be former supremo, budgets will be hammered. Unfortunately in sport creates far greater The compensatory aspect of working in sport ‘walked’? There is no doubt in my mind as however is the constant adrenalin rush, the Tony Cochrane. His proven leadership and stakeholder pressure for the The stakes have risen even higher in the past teams have been far too slow to adjust and second (Whincup and McLaughlin) and 8 out AS TOUGH AS THE BUSINESS OF BUSINESS massive passion factor and the fact that all to why…it’s the knock-on effect of the car FEATURES Australian Automotive Dealer Association three years with the advent of social media. reset sponsorship mining techniques. The of top 10 with two offs – R Kelly and Pye. executives in charge of the club, your gut-wrenching efforts and preparation companies’ dramatic pullback from the sport to compete kick in every week when the flag 28 | JUNE 2020 | automotivedealer.com.au team, coaches and the athletes Anyone on the street now has their own commercial operations are most often the John Crennan drops or the siren signals the start of the game. John Crennan in both dollar terms and key car company platform to tell the world what they think orphans in the team’s structure. Article accurate as at 22/11/2017. Motorsport Contributor than it does for the CEO, the through Facebook, Twitter, Instagram and Corporate business cannot match that buzz. Motorsport Contributor executives’ motorsport passion factor. In the finance director and other YouTub e. 20-25 years period Foges touched on, I would So despite my strongly held belief that the It’s worth diving deeper into fearless Fogarty’s key executives of a private or Every race team, every driver, every football sports business is at least twice as tough and estimate the Holden and Ford investment ne of my favourite topics when I get club and footballer strive to boost their article, as seldom does anyone in the motor publicly-listed regular business. demanding as the general business world, I the chance to have a good quality yarn followers as social media builds brand equity levels in the teams and the sport generally to business associates in the sports can’t recall too many, if any, wanting to bail out sport media room have either the courage O ‘Scoreboard pressure’ undoubtedly is my (and smashes it if used inappropriately). of the role they enjoy so much in sport. would have gone from $15-$20m a year to REGULAR CONTRIBUTERS industry is to talk about the difference between number one reason why sport business is But the number of eyeballs that look at their eading motor sport journalist, Mark or capability to venture into the commercial Australian Automotive Dealer Association working in sports business versus general much tougher and demanding than regular iPhones and computers nonstop for 15 hours And whilst I don’t have any hard stats, all my around $3m annually today. (Originally, their corporate business. (‘Foges’) Fogarty, in early August wrote aspects of this sport/series. corporate business. a day can’t get enough of it. It also means contacts with up-and-coming young men and social media has made the sports scoreboard commitments included cash sponsorship, My sporting reference points with executives women show that there is a massive interest a most insightful article in Auto Action Another factor is the fan base and the so much larger than previously and not just in from the next generation in being employed L Let’s first look at the teams’ combined results bodyshells, parts, Dealer activations, who have experience on both sides include demands they place on their team for results, the results each week, but also on social and magazine about sponsorship in motor racing. AFL club presidents, board members, CEOs, in the sports industry. But their block and versus what the shareholders demand from the behavioural grounds. Again, this scrutiny is so this year and test Mark’s theory that unless you hospitality, displays and advertising.) marketing chiefs, golf administrators, lawyers, tackling capabilities need to be well-honed The premise of his critique was summed up in CEO of a regular business enterprise. minimal in the business world. motor sport CEOs and more. before stepping up – a lot earlier than if, for are a top team you won’t be in the big money. instance, they decided on a career in the bank! the introduction as “AA’s pernicious pundit managed to have Holden to reverse The fan pays $100 a year to the club for a My final strongly held belief surrounds the When Holden and Ford (and Nissan) were All agree with my theory that conducting a Or put another way, unless you bring in the membership and has 100 strong opinions at pressure the governing body applies in sport. remembers a time when big brand names their decision. Another bullet dodged sports business is at least twice as hard, tough The business of sport is not for the faint big sponsors there is no way you will be a top fully immersed in the sport and contributing the end of each week after every game or race hearted. The scoreboard allows no place for to conduct the factory team. and demanding as conducting a regular or Let’s take motorsport and the elite end of were all over the leading cars”. these big dollars, you could be sure the for HRT. Likewise, the talents of the people required in on how the club or team should perform. anyone to hide. team. non-sporting enterprise. V8 Supercars. They are placed in charge of FEATURES Australian Automotive Dealer Association a race team to ‘create’ the machinery verses Meanwhile, the shareholder of a public same amount again (taking it to $30-$40m) 1989 I presented a plan to Holden to set up There have to be some reasons for these conducting the sport in a professional, ethical A summary of HRT’s roller coaster ride: I have a great base for drawing comparisons, other sports, is in my mind, far more complex company may invest over $100k but have Foges has always been one for thought- History now shows Holden’s wisdom in added levels of toughness and demands to virtually no voice in how it operates. The Teams Combined Performance results to would come into the teams/sport with the our own team brand and it would be called CONGRATULATIONS HOLDEN ON 500 having run the HSV Car business for 20 years and demanding. provoking commentaries but this one was run a successful motor sport business versus and in parallel, also conducting the business high-powered contacts and influence the key HRT from the start of the 1990 season. • The JV program with Larry Perkins not firing us as, within a few months, Craig a car business or, even more broadly, for the date in 2019 are listed below. The number on affairs of the HRT Racing Team for 15 of My next strongly held belief surrounds the particularly pertinent and resonated with me, chairman of any AFL club versus, his chairman in 1988/89 was strained and difficult. Lowndes and Peter Brock had transformed those 20. I can confidently say that HSV was scoreboard. the right-hand side indicates my assessment of executives of the car companies had in the role of an external successful business. as from my perspective, the highest priority, by a ‘breeze’ to run compared to the constant Holden were not in a position to licence Tom and Larry’s personality our team into the Championship In sport the scoreboard is omnipotent. It’s in the sponsorship dollar rankings of these teams corridors of power in corporate Australia. ‘tornados’ that ripped through HRT over this PROFESSIONAL AUTOMOTIVE FRANCHISE LEGAL ADVICE a mile, is the need for major improvements in These are my strongly held beliefs on why… your face every second of the game or the race the HDT brand to our new racing entity differences never aligned and it all powerhouse Holden would proudly sustained period. in the top eight (or 16 cars): The persuasiveness of the CEO or Marketing and then following that whether you win, lose HELPING YOU MAKE APPROPRIATE, EFFECTIVE BUSINESS DECISIONS WITH CONFIDENCE the commercialisation and attraction of more Firstly, motor sport is the toughest of all the No. 2 as Peter had already registered the HDT showcase for many years to come. CHAMPIONSHIP WINS or draw every facet and statistic is analysed ARE YOU AWARE OF YOUR FRANCHISE 4,383pts. Director of Holden, Ford or Nissan going nearly finished in the courts but for Let me elaborate. elite sports, be it football, cricket, golf or tennis money to the sport and teams. “There was a in fine detail. The media covering sport is RIGHTS AND OBLIGATIONS? 1 DJRTP Shell V-Power No. 1 brand. This caused Holden much anxiety Holden’s intervention. because it involves the team, the athlete and ARE YOU GETTING THE MOST FROM 3,576pts. to speak on behalf of or with teams to their Our HSV car and HRT racing businesses incredibly competitive and they are relentless time when motor racing was awash with the • February 2003, the Bank of Scotland the complex mechanical object. YOUR DEALERSHIP FRANCHISE? A sound understanding of your Dealer equivalents at the likes of a CUB or Dulux was BRAND HRT - THE END OF AN ERA... after the split with Brock and from that achieved peak success in 2002 (just prior to in their desire to create a headline that has an 2 Triple Eight Red Bull HRT No. 3 biggest commercial brands in the world in 3,231pts. receivers step into the Walkinshaw edge of controversy to sell more newspapers or We advise on the legal aspects of Automotive Agreement, Franchise Code and Motor Traders day Holden’s legal department paid • The Gibson Team late 1992 started the Walkinshaw collapse). The racing arm was The mix of these three elements to extract crealegal.com.au 3 Tickford Supercheap Auto palpable. UK Empire, which meant HRT gets John Crennan close to a $10.1m business, whilst our HSV car peak competitive performance has a massive attract more viewers. Compare the readership Franchising, providing practical, sensible Legislation is critical in business planning to the ’70s and motor racing was neck and neck 3,085pts. No. 7 dramatically more attention to any third ‘broadcasting’ they would be taking operations was a business 10 times bigger in levels of a newspaper’s business section versus multiplying effect on the product/game that and commercial solutions on all dealership avoid unforeseen conflict and financial risk. with the VFL (now AFL) in terms of big-name 4 Erebus Penrite No. 4 caught in the mess and our six- times financial turnover, and in staff, approximately ultimately plays out in the sports arena. There a sport section as well as the location of these 3,043pts. Although sponsorship procurement was not parties with whom Holden had dealings, over from HRT. Holden’s Motor Sport Motorsport Contributor franchising, property and business matters. WHEN RACE FANS HEAR HOLDEN DROP Championship Team is decimated. four times larger, with 258 people compared to are of course other sports that have a reliance respective stories in the dailies. sponsorships,” he wrote. Tickford Monster part of my role at HSV/HRT, it somehow 5 No. 8 who may need the Holden name in their Manager John Lindell was not denying the racing business with 58. on some third element e.g. the horse in horse 2,698pts. Just think for one moment about the level of There was no way we were going to racing, the golf clubs in golf, the racquet in kept landing on my desk. My analysis of marketing. the rumours. After a very destabilising Motor sport not only demanded twice my TV programming dedicated to sport versus automotivedealer.com.au | MARCH 2015 | 57 6 BJR Freightliner No. 5 tennis, the bicycle in cycling, however nothing Contact Steven Crea on 0411 777 695 or [email protected] for a confidential, obligation free discussion. He went on to classify today’s team sponsors 2,279pts. dodge the bank’s bullet, as it took on time, but 10 times more callouts to deal with business. It must be at a ratio of 100:1. It’s all the sponsorships I was involved in over six months we finally managed to get approaches the complexity of assembling headaches, disputes, legal squabbles and all because the results on the sports scoreboard by various investment levels, saying that Shell 7 Mobil No. 6 The news of Holden dumping the cannon ball proportions. hundreds of moving parts and components to 2,256pts. this 25-year period validated my belief that WALKINSHAW IN FAVOUR OF TRIPLE 888 Holden to cease their encouragement forms of constant