OFFICIAL PUBLICATION OF AADA MARCH 2019 | ISSUE 26 2020 + BEYOND AT AADA CONVENTION

INTERNATIONAL GUESTS LEAD CONVENTION LINE-UP FRANCHISE ENQUIRY SLAMS CODE BANKING ROYAL COMMISSION - CONSEQUENCES FOR THE AUTOMOTIVE INDUSTRY

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CONTENTS ISSUE 26 | MARCH 2019

FEATURE: AADA 2019 NATIONAL DEALER CONVENTION & EXPO 2020 + Beyond At AADA Convention...... 5 CONTACT AADA Office 6, Level 4, 150 Albert Road NADA Legal Counsel To Headline AADA...... 6 South Melbourne, VIC 3205 UK’s Leading Trainer Heads Convention Sales Event...... 7 CONTACT AUTOMOTIVE DEALER 936B Glenhuntly Rd, Expo Open Day Event A New Bonus...... 8 Caulfield South, VIC 3162 Issue No. 26 | MARCH 2019 POLICY PUBLISHER: AADA Blackhall To Consult As Transition Plan Takes Shape...... 9 MANAGING EDITOR: Luke Prendergast AADA To Work With Government On Point Of Sale Exemption...... 10 PRODUCTION MANAGER: Stace Agombar CREATIVE DIRECTOR: Charles Bayer Dealers Welcome Increased Protections Outlined In Report Of Franchising Inquiry..11 ART DIRECTOR: Nick Murphy Dealers Support EV Revolution...... 12 ADVERTISING MANAGER: Geoff Vine [email protected] Banking Royal Commission - Consequences For The Automotive Industry... 13 Mobile: 0413 854 779 AADA Gathers Franchise Code Intel At NADA...... 15 Phone (03) 9576 9944 | Fax (03) 9576 7277 AUTOMOTIVE DEALER Unfair Contract Terms And Warranty Audits – Limitations And Opportunities.. 16 DELIVERY/CHANGE OF ADDRESS (03) 9576 9944 or FEATURE: 2019 AADA NADA STUDY TOUR [email protected] EDITORIAL Tour Delegates Get Social At NADA San Francisco...... 18 [email protected] FEATURES EDITORIAL & ADVERTISING OFFICE 936B Glenhuntly Rd, ATO Crackdown On Dual Cab Utes...... 23 Caulfield South, VIC 3162 Buffett Invests In SA Auto Insurance...... 24

No responsibility is accepted by the publisher Sales Consultants Can Do Better: JD Power Survey...... 25 for the accuracy of information contained in advertisements in the Automotive Dealer Be A Leader In Developing Leaders...... 27 magazine. Publication of any advertisement does not constitute endorsement by the publisher of any product, nor warrant its suitability. Why Independent Dealers Need An Automotive CRM...... 32 Advertisements are published as submitted by advertisers. Auto Industry’s Takata Website Leads To 1 Million Airbag Replacements...... 34 COPYRIGHT No part of this magazine may be reproduced without the publisher’s written permission. More Than 87,000 New Vehicle Sales In February...... 35 CONTRIBUTORS The views expressed in Automotive Dealer by Why You Must Text Your Customers...... 36 external contributors and advertisers are not necessarily those of AADA. Harley Goes Electric...... 37

AUSTRALIAN MOTORSPORT @AADA_ASN AUTOMOTIVE DEALER ASSOCIATION Supercars 2019 Season Opens With Plenty Of Changes...... 29 WE’D LIKE TO HEAR FROM YOU. We’d like to hear from you about what’s been schools, supporting junior sporting clubs or It’s a pity that the community work being happening at your dealership that you think sponsoring a charity event. done by Dealers is a well-kept secret. We could be worth passing on to our readers. intend to change that. AADA is determined We would like to know. to generate a greater respect for new car It can be anything from a unique sale, a fleet franchise Dealers as compassionate business deal or a story about a member of your staff Whatever the story you have, it will be good people. Part of our strategy is to remind the who recently accomplished a notable feat. reading. Send us the information and key media, politicians and opinion makers that, contact details and we will follow it up. If you by employing over 66,000 people, AADA It could be a ‘feel good’ community initiative have photographs of the endeavour so much members make a substantial contribution to you have undertaken involving local the better. the Australian economy. Is your data secure?