protective strategies to and Red Bull are clearly the largest investors build a race car. Kelly Racing Castrol Walkinshaw ownership in favour of Triple of Gibson Motor Sport and back our counter the attacks from competition and even 8 when Ford and Holden sales commenced March 2003 Holden go to the UK and the governing body themselves. and big names in Supercars, with a fair way 8 was predictably controversial, as during new plan for the upcoming 1993 • to sneeze the sport caught pneumonia, and back to the likes of Supercheap, Monster, My guess is Red Bull Racing would have the buy the team from the receivers, then the 90s we had built an HRT fan base of season. We dodged this bullet. all the associated excitement and enthusiasm 56 | MARCH 2015 | automotivedealer.com.au Castrol and Mobil (noting that they only largest external sponsorship and have an massive proportions. As mentioned in a find on their return that the V8 Racing John Rock is the man to thank for the last of all those connected quickly declined. This authorities will not permit a car V8 SUPERCARS commit to a pittance of their glory days in the enormous advantage over every other team in previous article, I attribute much of that • Six months into the 1993 season and 421 wins was most evident with the respective Dealer ’80s, ’90s and early 2000s). He then outlines the competition, with my estimate of around fan phenomenon to the power of the Brock things were not working out with new manufacturer to own a team. organisations when Dealer Principals and John Crennan the bottom level contributors, who tend a $2.5m top-up per year from Holden. No following when he joined our team in 1994. Team Manager Neil Lowe and driver their Sales teams were in attendance at races, Motorsport Contributor • June 2003, Mark Skaife then acquires On April 2, Holden proudly pumped By this point, they have usually passed their to be motor sport enthusiast/related party other team in the series receives any cash Wayne Gardner. Tom was fed up and sport, both here competitive peak and come to the realisation and on the Monday after a race the showroom In any elite level of motor companies. HRT from Holden and sets up a new- out a media release after Race 4 in that they know little, other than racing, and sponsorship from Holden, Ford or Nissan. But There emerged two schools of opinion come August he insisted I shut the and overseas, I would guess that in the top 12 and service department would be abuzz with with most of them delivering little more than therefore need to go as long as they can in the look HRT. - 2015 STOCKTAKE, 2016 RELOADand just two from 2013. The Top 10 Club MOTORSPORT Australian Automotive Dealer Association drivers in each category you would generally certainly, the Shell and Red Bull deals make following Holden’s termination of the team down and hand HRT back to Tasmania,announcing that this took their an atlas. main game to maintain historic income levels. the staff excitingly analysing the results, not find an even spread of all four varieties. In Foges makes the point that unless you are a Mark’s assessment spot-on that the serious Ryan Walkinshaw/Adrian Burgess-lead Holden. I fought a massive campaign is extremely hard to break into. Of the 33 each case, your dealings with them need to be to mention these same areas in the dealership • Late 2007 (a best-selling book will one Series Championship victories to 500. By any discussed and debated, on everything from My tolerance levels of driver managers were Of the 30 main-game V8 drivers from season very top team you don’t get the big money money sponsorships sit with these two teams, team. One opinion was ‘no big deal’, as to reverse Tom’s instructions because very low, as I often found their financial diplomatically adjusted. 2004, there are only seven still racing at top full of race posters and driver point-of-sale day be written on how it occurred), Over these 46 years there have basically been different mainstream drivers who have lined objectives (including their 20-25 per cent level. During the same period, there have any more, and that Supercars bosses need renno’s HRT gold medallists in the writing was on the wall for a long standard, this is a remarkable triumph. who gets paid what, to who should retire, all Whilst we can see a wide variation in the and the results clearly reflect that. Then so on of my concerns it would impact the John Crennan ON TRACK WITH ‘CRENNO’ commission) at odds with the objectives of been 50 drivers come and go as V8 Supercars to go back 20 years plus another decade to material. “Team of the Century” (1988 -2016) Tom makes a miracle return and personalities of top drivers, with the fans being down the ladder, where performances would three teams that have been the mainstay up on the grid over a full season for the past the team. I still hold that view, with a few mainstream drivers. period based on over-promise and under- HSV business, plus my pride could not able to choose for themselves whether they like gets Holden’s backing to re-purchase listed above (with two exceptions: Whincup the couldabeen scenarios and who were the exceptions of driver managers who finally ‘got realise how big the sport used to be. His final delivery. This compared to Triple 8, who Motorsport Contributor or loathe their perceived personality, there are lasted just one season, as this tough seem reasonably commensurate with the My review highlighted, however, that if you C bear the thought of handing the HRT HRT from Mark Skaife, but the V8 Holden’s first victory came in August 1969 at behind Holden’s success rate of 500 wins: three years, there have only been 13 drivers it’ and recognised the number one priority for Some observation: “There was a time when big After a near 30-year connection, the three common traits in all racing car drivers and Ingall) was comprehensive in terms of main oxygen thieves in the season. the driver is their responsibility to the team sport can kill so many aspiring careers. Drivers guesstimated sponsor income rankings. are well-connected and genuinely understand had dominated for Holden over a sustained brand to arch rival Fred Gibson. Had I CAN ANY RACING CAR DRIVER JUSTIFY that I respect and admire greatly. major motor sport news story of 2016 has authorities step in and refuse to grant the Surfers Paradise track, with Norm Beechey figure in this elite performance band of the and their boss, not manager. over 35 are now finding more pressure from a name brands would fall over racing. Now, the commercial and contractual side of their younger generation of drivers. Ten years ago failed to change Tom’s mind the TWR/ Tom the franchises. Then, after a lot 1. HDT, under the leadership of Harry Thefirst and most obvious is their skill unfortunately, they’re just over it.” been Holden’s removal of the HRT brand sport. In 1998, 1999 and 2000, when the HRT team 30 per cent of drivers were under the age of 30 HRT connection would have only had in his Monaro GTS 327. Craig Lowndes took the official and non-official awards, in driving and controlling a race car – it of ‘argy bargy’, the authorities finally involvement with the TWR Teams in the Forgetting A FEE OF US$31 MILLION A YEAR? was running at peak performance, we had – this year it’s 36 per cent, and the figure seems Firth, John Sheppard and Peter Brock, never fails to amaze me. No one can truly and financial support from the Walkinshaw the two premium drivers in Craig Lowndes set to climb. a six-year (1988-1993) life and. who appreciate their capabilities unless they could approve Tom to compete as new owner victory 100 in Tasmania on 17 March let’s take a look at some FACTS, with a brief and Mark Skaife. Our payments never went Performance Group to an opposition HRT Gold Medallists (L to R) Craig Lowndes, Tomas Mezera, Ron Harrop, Paul Weissel, Jeff Grech, Chris Dyer, Peter Brock halcyon HRT years. circa 1970-1987 sit alongside a driver as they perform their factor possibly making drivers edgy TWR were awarded the tender to set up knows, Gibson Motor Sport mighty of HRT. Just as limited are the teams whose superior John Crennan beyond my 12.5 per cent formula for our Another Holden Team. magic for 100 laps flat out, where performance is dealing with the uncertainty surrounding the Brock replacement business from a still be HRT. We also dodged this stocktake on V8 Supercars, as Season 2015 CEO - Nissan Motorsport driver’s fee, regardless of their superstar status. Ken Clayton, Head of Finance; John 2006; Jamie Whincup notched up the 400th in performance has enabled them to also be is measured for everyone to see in tenths of a career opportunities after racing, be that 45 | SEPTEMBER 2019 | automotivedealer.com.au total of 12 enterprises that submitted. The bullet which, weirdly, was fired from • 12 December 2010, Tom sadly Being totally opposed to dealing with third 2. HRT, under the leadership of Jeff Grech t the time of going to print, the V8 nears its completion. Then,and still now, the containment of driver second. at age 25, 30, 35 or 40. Most drivers have The origins of HRT can be traced back to Loveridge, Head of Marketing, and Don fees is crucial to the survival of teams in devoted their lives to racing from their early consistent Top 10 season performers at the Thesecond is their level of competitiveness June 1987 contract read that TWR would within. succumbs to cancer and the 2011 Tasmania in November 2011, and Shane Van party managers or management companies Australian motor sport. I keep scratching my teens, putting Go-Karting well above a formal exactly 30 years ago. Wylie, Head of Engineering, with the from 1995–2002, and Supercars Racing Season had only one which surely measures amongst the highest in head, asking myself the question, in the case of education. Many V8 Supercar drivers have also have first option to conduct Holden’s season starts with Tom’s widow expense of so many others. all sports, or any occupation for that matter. presenters being Neil Pogson, Planning and Gisbergen the 500th a few weeks ago. meant we would work our way through event remaining - at Homebush, during ehind blockbuster movies there are a few teams, how they appear to pay so much felt their natural extension, after or during On 17 September 1986 a crucial meeting, V8 racing operations should they decide • 11 October 1995 at the Nikki Hotel in Martine assuming ownership and Drivers John Crennan, Marketing. A always talented producers and directors, outside of the guidelines I used. I think maybe Thirdis their courage. We tend to forget how driving, was to invest in owning rare and their casualties own Sydney (a few days after our Bathurst many of the awkward areas of a contract. Triple 8, under the leadership of Roland behind premiership football clubs are it’s a case of the tail wagging the dog in some team, however success is coordinated by the planning department, to again enter a factory team to replace their 24-year-old son Ryan becomes 3. the first weekend of December. B dangerous motor sport is and how when a who consistently finish a season team and driver manager relationships. high, due to lack of business training and Peter’s HDT racing arm. Mid-October at engine disaster), Holden executives In reviewing race stats over this 47-year span, Drivers skilled sports administrators and coaches, and racing car driver straps themselves in, they are took place at GMH Headquarters. My diary This is where the connection to HRT the figurehead of the Team. These included areas such as performance Dane from 2010-current. getting a great mix of results and behind successful racing teams are brilliant risking their life like no other athlete in any understanding. If Let’s compare the overseas drivers in the top Ross McKenzie and Kevin Wale engineers and technical staff. other sport. If the organisers of motor sport go notes show attendees were Tony Hyde and began, because a key piece in the marketing Melbourne’s Regent Hotel, Walkinshaw there was only one race per event for nearly outside the Top 10 will always advance the income bracket with those in Australia. In V8 Todd and Rick Kelly are an exception to criteria, contract period, exclusive driver to great lengths of warning on entry about how advised me our lack of success was On the Monday evening following the performance uplift across the ENTIRE 25 it’s the ‘stars’ that generate the Supercars, my guesstimates of the three highest the rule and are very fortunate to have Ray Borrett, Engineering; Roger Gibbs presentation centred on a meeting and his highly impressive 30-year-old Nevertheless, dangerous motor sport is for a spectator, you 25 years until race formats were changed to notion that if they were given the same paid drivers (with fees and endorsements gifted business brains, quickly picking up seriously impacting their marketing/ • 16 August 2016 Holden make the commitments, non-involvement in dangerous As in all sports, you can seldom take a accolades and who will always be the centre of can probably multiply that danger 50 times for and Neil Pogson, Planning; Ed Jaworski, between Ray Borrett, John Crennan and Finance Chief John Bradley offered to Homebush race, the Series conducts its gala drivers was a critical component of success, combined) would be Craig Lowndes in the the fundamentals of people and financial image and gave me notice they attention. The celebrities, footballers and the the driver. Finance, and from Marketing, John Lindell, double my Holden salary, so Crenno announcement they will discontinue embrace two, and in some cases three, races sports, driver fees, bonus incentives, fitness 46-year chunk of history and not witness equipment/car as Jamie Whincup they racing car drivers are the personalities that get region of AUD$1.6 million per annum, Jamie management. One mistake they did not Tom Walkinshaw only a month earlier, evening, where officials, team executives, then the sport has some challenges. Whincup and Will Davison in the $1 million courage fascinates me as never have make was to pay themselves or any of their Grant Steers and John Crennan. immediately signed on to run the new intended to remove our factory status their factory association with the credit for great performances and results – Drivers’ on 10 November 1986, when Tom was ‘Gold Medals’ to Marg Curtis and Andrew Mc Kenzie per meeting. This meant the gun drivers of programs, personal sponsor limitation. This some seriously wild rollercoaster rides and would always be on the podium and be and they often deserve it! to $1.2 million range. I heard a driver reference the danger factor or contracted driver’s unsustainable fees. entity after 25 years of Holden corporate and rights to use the HRT name at Walkinshaw and move their sole drivers, media and assorted VIPs gather to display an ounce of hesitation in the quest for pitching for our support to compete with In the next tier, my guess is Mark So whilst we may raise our eyebrows at the 70s and 80s had ‘win’ stats potentially half ‘momentum destroyers’. The first bombshell to Championship contenders. Well you can drive Thefans are not interested in behind the victory or a great race result. The Agenda was simple: prepare a life . year end. To save the HRT team this support to Triple 8 Racing. At the ensured you really got to know your driver as a question needs to be asked: Does the Winterbottom, Garth Tander and James driver income levels and consider them a Commodore in the World Touring Car period. The opposite reaction was from celebrate successes or drown sorrows of the The scenes power brokers, even though these time a totally different campaign of people are normally the architects of the Courtney maybe generating incomes between of the great enjoyments of a career in extreme at the top end, there are a lot of other recommendation for the directors around: same time Ryan Walkinshaw vows to those driving in the past 25 years. halt momentum was in November 1979, hence a horse and cart through that argument. Pictured: Lewis Hamilton – Mercedes-Benz driver One Championship. person first, then as a driver. Series need a wake-up call to realise the $700 and $900K. considerations that need to go into the mix, It didn’t take long for Holden to call and HRT loyalists who were angry that Holden lobbying and business planning had season that has just been. success. Rather they want to know all about the automotive industry has been to get to continue in V8s as a privateer team. the stars who execute the plan on the silver know all the varying types of characters in car least of all short career spans. would move the HRT factory team to their my headline reference to ‘John Rock’. Driver fees and whether or not they deserve 1. Should GMH continue to be in motor say they wanted to exercise their option to be conceived and, happily, on 14 drivers are the stars of this business? Drivers screen, the football arena or the race track. companies, dealerships, media, suppliers, fleets Whilst nothing came of GMH supporting every driver in this year’s field of 25 performance relied so much on technology big pay cheques is one thing – attitude and So regarding my earlier remarks, perhaps I arch rival. How this plays out in 2017 will Holden’s media release lists their ‘Star Drivers’, Motor Sport Manager Simon McNamara Whilst and motorsport. racing? and go motor racing in 1988. With all December Ross McKenzie visited The period following Tom’s death proved the evening, recognition medals will recently read an article in Forbes Magazine and equipment. how they work with the team and fans is am just jealous because I could not find an Walkinshaw’s pitch, which centred on During hold the key to the success or otherwise of I’ve I just don’t get (or like) this. depend upon who is the best marketer. my office to say Holden had changed noting every driver who has won at least one John Bagshaw was unquestionably the noting the world’s top 100 highest paid athletes another. During the coursesport, of my I experienced 30 year When it comes to racing car drivers, they take employer to pay me $31 million a year in my the work associated with establishing the very difficult for the team, with three has presided over Holden’s racing successes has a very special driving talent, the variation My rule of thumb in managing race teams was involvement with motor 30s? a ‘no- win no-pay, or win and pay $1m’ the entertainment package in this sport, but in 2013. The three highest paid racing car In a race team, I cannot reconcile how one my trophy for being mercurial and enigmatic. 2. If so, what was the most advantageous be handed out honouring 10 different areas to allocate no more than 12.5 per cent of the the personalities and characters of over 50 new SVO business, any attempt to ‘create’ their mind. Two months of battles different Team Principals all trying to father of Holden Motor Sport where, as a drivers were: person can receive such a massive amount However these ‘interesting’ and somewhat proposition for GMH, it was serendipitous Despite the legion of fans the Clayton- race for them in their 500 wins. The top 10 over the past 12 years and prior to that for between top and bottom tier is considerable, team’s budget to driver fees. However, I always drivers. I suspect racing car drivers are no Or perhaps even more, I can’t help but way of implementing programs? is the Series doing the planning, strategising more than other team members, when the ‘complex’ traits seem to always make for an all-racing team in four months was and tough meetings and we had of superior performance in categories such as Mercedes-Benz driver Lewis Hamilton felt the team had a responsibility to work hard different to film stars and all other outstanding cynically draw the comparison between Lewis timing for Tom. His meeting at Fishermen’s based HRT had attracted from the halcyon highly influential and charismatic Director 1. driver’s performance hinges so much on the relationships that are full of turbulence, but in terms of most wins (or 11, as two drivers many years as 2IC of that department. Simon particularly with race craft and avoidance of to maximise income opportunities for drivers, athletes who attract a lot of media attention. Hamilton’s substantial pay cheque and the impossible. So we turned to Larry Perkins and appropriately controlling the driver (#19) - US$31 million machinery they are provided from an array of also a lot of appeal. This was the start of a series of meetings Bend meant the TWR racing credentials years ‘96-’02, it has not been all ‘cakes and Most Popular Driver, Champion Team Award, with personal services contracts as a top-up combined annual budget of 12 cars in the V8 and sub-contracted the factory team effort finished equal-10th) were: deserves special recognition for Holden’s level of GMH, he built the motor sport asset self-harm over an entire race. For too long 2. Ferrari driver Fernando Alsono technical geniuses. In my experience, they tend to come in four Supercar Series. that led to a crucial ‘yes or no’ for Holden were sitting on the desks of those who ale’ since Tom acquired the rights in 1988 automotivedealer.com.au | OCTOBER 2016 | 27 income for the driver’s time outside of the Many drivers feel the pressure of job insecurity the Young Gun Rookie, best presented Team component as comprehensively as it should? (#21) - US$29 million team’s requirements. varieties; mattered most, because within 90 days of to him for the ‘88 and ‘89 seasons under foundation for Holden. From the mid-60s we have seen a situation in our sport where Thisrelationship is different to all other in this demanding and cut-throat sport. There continuing in motor sport. The Holden 80 of success over such a sustained period. In athletes listed in the Forbes Top 100, where is also an enormous amount of pressure on My fear is the Series is preoccupied with event 3. US Nascar driver Dale Earnhart Jr My target was to grow the team driver fee A) Role Models our meeting Peter Brock and Holden were the SV Racing brand. Come September and, of course, the Championship Winner. other than motor sport, the list included drivers in terms of their performance, which directors’ decision meeting was set down Mark Skaife until his assignment to a senior role in (#28) - US$18 million by an additional 25 per cent and in doing so, 78 particular, his brilliant move more than six money and marriages of convenience often football, soccer, boxing, basketball, baseball, relates directly to career longevity, particularly to have their tumultuous split. management as its priority. control the driver’s external activities and align B) High Maintenance Prima Donnas for Friday 5 December 1986. Attendees the case of Hamilton and Alonso, 90 per golf, tennis and track – just nine sports where as they approach their mid-30s. Craig Lowndes years ago to mastermind T8 converting from Detroit headquarters in August 1978, he put come before raw talent. Every other elite sport In them to the best interests of the team. .65 cent of their income was earned through their the big money was made. C) Easy Going Fun Loving Scallywags were Chuck Chapman, Managing Director; In the days following it is a tradition of teams, automotivedealer.com.au | SEPTEMBER/OCTOBER 2014 | 25 team/employers as a driving fee, while the Thiswas prior to the advent of managers Jamie Whincup . Ford to Holden when he sensed the wheels all the resources in place. John Bagshaw’s operates on talent as the sole determinant for Motor sport involves man and machine. Of D) Difficult Hot Head Sooks With one race to go, the Top 10 performing other 10 per cent came from endorsements. stepping in and promising drivers the world – crews, drivers and manufacturer mates to The ratio of fee-to-endorsements for Earnhart all the other superstars mentioned, nowhere Garth Tander falling off HRT, and their struggle to recover replacement was Bob Stelter, a GM Detroit team selection. could I find an example where the athlete’s 46 gather privately in a much more informal drivers look well set. Compare this year’s Top is 60-40. 26 | OCTOBER 2016 | automotivedealer.com.au Peter Brock from the collapse of Tom Walkinshaw’s racing former head of GMC Trucks. 28 ‘Mad Monday’-style chill-out, when the 10 with 2014 and there is only one change, Greg Murphy 21 empire in 2003. Triple 8 has since rewarded 24 | SEPTEMBER/OCTOBER 2014 | automotivedealer.com.au About three months into his new assignment, most colourful and imaginative awards get Russell Ingall 19 McNamara/Holden many times over, Bob instructed me to fire our long-time Motor Todd Kelly 14 becoming the Holden powerhouse following Jason Bright their signing. Sport Manager, Joe Felice, whom Bob felt was 12 34 | DECEMBER 2015 | automotivedealer.com.au Rick Kelly/Allan Grice