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2020 + BEYOND AT AADA CONVENTION

he AADA National Dealer Convention or at least keeping pace with it. There are many The UK’s number one automotive sales & Expo returns to Melbourne in 2019 questions facing the retail automotive industry trainer, Simon Bowkett, returns to feature at Twith the theme ‘2020 + Beyond’. and the Convention will address them via a the AADA Convention Team Sales Event, comprehensive and meticulously-planned while a new initiative is a free Expo Open To be held at the Melbourne Convention and program. Day for middle managers, to more fully share Exhibition Centre from September 9 to 11, the the knowledge, technology and associated 2019 Convention & Expo has been designed Questions such as: In the wake of the ASIC products developed to drive success in the to help car retailers adapt and prepare for the inquiry into finance and insurance, what will modern automotive dealership. future by addressing changes in the dynamics the new F&I department look like? How do of the market. we continue to strengthen our relationships Four sessions comprising expert panels will with the OEMs, with whom our futures are discuss and debate issues close to the heart of inextricably linked? What will be the result of car retailers, including gender diversity and the proposed franchise code? What do we do succession planning. about diversity? Succession planning? Used cars? ROI? No matter how far technology advances business is still about people, and how we AADA has put together a program of panel employ that most vital of resources is critical to sessions, workshops and guest speakers our success. Training, reputation management, designed to address these questions and more. service departments, used cars, data – all involve people and how we deal with them – Award-winning international journalist and Headlining the event is NADA’s Chief Legal and advocacy: the importance of our industry chat show host, Anjali Rao, returns after Counsel, Andy Koblenz. The Executive having a clear vision and a cohesive approach. she was extremely well-received at the 2018 Vice President Legal and Regulatory Affairs None of these crucial human resources are Convention. The former Sky News and addressed the 2019 NADA Convention on the going to become any less significant. In fact, CNN reporter and anchor charmed all and subject of Disruption in the Auto Industry, in a world of technology the human touch is sundry with her eloquence, affability and and his thoughts on this challenge to our more valuable than ever. People skills: they’re professionalism. existing paradigm of operations are sure to be the future, in 2020 + Beyond. enlightening. His session should be on the list Our industry is undergoing rapid change. As of any Dealer aiming to encounter the future We look forward to seeing as many Dealers as Dealers we need to be in front of that change, with open eyes and mind. possible at the AADA 2019 National Dealer Convention & Expo.

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1300 837 327 FEATURE: AADA 2019 NATIONAL DEALER CONVENTION & EXPO Australian Automotive Dealer Association

NADA LEGAL COUNSEL TO HEADLINE AADA

isruption. It was the theme of models will supersede traditional car The potential savings from not owning a the AADA 2018 National Dealer ownership. With research showing, however, car were estimated to be US$3,445 annually, DConvention and it was a subject that the average American family makes 10 which, with an average wait time of one addressed in detail at the NADA 2019 car trips per day – and with an average wait hour per day, equated to US$9.44 per hour. Convention in January. time of six minutes per ride sharing trip – Mr Considering 88.5 per cent of respondents Koblenz argued that it was hard to see people earned more than US$9.44 per hour, the NADA's Executive Vice- giving up their cars and waiting around for an survey concluded that the financial savings President of Legal and hour per day in order to run their errands. were not worth the time expended in waiting Regulatory Affairs, Andy for ride shares. Koblenz, alongside Senior Nearly 90 per cent of Americans surveyed said Vice-President of Public they had no plans to give up their personal The survey also examined attitudes to Affairs, Jonathan Collegio, cars. Just 11 per cent said they would get rid of autonomous vehicles (AVs), with 56 per cent presented research showing their car in favour of ride sharing. of respondents saying they would purchase an that the disruptors still have a long way to go AV. Amongst millennials this figure was 71 per before replacing the traditional model of car The under-35s, aka the ‘Millennial generation’, cent, while for the over-35s it was 49 per cent. ownership. were slightly more prepared to give up their personal vehicles, with 81 per cent of those Regarding the degree of autonomy, 80 per cent Mr Koblenz will be a special guest at the surveyed indicating they would. However, the said they would prefer mostly autonomous AADA 2019 National Dealer Convention & over-35s showed strong resistance, with 93 per cars with an 80 per cent safety increase, while Expo in Melbourne from September 9 to 11. cent stating they would keep their personal car. 20 per cent said they preferred near-complete He will speak to the subject of Disruption, safety with fully autonomous vehicles. sharing his belief that the traditional model of An overwhelming 93 per cent of all respondents automotive dealerships has a fair way to go yet said that a car provides freedom, while just Mr Koblenz will present the full findings of before being replaced. seven per cent said car ownership was a hassle. the survey at the AADA 2019 National Dealer Amongst millennials this split was 85-15, while Convention & Expo in September. We have heard predictions over the past for the over-35s it was a massive 98-2 split. few years that ride sharing and subscription Turnkey workshop fitouts improve your ROI Complete solutions: Design, Planning, Project Management