My involvement with nine of the drivers automotivedealer.com.au | MAY 2016 | 45

t is with regret and great sadness that we John took up the challenge to launch and “Lockdown creates different strokes for announce the cessation of the ‘Crenno’s successfully run Holden Special Vehicles different folks. One of my new ideas is to ICorner’ column, written by industry (HSV) and the Holden Racing Team (HRT) ‘empty out’ some of the stuff I have been doing veteran John Crennan. with UK entrepreneur and racing car driver and introduce some new and fresh projects Tom Walkinshaw. After achieving that into my life,” John said. John has been providing Automotive Dealer successfully, he retired, only to return as CEO Magazine with quality content for about five of Nissan Motorsport. “I have greatly enjoyed the ability to express years, informing and regaling us all with my ideas and opinions on various aspects of tales from his unmatched experience in the For the past five years, John has shared his the auto and motor sport Industries.” Australian motor vehicle industry. forthright views on the state of the Australian motor vehicle industry with our readers, in We have enjoyed it too, John. Immensely. John spent decades working in various roles particular his thoughts on motor sport, namely Good luck in your future endeavours and at General Motors Holden, following in the the V8 Supercars competition, as well as many thank you for your enormous contribution to footsteps of his father, who worked for the tales from his decades in the business that have not just this publication, but the Australian company for 43 years. On leaving Holden, entertained and enlightened our readers. motor vehicle industry in general.

42 | SEPTEMBER 2020 | automotivedealer.com.au Stop stalling.

MOTORSPORT FEATURE Australian Automotive Dealer Association

HOLDEN EXIT FEATURE Australian Automotive Dealer Association ONLY TONY COCHRANE CAN MAKE SUPERCARS GREAT AGAIN HOLDEN’S SHOCK ANNOUNCEMENT in tough times it’s sponsorships that always get treated the most harshly when the bean intellectual sports deftness is crucial for counters introduce heavy cutbacks. Contracts Supercars’ right now. due for renewal with existing sponsors will TO CLOSE DOWN be very hard going for both the Series and the The three different storm cells creating these Why do I go into raptures over the John Crennan cyclone conditions are: 1) those flowing from teams. Hard to quantify, but maybe for every commitment this Holden Dealer had made hundreds of thousands of Holden world class Motorsport Contributor Covid -19 being sponsorships, government dollar previously invested in good times, it to his local community? Well, when you have cars and engines to build locally and sell and funding and team sustainability; 2) those that may now be more in the area of 70 cents post- been trained to Holden’s commendable and beyond that time, we will be offering world are self-inflicted: television contracts, Supercars Covid. exacting standards on providing premium class cars sourced for Australia from GM’s For Sale sign and Team Sydney; 3) out of the John Crennan customer care, it was stimulating and satisfying Government global network. Together with our network blue events, being Holden Exit, Virgin Airlines Motorsport Contributor to see it in fulsome practice. However this buzz ustralia’s leading motorsport series Offer smarter, not just later. of 230 Dealers nationwide we will continue Receivership and Adderton Mk II. of seeing such a positive commitment to the has a lot to contend with as it prepares The various state and territory governments to provide our customers with exceptional Holden franchise quickly moved to a great to restart its racing season. With only are very generous financial contributors to products, service and support.” Big lesson here A The primary components of the Supercars Supercars. Given their tough road ahead with sense of ‘what the hell’ chagrin and dismay. two races conducted over seven months, economy are television rights, sponsorships for big corporations – don’t make promises serious budget deficits already coming into Knowing the lifeblood of a car franchise is the and the next not scheduled until June 27, and government funding. It’s not unreasonable you cannot keep. play, one could assume all governments will An Uplifting Dealership Experience Sparks flow of new cars from the car manufacturer the organisers face a considerable range of to assume each of these crucial revenue streams be taking a very hard look at ‘Essential’ versus Chagrin and Dismay Today’s current 190 Dealers, Holden owners and from which everything in the business challenges as the show gets restarted. are under pressure – both for teams and Series. flows: Used cars, Service, Parts, F & I, it ‘Nonessential’ expenditure contracts. It’s not rom a strict business analysis and customers (myself included with a new suddenly hit me that the heart and soul of this Covid-19 has thrown up many serious issues Here is some commentary and opinion on each hard to forecast government money going into standpoint, Holden’s announcement on Equinox) now find themselves evaluating GM/ business (and all Holden Dealers) was soon to for all sports, however Supercars have also been of these disturbances to the momentum of the the sport in a manner, to which Supercars have 17 February that they were withdrawing Holden’s commitment for the next 10 years on F be ripped out with no further supply of new hit with a number of other heavy predicaments Supercars business. previously been accustomed, could be seriously their service and parts obligations, particularly from Australia and NZ was a logical and to wrestle with. This is not a perfect storm, it’s scrutinised and squeezed. after reading recent reports on contentious Holdens. understandable determination. From a more like a cyclone they are facing. Sponsorships sentimental standpoint however, it was a issues between GM and Dealers on post close- As unbelievable as it sounds Supercars are massive disappointment and shock for a down Service and Parts Agreements. So significant is the combination of both This is a double-edged sword. Firstly, if for currently pushing to move the calendar to a Covid-19 issues and other untimely dramas, I example, a sponsor at the start of the season summer season. This could also create some large proportion of Australia’s 26 million Three weeks after the total Holden Closure would suggest Supercars need to immediately had signed on for $500,000pa, what would disquiet with governments, particularly in population for whom Holden had, in some announcement, some electrical issues with establish a specialist ‘Crisis Cabinet’ (this their expectation be for a reduced figure given northern regions which hopefully does not put special way, touched their life at some point. my Holden I was driving required I make an term maybe overdramatic but not when you the revised calendar, fewer races, experimental at risk contracts currently on foot. appointment with Stephen Howlett, the owner Holden’s 2013 decision to announce the end hear feedback from stakeholders in the Series unproven new racing formats, loss of customer and Dealer Principal of Tweed Holden/Sharp of local car production from 2017 was again a who feel many major issues require urgent coach’s box experiences and limited media Holden Motor Group. As I had an hour to kill and tough but inevitable call. Any well-considered action) This Crisis Cabinet would address both attending the races until we come out of with Stephen involved in an offsite meeting, I The news that broke on February 17th this year, evaluation of all the facts including the transformational change and problem solving. current Covid restrictions? A sponsor may feel treated myself to a tour of his dealership. My a week prior to the first race in Adelaide, that well-established formula for car production it’s reasonable to renegotiate a 25% reduction 50-year-plus association with Holden afforded Holden would exit Australia, stunned the entire economies of scale, declining sales volumes, loss Is it unreasonable to suggest that the current now and a further 15% if certain KPIs were not me the chance to inspect around 250 different nation. The flow-on effect of Holden’s exit from of brand equity, huge shifts away from passenger This dealership walk-around, which I did of structure and leadership of Supercars does not achieved by year end. cars, and unfavourable currency exchanges, all dealerships throughout every part of Australia have the capacity or capability to handle all the Supercars is profound. The impact of 16 of the and NZ so my vibe meter on reading a my own accord, triggered the stark reality of 24 cars on the grid carrying a defunct brand meant Holden faced a perfect storm around a Holden’s closure announcement and in turn urgent concerns? They will be fully stretched Teams will be trying extremely hard to sell the non-viable local production model. dealership’s retail heartbeat or otherwise comes just managing business operations thrown benefits of the E Series, however that program, and logo for the next two years is a marketing from a reasonably solid base. I had the joy of how this superb dealership/business and nightmare. others like it, will soon be gone along with all up from the pandemic. The added brain as well promoted and televised as it has been What happened after the 2013 decision to ‘tyre kicking’ over 30 new or demo Holdens power and specialist expertise and experience with enthusiastic social media driver posts, those staff trained to Holden’s high standards It was concerning to read a report of a team cease production however is where serious on display on the superb 12 car showroom, necessary to implement robust solutions to did not register on my passion meter. Not and values which I too had been the grateful owner suggesting car brands are now irrelevant questions can be asked of Holden for failing as well as the equally impressive lineup on the navigate the business threats noted below will sure Sponsors would be prepared to accept E beneficiary of from the day I started at GMH as the sport is only about providing great to implement a sustainable revitalisation/ forecourt. I cannot before recall seeing this have to come from either new ownership/ Series represented any sponsorship value as its as a 17-year-old. With entertainment.Openpay This is bollocks and is treating offer your customers a smarter way to pay with flexible payment recovery given the abundantly obvious many new cars so immaculately presented and management and or a highly skilled team of appeal was artificially inflated by one-off sports polished to the point of perfection. Likewise Holden loyalists with contempt given the challenges the plant closure would present. My father worked all his life for GMH, from external specialist advisers. starved audiences during lockdown. my identical reaction to the total dealership, significant investments in the sport over the its beginnings in 1926 through until 1968. His Despite commitments at the time of including its commanding location, its layout, past 50 years by the massive Holden fan base. service to Holden coupled with my association Regardless of whether it’s new ownership and/ Secondly, if recessionary conditions and a announcing the closure, Holden did not the clinical cleanliness of every conceivable of 52 years in various forms, meant my or a’ Crisis Cabinet’ model that is urgently much tougher economy plays out over the deliver on their promises made six years department, the striking professional family had some connectivity over a 90 year needed, the person central to any recovery and coming years, corporate and retail marketing earlier. Holden’s then Director of Sales corporate dress code and grooming of all span. Perhaps that’s why my REAL WORLD reset of Supercars must be former supremo, budgets will be hammered. Unfortunately and Marketing announced one week after the staff, the beautifully furnished Service experience at the dealership of the impact of Tony Cochrane. His proven leadership and the plant closure on 20 December 2013 an Customer lounge and large viewing window the sudden closure, created such a sense of advertising campaign: ‘HOLDEN BRAND into the 16-bay service department, and disillusionment and hit me like a ton of bricks. HERE TO STAY’. He stated the campaign then to cap it all off a bustling five star fully 28 | JUNE 2020 | automotivedealer.com.au was to ensure customers understood the equipped showroom café/coffee shop. Holden brand would remain in Australia. He also said, “Over the next four years we have plans from 2 - 12 months*. No interest. No hassle. Just smart.