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www.levanta.com.au p. 1300 577 541 FEATURE: AADA 2019 NATIONAL DEALER CONVENTION & EXPO Australian Automotive Dealer Association UK’S LEADING TRAINER HEADS CONVENTION SALES EVENT

he UK’s number one automotive sales product, and then supporting this with the deal. Simon believes the key to successful trainer, Simon Bowkett, is the headline management is organisation and motivation Tname featuring in AADA’s Team Sales The skills – good and bad – your new of yourself and others. His study of theories Event at the AADA 2019 National Dealer salespeople learn in the first 90 days on the job of human behaviour on top of his own life Convention & Expo. last with them for the rest of their careers. Who experience has well equipped him to analyse is teaching them those important skills that are what makes successful management and, Simon returns for his third AADA Convention, either making or costing you sales? crucially, how to implement this and inspire having previously spoken at the 2009 and 2014 others. events. Who is Simon Bowkett? This is a golden opportunity for your sales staff In 2000, Simon founded Symco Training based Having moved from sales into sales management, and following a period of to learn first-hand from one of the leading on his belief that sales trainers were either sales trainers in the world. The perspective and unwilling or unable to show sales staff how to successful senior management, Simon moved into training. experience of someone who has risen to the implement the solutions they proposed. Simon top in one of the world’s toughest markets can believes in delivering not only inspiring and He saw in the market a gap for trainers who only benefit your people and send them home insightful training but in demonstrating those could bring ‘the real world’ into training, and armed with the knowledge and confidence to skills and techniques with real customers. in 2000 formed Symco Training to build a go to the next level in their careers. team of trainers and consultants who could In dealerships around the world the focus AADA is thrilled to have secured someone of applied by many sales executives is to try bring practical experience and proven success to their training methods. “There’s no place for Simon Bowkett’s calibre, and we look forward to and sell a deal. Simon will tell you how to get this event with keen anticipation. your teams to focus on selling themselves, the customer-shy trainers in Symco”, he says.

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EXPO OPEN DAY EVENT A NEW BONUS

nyone who has been to an AADA the retail automotive industry are sure to take The Expo is always the hub of activity at Convention will appreciate what a plenty from this free opportunity to visit the any AADA Convention, with displays, Awealth of information they provide. 2019 Expo. demonstrations and explanations of new and You can’t help but come away more informed, innovative products, services and technology, with a greater understanding of the issues This is ideal for middle managers to come and specifically designed to improve the operations facing our industry and the many potential see exactly how much innovation is happening and bottom line of dealerships and their solutions to those challenges. in our industry, familiarise themselves with various departments. Be sure to register to take new products and technology, and acquaint advantage of this fantastic opportunity. We know Dealers would love to send all themselves with those people and companies their staff because there is so much to learn; providing new and improved services. however, we understand that is not always HOW TO REGISTER cost-effective. It is a great way for those who might otherwise not get the chance to attend an AADA So now, in an exciting new initiative, AADA Convention to gain an understanding of what The Expo Open Day is a free event, is introducing a free Expo Open Day to more goes on, and absorb some of the knowledge but attendees are required to fully share the knowledge, technology and that is shared so generously. They will have register. To do so, visit the website: products developed to drive success in the the opportunity to rub shoulders with leaders aadaconvention.com.au modern automotive dealership. of our industry and take home real, practical Date: Monday 9 September 2019 solutions and a greater understanding of the Dealers, managers, staff, allied industry bigger picture of the retail automotive game. Time: 1.30pm – 7.30pm professionals and anyone else associated with

8 | MARCH 2019 | automotivedealer.com.au POLICY Australian Automotive Dealer Association

BLACKHALL TO CONSULT AS TRANSITION PLAN TAKES SHAPE

ADA CEO, David Blackhall, will “We thank David for his leadership and look Blackhall’s CEO services contract ends 30 June reduce his full-time commitments at forward to continuing close ties through to the 2019. He has indicated a desire to step down Athe end of his current contract on 30 end of the year,” Mr Keating said. from his CEO role at that time and generally June 2019. AADA is delighted that David reduce his full-time commitments. will continue in a consultancy and advisory AADA has announced the following changes capacity to the AADA for a further six to the organisation of the AADA Secretariat, At the Board’s request, David has agreed months until 31 December 2019. effective immediately: to continue working with the Board in a consulting and advisory capacity through the Separately, AADA is announcing leadership • James Voortman, Executive Director end of 2019. He will be concentrating on the transitional arrangements in accordance with a Communications and Policy, is being delivery of the Automotive Code. plan approved last year by the AADA Board. appointed to the newly-created position of Deputy CEO. James will continue The Secretariat changes are in line with a AADA Chairman, Terry Keating, said David to report to the CEO, David Blackhall, leadership transition plan developed and has been an outstanding CEO for AADA. until 30 June 2019. approved by the AADA Board last year. These arrangements are aimed at allowing James During his almost four-year tenure he has • Brian Savage, Executive Director and Brian to progressively assume their wider guided the Association through a period Operations, is being appointed to duties during the next four months, under of unprecedented regulatory and legislative the newly-created position of Chief David’s guidance and mentorship. change. Whilst some of these regulatory Operating Officer. Brian will also changes are still being negotiated, David has continue to report to the CEO for the The AADA Board will make an agreed with the Board to continue to assist same period. announcement on the full-time replacement us during 2019, through to fruition on these for David Blackhall as CEO as soon as important matters. All other Secretariat positions and reporting possible. We expect to make further relationships remain unaltered. David announcements about our Secretariat organisation in early July 2019.

automotivedealer.com.au | MARCH 2019 | 9 POLICY Australian Automotive Dealer Association AADA TO WORK WITH GOVERNMENT ON POINT OF SALE EXEMPTION

ADA will work with the Federal Government to ensure the AGovernment’s decision to abolish the point of sale exemption for retail Dealers providing car finance does not hurt the industry.

The decision, based on a recommendation in the Banking Royal Commission, caught the new car industry by surprise when it was announced in February.

Amongst 17 recommendations in the report was that the Government remove the exemption of retail Dealers from the operation of the National Consumer Credit Protection Act (NCCP Act). The Government accepted the recommendation.

Larger dealer groups already hold credit licences, but only a few dozen Dealers are understood to hold credit licences.

In its response to the report, the Government “Leadership in this area is with the finance providers of the finance and play no part in said it recognised the impact the change would providers and we look forward to working approving or rejecting finance applications. have on many businesses. with them to ensure that financiers, Dealers The Government also agreed to changes in the It said it "will carefully consider how these and consumers are not disadvantaged during sale of add-on insurance products by Dealers, reforms are implemented to ensure balance is this transition.” including working towards a deferred sales achieved between consumer protection and Mr Blackhall said it was unclear why model and the imposition of a cap on the access to products and services." the exemption needed to go. Obtaining amount of commission paid to vehicle Dealers. AADA CEO, David Blackhall, said the point of finance from a dealership is a cost-effective, “The concept of a deferred sales model is sale exemption was only briefly mentioned in convenient solution for many consumers and already under consideration by ASIC. We the Royal Commission’s interim report, so to the Royal Commission, by its own admission, will be urging Treasury to adopt a model that find its abolition was now Government policy repeatedly said that delinquencies in the car defers the sale for around three to four days was a surprise. finance market are very low. and allows informed consumers a waiver,” Mr “It is unclear what this policy will mean for One factor likely to help Dealers is that the Blackhall said. the provision of finance at dealerships. It is exemption also applies to other National retail “Allowing ASIC to impose a cap on add-on not certain how many new car Dealers already chains and other stores that offer credit to insurance commissions will only formalise a have credit licences, but we do know that assist consumers with big-ticket items such as practice already being employed by the main many mid-to-small and regional dealerships white goods and furniture. insurance companies.” do not,” Mr Blackhall said. As with Dealers, shop assistants can currently There will also be a review on commissions “I appreciate the Government’s commitment offer loans or credit cards and help customers for general insurance and consumer credit to carefully consider how this reform is fill out the forms without holding a credit insurance, to test whether the exemption to implemented. The AADA will make ourselves licence. the ban on conflicted remuneration remains available to work with the Government to Dealers operate as vendor introducers who justified, which the AADA looks forward to ascertain the impact this will have on Dealers facilitate car finance and make it convenient participating in. and to ensure the transition is as smooth as for customers to obtain. Dealers are not the possible.