22 | MARCH 2020 | automotivedealer.com.au

MOTORSPORT Australian Automotive Dealer Association

WHEN CAR-MAKERS SNEEZED,

RACING CAUGHT PNEUMONIA The more compelling issue Mark Fogarty’s article raises is why have the big names I don’t think it’s over, but I do think most ‘walked’? There is no doubt in my mind as teams have been far too slow to adjust and to why…it’s the knock-on effect of the car reset sponsorship mining techniques. The companies’ dramatic pullback from the sport commercial operations are most often the John Crennan in both dollar terms and key car company orphans in the team’s structure. Motorsport Contributor executives’ motorsport passion factor. In the It’s worth diving deeper into fearless Fogarty’s 20-25 years period Foges touched on, I would article, as seldom does anyone in the motor estimate the Holden and Ford investment sport media room have either the courage levels in the teams and the sport generally eading motor sport journalist, Mark or capability to venture into the commercial would have gone from $15-$20m a year to (‘Foges’) Fogarty, in early August wrote aspects of this sport/series. around $3m annually today. (Originally, their a most insightful article in Auto Action commitments included cash sponsorship, L Let’s first look at the teams’ combined results bodyshells, parts, Dealer activations, magazine about sponsorship in motor racing. this year and test Mark’s theory that unless you hospitality, displays and advertising.) The premise of his critique was summed up in are a top team you won’t be in the big money. the introduction as “AA’s pernicious pundit Or put another way, unless you bring in the When Holden and Ford (and Nissan) were remembers a time when big brand names big sponsors there is no way you will be a top fully immersed in the sport and contributing were all over the leading cars”. team. these big dollars, you could be sure the same amount again (taking it to $30-$40m) Foges has always been one for thought- The Teams Combined Performance results to would come into the teams/sport with the provoking commentaries but this one was date in 2019 are listed below. The number on high-powered contacts and influence the key particularly pertinent and resonated with me, the right-hand side indicates my assessment of executives of the car companies had in the as from my perspective, the highest priority, by the sponsorship dollar rankings of these teams corridors of power in corporate Australia. a mile, is the need for major improvements in in the top eight (or 16 cars): The persuasiveness of the CEO or Marketing the commercialisation and attraction of more 4,383pts. No. 2 Director of Holden, Ford or Nissan going money to the sport and teams. “There was a 1 DJRTP Shell V-Power No. 1 to speak on behalf of or with teams to their time when motor racing was awash with the 3,576pts. Triple Eight Red Bull HRT equivalents at the likes of a CUB or Dulux was biggest commercial brands in the world in 2 3,231pts. No. 3 Tickford Supercheap Auto palpable. the ’70s and motor racing was neck and neck 3 3,085pts. No. 7 with the VFL (now AFL) in terms of big-name Erebus Penrite 4 3,043pts. No. 4 Although sponsorship procurement was not sponsorships,” he wrote. Tickford Monster part of my role at HSV/HRT, it somehow 5 2,698pts. No. 8 kept landing on my desk. My analysis of He went on to classify today’s team sponsors 6 BJR Freightliner No. 5 2,279pts. the sponsorships I was involved in over by various investment levels, saying that Shell Mobil 7 2,256pts. No. 6 this 25-year period validated my belief that and Red Bull are clearly the largest investors 8 Kelly Racing Castrol when Ford and Holden sales commenced and big names in Supercars, with a fair way to sneeze the sport caught pneumonia, and back to the likes of Supercheap, Monster, My guess is Red Bull Racing would have the all the associated excitement and enthusiasm Castrol and Mobil (noting that they only largest external sponsorship and have an of all those connected quickly declined. This commit to a pittance of their glory days in the enormous advantage over every other team in was most evident with the respective Dealer ’80s, ’90s and early 2000s). He then outlines the competition, with my estimate of around organisations when Dealer Principals and the bottom level contributors, who tend a $2.5m top-up per year from Holden. No their Sales teams were in attendance at races, By this point, they have usually passed their to be motor sport enthusiast/related party other team in the series receives any cash sport, both here competitive peak and come to the realisation and on the Monday after a race the showroom In any elite level of motor companies. that they know little, other than racing, and sponsorship from Holden, Ford or Nissan. But and overseas, I would guess that in the top 12 and service department would be abuzz with with most of them delivering little more than therefore need to go as long as they can in the drivers in each category you would generally certainly, the Shell and Red Bull deals make an atlas. main game to maintain historic income levels. the staff excitingly analysing the results, not find an even spread of all four varieties. In Foges makes the point that unless you are a Mark’s assessment spot-on that the serious to mention these same areas in the dealership My tolerance levels of driver managers were each case, your dealings with them need to be Of the 30 main-game V8 drivers from season very top team you don’t get the big money very low, as I often found their financial diplomatically adjusted. 2004, there are only seven still racing at top money sponsorships sit with these two teams, full of race posters and driver point-of-sale objectives (including their 20-25 per cent level. During the same period, there have any more, and that Supercars bosses need Whilst we can see a wide variation in the and the results clearly reflect that. Then so on commission) at odds with the objectives of been 50 drivers come and go as V8 Supercars material. personalities of top drivers, with the fans being to go back 20 years plus another decade to the team. I still hold that view, with a few mainstream drivers. down the ladder, where performances would able to choose for themselves whether they like exceptions of driver managers who finally ‘got realise how big the sport used to be. His final or loathe their perceived personality, there are seem reasonably commensurate with the My review highlighted, however, that if you it’ and recognised the number one priority for Some lasted just one season, as this tough three common traits in all racing car drivers observation: “There was a time when big the driver is their responsibility to the team sport can kill so many aspiring careers. Drivers guesstimated sponsor income rankings. are well-connected and genuinely understand that I respect and admire greatly. and their boss, not manager. over 35 are now finding more pressure from a name brands would fall over racing. Now, younger generation of drivers. Ten years ago Thefirst and most obvious is their skill unfortunately, they’re just over it.” In 1998, 1999 and 2000, when the HRT team 30 per cent of drivers were under the age of 30 in driving and controlling a race car – it was running at peak performance, we had – this year it’s 36 per cent, and the figure seems never fails to amaze me. No one can truly the two premium drivers in Craig Lowndes set to climb. appreciate their capabilities unless they could and Mark Skaife. Our payments never went sit alongside a driver as they perform their factor possibly making drivers edgy beyond my 12.5 per cent formula for our Another magic for 100 laps flat out, where performance driver’s fee, regardless of their superstar status. is dealing with the uncertainty surrounding is measured for everyone to see in tenths of a career opportunities after racing, be that 45 | SEPTEMBER 2019 | automotivedealer.com.au Then,and still now, the containment of driver second. at age 25, 30, 35 or 40. Most drivers have fees is crucial to the survival of teams in devoted their lives to racing from their early Thesecond is their level of competitiveness Australian motor sport. I keep scratching my teens, putting Go-Karting well above a formal which surely measures amongst the highest in head, asking myself the question, in the case of education. Many V8 Supercar drivers have all sports, or any occupation for that matter. a few teams, how they appear to pay so much felt their natural extension, after or during outside of the guidelines I used. I think maybe Thirdis their courage. We tend to forget how driving, was to invest in owning rare and their casualties own it’s a case of the tail wagging the dog in some dangerous motor sport is and how when a team, however success is team and driver manager relationships. racing car driver straps themselves in, they are high, due to lack of business training and risking their life like no other athlete in any understanding. Let’s compare the overseas drivers in the top other sport. If the organisers of motor sport go income bracket with those in Australia. In V8 Todd and Rick Kelly are an exception to to great lengths of warning on entry about how Supercars, my guesstimates of the three highest the rule and are very fortunate to have dangerous motor sport is for a spectator, you paid drivers (with fees and endorsements gifted business brains, quickly picking up can probably multiply that danger 50 times for combined) would be Craig Lowndes in the the fundamentals of people and financial the driver. region of AUD$1.6 million per annum, Jamie management. One mistake they did not Whincup and Will Davison in the $1 million Drivers’ courage fascinates me as never have make was to pay themselves or any of their to $1.2 million range. I heard a driver reference the danger factor or contracted driver’s unsustainable fees. display an ounce of hesitation in the quest for In the next tier, my guess is Mark So whilst we may raise our eyebrows at victory or a great race result. Winterbottom, Garth Tander and James driver income levels and consider them Courtney maybe generating incomes between One of the great enjoyments of a career in extreme at the top end, there are a lot of other $700 and $900K. the automotive industry has been to get to considerations that need to go into the mix, know all the varying types of characters in car least of all short career spans. Driver fees and whether or not they deserve companies, dealerships, media, suppliers, fleets big pay cheques is one thing – attitude and So regarding my earlier remarks, perhaps I and motorsport. how they work with the team and fans is am just jealous because I could not find an another. During the coursesport, of my I experienced 30 year When it comes to racing car drivers, they take employer to pay me $31 million a year in my involvement with motor my trophy for being mercurial and enigmatic. 30s? the personalities and characters of over 50 However these ‘interesting’ and somewhat Or perhaps even more, I can’t help but drivers. I suspect racing car drivers are no ‘complex’ traits seem to always make for cynically draw the comparison between Lewis different to film stars and all other outstanding relationships that are full of turbulence, but Hamilton’s substantial pay cheque and the athletes who attract a lot of media attention. also a lot of appeal. combined annual budget of 12 cars in the V8 In my experience, they tend to come in four Many drivers feel the pressure of job insecurity Supercar Series. varieties; in this demanding and cut-throat sport. There is also an enormous amount of pressure on A) Role Models drivers in terms of their performance, which B) High Maintenance Prima Donnas relates directly to career longevity, particularly as they approach their mid-30s. C) Easy Going Fun Loving Scallywags automotivedealer.com.au | SEPTEMBER/OCTOBER 2014 | 25 D) Difficult Hot Head Sooks

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CONCERN OVER ELECTRIC GREY IMPORTS

onsumers should feel comfortable periods which usually run longer than the rest Marks Act 1995, should be reviewed by an about buying a used electric car, but of the car—generally they run for eight years independent body, such as the Productivity CAADA has serious concerns around or 160,000km. Commission. the importation of used electric cars, as the provenance of these cars is unknown. “Governments have a number of other policy The Government supports in part this levers which they can pull to incentivise the recommendation. The Government supports AADA CEO, James Voortman, said the uptake of EVs. Allowing for the import of the removal of parallel import restrictions on specialist and enthusiast scheme should not used cars will only risk consumer welfare and books. The Government will progress this be used to bring in mainstream cars and he increase the age of our fleet which is already recommendation following the Productivity hoped the Government would rule this out behind the likes of Europe,” Mr Voortman Commission’s inquiry into Australia’s just as they had officially done on countless said. intellectual property arrangements and occasions. consultations with the sector on transitional Harper Review recommendation 13: Parallel arrangements. “If these cars are not good enough for imports consumers in their source countries, they The terms of reference for the inquiry provide shouldn’t be allowed to be dumped in Restrictions on parallel imports should be that the Productivity Commission is to have Australia,” he said. removed unless it can be shown that: regard to the findings and recommendations of the Harper Review in the context of • the benefits of the restrictions to the “Consumers face major risks as these vehicles the Government’s response, including community as a whole outweigh the will not be covered by the Manufacturer recommendations related to parallel import costs; and warranty and it will be near impossible for restrictions in the Copyright Act 1968 and the those buyers to enforce their Australian • the objectives of the restrictions can only parallel importation defence under the Trade Consumer rights.” be achieved by restricting competition. Marks Act 1995. Recalls is another major concern – we have Consistent with the recommendations of Following consultation as part of the review seen with the Takata recall in New Zealand recent Productivity Commission reviews, of the Motor Vehicles Standards Act 1989 and how much more difficult it is to rectify grey parallel import restrictions on books and having regard to consumer protection and imports compared to standard imports. second‐hand cars should be removed, subject community safety concerns, the Government has decided not to proceed with reducing In relation to electric vehicles, consumers can to transitional arrangements as recommended parallel import restrictions on second‐hand in no way be confident about the health of the by the Productivity Commission. cars at this time. They also rejected used battery in a used imported EV. EV batteries Remaining provisions of the Copyright Act car imports in response to a productivity are the most expensive component of the car 1968 that restrict parallel imports, and the commission report. and have their own Manufacturer warranty parallel importation defence under the Trade

44 | SEPTEMBER 2020 | automotivedealer.com.au FEATURES Australian Automotive Dealer Association

GOVERNMENTS FAILING ON EVS: REPORT

he Electric Vehicle Council (EVC) has “However, Australia continues to lag common reasons to encourage an electric given Australian governments a failing comparable countries when it comes to electric vehicle purchase. The price of electric vehicles Tgrade and called for more incentives vehicle market share, model availability, continued to be a discouraging factor. to encourage the uptake of electric vehicles consumer awareness, industry development, (EVs) in its 2020 State of Electric Vehicles and – critically – government support. “This concern should dissipate as the price of report, released in August. electric vehicles reaches parity with petrol and “It remains clear that if the Australian electric diesel equivalents. This point of parity could be A survey conducted by the EVC found that vehicle industry had comparable policy reached much sooner with the introduction of 56% of consumers would consider purchasing support to other countries, we would enjoy national fuel efficiency standards, comparable an electric vehicle as their next car. More access to more low-cost electric vehicle models to other countries like the UK and the US,” the than two-thirds (68%) want governments to and greater consumer confidence in electric report noted. provide more public charging infrastructure, vehicles. Australia would also be capitalising 68% want government subsidies to reduce on more opportunities to create jobs in the Many consumers said they were discouraged the cost of buying an EV, and 66% want s e c t or.” by the driving range of electric vehicles but, government subsidies to reduce the cost when asked how far they expected fully of installing home charging equipment. A In 2019, EV sales increased by 200% with electric vehicles to drive per charge, almost massive 82% of consumers identify public fast 6,718 EVs sold, while petrol/diesel vehicle sales 80% of respondents underestimated the charging as “important”. fell by 7.8%. EV sales accounted for 0.6% of range of electric vehicles currently available in new sales in Australia in 2019. There are 28 EV Australia. Rating the various state, territory and Federal models for sale in Australia. Governments on their support for the EV “The rollout of public charging infrastructure industry, the ACT was the only government Australia has 2,307 public charging stations; has continued apace over the past year on the to earn a ‘B’ grade from the report’s authors. 357 of these are fast public charging stations back of significant investment from the private The NSW and Queensland governments each (an increase of more than 40% in the last 12 sector, some state governments, and the received ‘C’ grades, Victoria, Tasmania and months). Federal Government through the Australian South Australia ‘Ds’, while Western Australia, Renewable Energy Agency,” the report states. A survey of 2,902 Australians carried out for the Northern Territory and the Federal the report showed consumers continuing to “There are now 1,950 standard charging Government were all given ‘Fs’. warm to EVs. Of those surveyed, 56% would stations (less than 50kW) at over 1,200 “The last year has seen an increase in electric now consider purchasing an electric vehicle locations, a 16% increase since July 2019; vehicle sales, improvements in consumer as their next vehicle, representing a steady and 350 fast and ultra-fast charging stations sentiment, and the rollout of public charging increase from 48% in 2018 and 53% in 2019. (50kW and over) at over 150 locations across infrastructure. A number of states and Australia, representing a 42% increase since Consumers cited reduced environmental territories have announced new policies to July 2019. footprints, lower running and maintenance support electric vehicles,” the report said. costs, and relative performance as the most “Given the importance that consumers place on charging infrastructure availability, it is

automotivedealer.com.au | SEPTEMBER 2020 | 45 FEATURES Australian Automotive Dealer Association

imperative that private and public investment • Convenience of recharging over to preclude a road user charge on EVs to in infrastructure continues. Testament to refuelling encourage purchases. this, Infrastructure Australia has included the rollout of a national electric vehicle fast- “Respondents overwhelming support The Federal Chamber of Automotive charging network as a High Priority Initiative government policies to provide public Industries (FCAI) has announced a voluntary in its 2020 Infrastructure Priority List.” charging infrastructure, reduce the cost emissions target scheme for new cars sold of electric vehicles, and reduce the cost locally from 2021 to 2030, a move welcomed Of the 28 EV models available in Australia, of installing home charging. These three by the Government. eight are priced under $65,000. The report said policies have been consistently identified by six more models are expected to arrive on our respondents as the top three priorities since The FCAI welcomed the Australian Renewable shores before the end of next year, including 2018,” the report states. Energy Agency (ARENA) announcement of two priced below $50,000. funding for an EV smart charging trial. The When asked if the COVID-19 pandemic $2.9 million trial will measure the benefits and “When surveyed about the requirements should impact government policy supporting impediments to controlled smart charging, for bringing electric vehicles to a market, electric vehicles, 38% of respondents said including improving understanding of EV carmakers told the Electric Vehicle Council the government prioritisation of electric vehicles driver behaviour. absence of a national electric vehicle policy is should remain the same, but almost a quarter restricting the supply of more electric vehicles (23%) thought electric vehicle policies As part of the trial, Origin Energy Ltd has been to Australia, especially when such policies exist should become a higher priority because of allocated $838,000 in funding to provide and in comparable markets,” the report said. COVID-19. Only 11% thought they should be install 150 smart chargers across residential, a lower priority while 28% were not sure. commercial, and industrial premises. The trial “Globally, carmakers are rolling out more covers the national electricity market, namely electric vehicle models, but so far production The reasons cited behind the need for electric Queensland, New South Wales and the ACT, cannot keep up with demand. This means vehicles to become a higher policy priority Victoria, South Australia and Tasmania. that without policy signals, Australians will included: FCAI chief executive Tony Weber said the trial continue to be denied access to the full global • Accelerating emissions and pollution initiative was welcomed by industry. range of electric vehicles. reduction – many respondents noted the air quality and noise benefits from “Most apparent at the federal level, but also “Low emission vehicles, including plug in reduced vehicle use during lockdown present at the state level, is the continued hybrid (PHEV) and battery electric vehicles periods and want governments to reluctance by governments to proactively (BEV), are the way of the future and there is replicate those benefits by prioritising position Australia’s transport sector to benefit barely an automotive manufacturer today who electric vehicle policies. from electrification. If governments wish does not have one of these vehicles either in to reduce transport emissions, improve air • Increasing fuel security – respondents production or in development,” Mr Weber quality, remove fuel insecurity, and grow local noted the increased potential for said. jobs then policy support for electric vehicles disruption to global oil supply chain “However, the uptake of EVs in Australia has must be part of the equation.” impacts from the COVID-19 pandemic, noting Australia’s heavy reliance on been slow for many reasons, including lack of Electric vehicle market penetration differs imported fuels. Electric vehicles would policy, lack of both financial and non-financial across Australian states and territories. help reduce this reliance and protect incentivisation, and a lack of infrastructure Victoria and NSW continue to have the Australia from such disruption. development to support it. highest total number of electric vehicles with • Stimulating economic activity – many “The announcement of an EV smart charging 2,540 and 2,532 respective sales between 2011 respondents identified that current trial by ARENA will provide significant and 2019 (Tesla is excluded from this count). economic conditions provide an support to the growth of EV take-up in The two most populous states were also level opportunity for Australia to use its Australia and address some of the barriers to in 2019 with 832 sales in NSW and 815 in mineral endowment and skillsets to grow entry of this technology.” Victoria. jobs in the electric vehicle sector. The Federal Shadow Minister for Climate However, as a percentage of new car sales, Although EV sales are still proportionately Change and Energy, Mark Butler, said the the ACT strongly outperforms others with 83 low, Toyota has revealed that 20% of its new Government had been "asleep at the wheel" electric vehicles purchased for every 10,000 vehicle sales in Australia are hybrids. Toyota’s for failing to implement emissions targets. vehicles sold. hybrid sales grew by 97% in the first half of Australians pay considerably more for EVs 2020 compared to 2019. In July, hybrids made The most common factors to discourage the than their counterparts in Europe and the US, up 40.7% of Toyota's sales. More than 87% of purchase of an electric vehicle are: who enjoy government subsidies and strict Toyota RAV4s sold in July were hybrids, with a emissions targets that force prices down. • Accessibility to charging equipment waiting list of up to 10 months. • Purchase cost of an electric vehicle Hyundai will launch three new Hyundai Ioniq compared to a petrol or diesel vehicle EVC CEO Behyad Jafari identified a lack of electric cars from 2021, with an Australian Government incentives and higher prices • Driving range per charge compared to launch to follow. as the major obstacles to greater take-up of fuel tank EVs. He called for the Federal Government

46 | SEPTEMBER 2020 | automotivedealer.com.au Royal Australian Navy commissions Protection Brands, Australia’s major surface ship fleet treated with Antimicrobial Shield.

Australian anti-microbial treatment specialist “Airlines and transport companies are acutely aware Protection Brands Pty Ltd has been engaged by of the risks associated with SARS, Bird Flu, Swine the Royal Australian Navy to treat Australia’s major Flu and Ebola virus and the continuing prevalence of surface ship fleet with an anti-microbial shield other serious diseases such as Norovirus and now coating, applied to surfaces on RAN vessels. Coronavirus,” he said.

“With most airlines suspending operations, we have seized the opportunity to pivot and expand our specialist services into new channels in an effort to assist in containing the pandemic both here in Australia and overseas. We are tremendously proud to have been selected to work with the Royal Australian Navy in helping protect their personnel during the COVID-19 pandemic.” - Andrew Forster, General Manager, Protection Brands and RAN Project Lead said the initial treatment had been successfully implemented in record The non-toxic, long lasting, hypoallergenic process time. is capable of eradicating close to 100% of all known “Within a four-week period, we have completed pathogens and viruses. treatments of more than 30 Royal Australian Navy Protection Brands and subsidiary company Permagard vessels located in all major Australian ports,” he said. Australia are leading suppliers of asset protection “The vessels have included Amphibious Assault Ships services and bio-hazard protective coatings. HMAS Adelaide and HMAS Canberra and Guided The company is an established service provider to the Missile Destroyers HMAS Brisbane, HMAS Hobart and commercial aviation and automotive sectors in Australia HMAS Sydney,” he said. and to companies including Qantas, Virgin Australia, Protection Brands has a standing offer to continue Honda Australia and Mercedes Benz Australia Pacific. treating the Royal Australian Navy vessels. “Whilst we offer a range of asset protection services, interest in our anti-microbial shield treatment has escalated dramatically during the COVID-19 pandemic,” To find out more about how the said Protection Brands Group Managing Director Mark Permagard Automotive team can help Pettitt. your dealership offer genuine, tested and long acting sanisatation products and Protection Brand’s ‘Persistent Antimicrobial Shield services get in touch with your account Technology’ is a well established and proven manager or email us at: technology. It has been successfully tested against [email protected] pathogens and viruses capable of creating the rapid spread of person to person infections in confined Alternatively, make an an inquiry through spaces, such as within aircraft, ships and motor our website: permagardautomotive.com.au vehicles,” he said.

“Prior to the outbreak of the COVID-19 pandemic we were primarily liaising with operators in the commercial aviation and motor vehicle sector.” FEATURES Australian Automotive Dealer Association OVER 150,000 FAULTY TAKATA AIRBAGS STILL ON ROADS

t least 155,000 vehicles containing de-registering them to take them off the road. Takata fast facts: potentially deadly Takata airbags are Some states and territories are also preventing As at 30 June 2020: still on our roads and with less than six re-registration of unregistered vehicles unless A • In total about 3.66 million airbag inflators months before Manufacturers are expected there is evidence that the affected airbag has (89.2%) have now been rectified in about to complete their recall of these vehicles, the been replaced. 2.68 million vehicles (87.8%). ACCC has urged consumers to check if their vehicles are affected and if so book them in In the three months to the end of July, • This leaves 180,869 airbag inflators (4.4%) for replacement. more than 40,000 vehicles had their airbags in 155,351 vehicles (5.1%) remaining for replaced despite the pandemic, and a further replacement. According to the latest ACCC figures on the 2,250 vehicles were identified as no longer • An additional 262,725 airbags (6.4%) in compulsory recall, about 180,000 airbags (4.4 on the road. On average, more than 3,100 218,393 vehicles (7.1%) were reported by per cent of all airbags subject to this recall) in airbags have been replaced each day since the suppliers as unrepairable (written off, more than 155,000 vehicles (5.1 per cent of compulsory recall began in March 2018. unregistered for more than two years, affected vehicles) are yet to be replaced. exported, scrapped, stolen, or modified “There are only six months left for and unable to have the airbag replaced). ACCC Deputy Chair Delia Rickard said that Manufacturers to meet their replacement more than 6,000 of those vehicles were so obligations, and while the compulsory recall • There are 1,334 vehicles with critical- dangerous that they should not be driven at all. is progressing well, it is important to get these alpha airbags and 4,718 vehicles with These vehicles contain the highest risk ‘critical’ remaining deadly airbags off our roads,” Ms critical non-alpha airbags outstanding for airbags, and states and territories will be Rickard said. replacement. • Vehicles with critical airbags should not be driven, and drivers are entitled to have their vehicles towed to the dealership to have the airbag replaced for free.

48 | SEPTEMBER 2020 | automotivedealer.com.au FEATURES Australian Automotive Dealer Association

RECYCLING/END OF LIFE STEWARDSHIP

he Federal Government has committed The RMF will support innovative investment Minister for the Environment, Sussan Ley, said to a $1 billion waste and recycling plan. in new infrastructure to sort, process and re- the moves were part of a national strategy to TAmong its goals is encouragement for manufacture materials such as mixed plastic, change the way Australia looks at waste, grow industry to take responsibility for control of paper, tyres and glass, with Commonwealth the economy, protect the environment and waste streams which potentially includes the funding contingent on co-funding from reach a national resource recovery target of implementation of stewardship schemes. industry, states and territories. It includes: 80% by 2030. • $35 million to implement The AADA fully supports the move to ban “As we cease shipping our waste overseas, Commonwealth commitments under waste exporting and agrees that there are many the waste and recycling transformation will Australia’s National Waste Policy Action opportunities for recycling and responsible reshape our domestic waste industry, driving Plan, which sets the direction for waste disposal of end of life vehicles. Development job creation and putting valuable materials management and recycling in Australia of these processes however will require back into the economy,” she said. until 2030. extensive consultation with industry to ensure that any End-of-Life Vehicles (ELV) scheme • $24.6 million on Commonwealth “We need to stop throwing away tonnes does not pass on excessive additional costs to commitments to improve our national of electronic waste and batteries each year consumers and industry. waste data so it can measure recycling and develop new ways to recycle valuable outcomes and track progress against our resources. As we pursue National Waste Policy The Federal Government will commit $190 national waste targets. Action Plan targets, we need Manufacturers million to a new Recycling Modernisation • The introduction of new Commonwealth and industry to take a genuine stewardship Fund (RMF) that it says will generate $600 waste legislation to formally enact the role that helps create a sustainable circular million of recycling investment and drive a Government’s waste export ban and economy.” billion-dollar transformation of Australia’s encourage companies to take greater The unparalleled expansion of Australia’s waste and recycling capacity. responsibility for the waste they recycling capacity follows the 2019 National generate, from product design through The Government claims the scheme will Waste Policy Action Plan, Australia’s to recycling, re-manufacture or disposal create more than 10,000 jobs and divert over government ban on exports of waste plastic, (Product Stewardship). 10 million tonnes of waste from landfill to paper, glass and tyres, and this year’s first ever the making of useful products as Australia National Plastics Summit. turbocharges its recycling capacity. automotivedealer.com.au | SEPTEMBER 2020 | 49 FEATURES Australian Automotive Dealer Association COMBINE POWERFUL FREE & PAID TOOLS ON FACEBOOK FOR YOUR COVID-19 DEALERSHIP STRATEGY

Paul Balbo Pinned Post Since the 2016 Facebook Marketplace Free launch in Australia, vehicles have organically Client Partner, become a top category for Aussies to buy Automotive, It is important for customers to have access to and sell. We’ve also opened up the ability Facebook Australia relevant and timely communications regarding & New Zealand crucial information on your business for dealerships to pipe their used and demo operations. inventory directly into Marketplace via inventory partners - CarSales, Drive Network, Use your Facebook Business Page to provide AdTorque Edge, iMotor, AutoTrader, Dealer ore than ever, people are coming real time information and update it with ease. Solutions and EasyCars. to Facebook to connect with Unlike website updates which might need Mthe people and communities to be outsourced or can take time to get live, These partnerships improve the user they care about. Both your current Facebook posts can go live immediately. experience with more volume and higher and potential customers are spending quality inventory available across Facebook significant time everyday on the platform You can then select the post to be pinned Marketplace. - making Facebook a crucial place to create a Pinned Post. It sits on the top of to efficiently reach and connect with your Facebook Business Page and is easily Interested Dealers should get in touch directly them. By providing first-class service discoverable by anyone who visits your Page. with any of the above partners to understand and value now, you can build the long- the specifics around how to get inventory listed term relationships needed to cultivate onto Facebook Marketplace. customers for life. Click here to learn more. With COVID-19, there is no doubt that Automotive Inventory Ads (AIA) consumer behaviour has shifted, and Paid for marketers, having a digital presence becomes a ‘need-to-have’ rather than a Facebook Inventory Ads provide easy ‘good-to-have’. Digital retailing becomes a templated solutions to advertise Dealer way to showcase dealership inventory and inventory in real time at scale and to display catalogs online. With pent up demand for relevant inventory based on user behavior. used cars and limited supply in the market, Facebook signals and machine learning your dealership’s customer service has to technologies display relevant inventory based be in-tune with customer needs and wants. on user behavior who are in-market, without Removing friction for customers should be that user having to actively search for stock top of mind; especially during uncertain and regardless of whether they are already or times. not yet considering your dealership. To address this shift, think about how you Ads can click through to your Dealer sites, can leverage the immense opportunity on Messenger or Facebook lead forms. Facebook’s family of apps. In Australia, 17M people access Facebook every month Convert online leads to inbound phone leads and 14M people access Facebook every on your site. AIA appears on the newsfeed and 1 day . Think about how to use a mix of drives traffic to the exact vehicle detail page of organic and paid tools to improve your Facebook Marketplace that car. customer service and to market to your Free audience. Dealers need to find new ways to reach When you direct AIA to Messenger, ask in-market audiences who are browsing your customers to book a test drive and or searching for cars and move to more appointments. prospecting strategies.

50 | SEPTEMBER 2020 | automotivedealer.com.au FEATURES Australian Automotive Dealer Association

voice and video calling have more than tips that resonate among consumers such doubled across Messenger and WhatsApp3. as: staying optimistic, caring for the local community and staying healthy. Use Messenger as a core customer service channel to reimagine how you solve both Facebook and Instagram Live and Stories reactive and proactive communication about activations bring you closer to your customers. your product, services and offers, and to merge This provides a fresh, cost-effective way to the gap between online and offline. This can be meet consumers where they are and provide done across both free and paid tools. valuable information to aid their car buying decision, the same way you would, should Drive discovery with Click-to-Messenger they walk into your dealership. You could host ads. Use Facebook targeting to reach specific contents such as: audiences and send them to your Messenger • Virtual live appointments experience. • Dealership walk around while meeting When you receive inquiries on Messenger, the staff ensure that you provide responses in a timely • Updates on specials manner - set up automation on Facebook Page • Educational videos: For example, DIY Manager such as Greetings, Instant Reply, vehicle maintenance tips Saved Replies. Don’t hesitate to personalise your replies with emojis and sign off with your • Employee spotlights real name to build a genuine connection with • Live Q&As from interested customers your consumers. • Push out “Shop from Home” which demonstrates Dealer site functionality Messenger Live & Stories on Facebook and Instagram and education Free & Paid Free Consumers expectations have changed due Consumers are less likely to be actively Take advantage of the best free and paid tools to digital platforms and growing expectations visiting dealerships due to COVID-19 social available on Facebook today to support your of personalisation. 3 in 4 (73%) Australians distancing measures. dealership growth amidst the pandemic and have communicated with a business using to prepare for a re-opening strategy to connect messaging2. Help potential and existing Capitalise on new and engaging formats with ever-growing digitally savvy consumers. customers get the information they need to drive branded consideration and sales outcomes. To create a positive brand 1Facebook Data, Q2 2020 quickly and easily with Messenger. In many of 2Facebook Internal Data, December 2018 the places hardest hit by the virus, messaging association for your dealership, use helpful 3Facebook Internal Data, March 2020 volume has increased more than 50%, and ‘SpinCar ads convert search views to detail views 40% better’ & ‘SpinCar ads convert views to leads 70% more efficiently’

Source: carsales internal data. Performance of SpinCar ads v non-SpinCar ads. n = 1700.

Make your inventory perform better on carsales.com.au

Phone: 1300 880 057 Email: [email protected] Web: s21.media/spin-car FEATURES Australian Automotive Dealer Association CARSALES AUTOMOTIVE INDUSTRY SUPPORT TOTALS MORE THAN $30M

arsales has continued its unprecedented carsales has been at the forefront of the carsales brought to market a number of support of the automotive industry industry’s response to the COVID-19 services during the height of the pandemic Cwith a Dealer fee rebate package for pandemic and, earlier in 2020, the bushfire that immediately allowed Dealers to better Melbourne metro business affected by the crisis – from providing advertising at no service car buyers during the period of stage four COVID-19 restrictions. charge and fast tracking Dealer buy-from- lockdowns. home technology, to offering access to its The new tranche of Dealer support measures Employee Assistance Program services for carsales’ brand new ‘Buy from home’ was will take the value of carsales’ total support affected automotive businesses. created to meet the unique trading conditions for calendar year 2020 to in excess of $30m. for Dealers and customers. The product The support includes the waiving of fees for It has also extended payment arrangements for allowed promotion of Dealers’ virtual Metropolitan Melbourne Dealers. Dealer advertisers and provided a number of showrooms so buyers could shop for and marketing products and services free of charge even take delivery of new cars from their own All metropolitan Melbourne Dealer fees will for affected businesses. homes. attract 100% rebates until the end (government notified) of stage four restrictions. This “Our support has assisted hundreds of “The support has helped Dealers to be in a includes all fixed fee advertising services and Dealers across cars, boats, bikes and other position to capitalise on improving conditions sales lead charges, and the support is available verticals with their short-term operating costs, and we are continuing to introduce new to both new and existing customers in and we are continuing to assist Dealers in products and services,” Mr McIntyre said. metropolitan Melbourne. metropolitan Melbourne,” said carsales CEO, Cameron McIntyre. “Our research during the wider lockdown The support extends beyond car Dealers and showed there was a substantial number of includes dealership businesses in all of carsales “Our priority is to help Dealers keep trading. Australians who were shopping for a car for verticals including motorcycles, boats, trucks, We’re very proud to have played our part in the first time or looking to add another car to caravans and more. supporting the industry earlier this year, and their family driveway. Right across Australia continue to play our part now.” that trend has only accelerated. carsales’ Employee Assistance Program services have also been extended for To assist Dealers large and small across “Keeping Dealers in business and able to metropolitan Melbourne Dealers and Australia, carsales rebated a range of address consumers’ needs is important for the their employees to provide any necessary advertising and subscription fees in April wider economy.” counselling. and delivered a 50% discount on others in May. The support measures also allowed its customers to defer payments.

automotivedealer.com.au | SEPTEMBER 2020 | 53 FEATURES Australian Automotive Dealer Association ACADEMIC RESEARCH ON FRANCHISING IN THE AUSTRALIAN AUTOMOTIVE INDUSTRY: THE RESEARCH TEAM SEEK YOUR INPUT

he AADA has been contacted by a The purpose of this research is to better Click here for more information on the research team of the University of understand, then report the most accurate research project. Tthe Sunshine Coast (USC), who insights into the franchise sector and how it are conducting research investigating the operates within the Australian automotive If you wish to participate or need further franchise model in the Australian automotive industry. information please contact: industry. AADA Members are encouraged to participate Adiba Fattah For an interview-based study, researchers in this research as your valuable insights PhD Researcher from the USC Business School are seeking will help to promote understanding of the University of the Sunshine Coast new car Dealers’ comments and perspectives franchising relationship within the Australian E: [email protected] on the franchising relationship and the role automotive industry. M: +61 411 834 701 played by the Franchising Code of Conduct in overseeing the Australian automotive industry.

macpherson kelley understands motor dealers, the industry is in our blood. Our team includes Prinicpal Lawyers in Melbourne, Sydney and Brisbane who have decades of experience, an extensive list of clients and provide quick, cost effective, “can do” advice. We understand the industry is highly competitive and margins are tight; with this comes unique legal, regulatory and business issues. james sturgess We are here to help. Call us to arrange a national director, catch up to discuss employment, acquisition, motor dealers 0419 754 870 manufacturing or consumer disputes matters. [email protected]

1800 888 966 new south wales queensland victoria [email protected] sydney brisbane melbourne mk.com.au dandenong FEATURES Australian Automotive Dealer Association

MAINTENANCE - IT’S NOT JUST FOR VEHICLES

Dealerships are just like my garden: you have • Landscaping in tip-top shape to take care of the building, the equipment Lloyd Schiller and the people—if you want your dealership • Rubbish bins and cigarette disposal bins Fixed Operations to look and perform at its best. You have clean and convenient Consultant to continually add better processes, new • Safety markings & speed limit signs all equipment, more people when appropriate, look fresh and eliminate what doesn’t add value. • Signs and posters current and clean Brooke Samples I have found checklists to be valuable tools for a smooth running dealership; and keeping on • Windows cleaned (set up a schedule) President, top of the maintenance of a dealership is the Profit Blueprints, perfect scenario for the use of checklists. • Stickers & invoices on vehicles (checked LLC weekly) The benefits of a clean facility will not only be appealing to potential customers, but clean, • There should be no peeling paint, fading In the latest of our series, thanks to legendary pleasant surroundings reduce stress, help or scuff marks service adviser trainer, Lloyd Schiller, of create higher levels of job satisfaction and LloydSchiller.com and Brooke Samples of Profit boost productivity of your staff. Plus you Checklist for inside of the building Blueprints, Brooke stresses the importance of can reduce the likelihood of customer and • Signs and posters current, clean & with maintaining all aspects of your dealership. employee accidents. positive messages s I was weeding my garden for the Once you’ve got your dealership in shape • Employees’ lunch room clean, including fourth time this year it occurred (and are able to host gatherings), how about refrigerator Ato me that there had to be a better an open house for your best customers? A luncheon is a great way to renew relationships way: once done, the garden should STAY • Customer lounge furniture cleaned in pristine shape! After all, just two weeks with commercial or fleet customers or prior, I had done my best work and it had strengthen body shop relationships with • Any carpeted area cleaned looked spectacular. But now, I was back insurance companies. weeding again. Not only that, but new gaps • Supply & forms cabinets organised, Checklist for outside of the building had appeared indicating I needed to add outdated forms destroyed more plants, and there was one plant that just • Parking lot clearly marked and free wasn’t growing as it should. • Account for all equipment—compare to of potholes (pay close attention to the fixed asset schedule customer parking) That got me to thinking…everything needs • Equipment maintenance (on a schedule) maintenance. Even the most beautiful gem • Building exterior free of clutter looks better with a little polish. Bottom line: (especially around the exits) • Parts shelves free of empty packaging you can’t just devote a little, or a lot, of time to something once in a while, leave it alone, and • Exterior lights all working • Walls and doors free of scuff marks and hope it will stay that way forever. hand prints.

automotivedealer.com.au | SEPTEMBER 2020 | 55 CREATE A VIRTUAL EXTENSION OF YOUR DEALERSHIP

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