10 | MARCH 2019 | automotivedealer.com.au POLICY Australian Automotive Dealer Association DEALERS WELCOME INCREASED PROTECTIONS OUTLINED IN REPORT OF FRANCHISING INQUIRY

ADA has welcomed calls for increased In a damning report released on 14 March, The report suggests the government protections for Dealers contained in the the federal parliamentary inquiry into the create a franchising task force, made up Areport from the Parliamentary Inquiry $170 billion franchising sector called for a total of representatives from Treasury and the into Franchising. overhaul of Australia’s franchising system. Department of Jobs and Small Business, to look into its recommendations. AADA CEO David Blackhall said the While both the Government and Opposition association welcomed the recommendation for have committed to the establishment of an The Opposition has said it will support such changes to the Franchising Code, to embody industry-specific Automotive Franchising a task force and act on its recommendations. specific industry protections within schedules to Code, it can only help the cause of franchisees Small Business Minister Michaelia Cash said the current Franchising Code. to have this kind of spotlight shone on the many the government would analyse the report and issues and unfairnesses built into the current consider what improvements needed to be “While the Report stopped short of system. With pressure now to be applied to the made. recommending our preferred approach of a franchisor side of the relationship, this marks standalone Automotive Code, we are prepared an opportunity for retail automotive Dealers to "The government is committed to supporting to discuss with Government the Committee’s pursue more equitable rules and regulations to effective and fair reforms to the franchising proposal for a core Franchising Code with ensure a fairer outcome. sector without imposing unnecessary regulation greater powers, and schedules to the Code that on the sector," she said. address specific industry considerations,” he The bipartisan report calls for new laws, greater said. enforcement powers and penalties for the The report also calls for improvements regulator, as well as a host of changes to the to disclosure and transparency, including “We particularly welcome the prohibition on franchising code. provision of all financial information when unilateral changes to the Terms and Conditions franchises are sold or transferred. This would of Dealer Agreements, and the buyback The report states that the current franchise code include Business Activity Statements and conditions for stock, parts and equipment has "manifestly failed to deter systemic poor increased clearness and culpability with regard when a Dealership Agreement is terminated. conduct and exploitative behaviour and has to marketing funds. The Government needs to include these entrenched the power imbalance". Its authors proposals in their consideration of a standalone even went so far as to compare behaviour in It recommends the task force consider making Automotive Code. the franchising sector with that revealed by the illegal the provision of unfair contract terms banking royal commission. in franchise agreements, and explore the “It is now very important for the Government possibility of a public franchise register, via to respond to the Inquiry Report quickly. This "The extent of poor corporate governance in which franchisors would update disclosure will maintain momentum and address the some areas of franchising is comparable to that documents and template franchise agreements power imbalance between overseas vehicle in the financial services sector," it said. "There on a yearly basis. Manufacturers and local new car Dealers, which are deeply rooted cultural problems that will currently leaves Australian businesses and their not be resolved by a franchisor replacing a few The report calls for civil penalties if franchisors many employees extremely vulnerable.” senior executives." fail to comply.

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https://www.graysonline.com/automotive-trucks-and-marine/motor-vehiclesmotor-cycles/motor-vehicles POLICY Australian Automotive Dealer Association DEALERS SUPPORT EV REVOLUTION

ADA has welcomed the release of a report by the Senate Select Committee AInquiry into Electric Vehicles, but disagrees with its suggestion that Australia’s retail automotive Dealers were failing to promote growth in EV sales.

The report was critical of a ‘policy vacuum’ that has so far kept the EV industry from growing, warning that Australia would miss out on the coming ‘transport revolution’.

“(Electric vehicle) uptake in Australia lags behind that of other comparable countries due to a relative absence of overarching policy direction from Australian governments,” the report said. and will sell whatever vehicles our customers Other recommendations include a dedicated AADA CEO, David Blackhall, said AADA want,” Mr Blackhall said. taskforce to develop the plan, a national target supports the Senate Committee’s report to encourage the uptake of electric vehicles “Unfortunately, the authors of this report have on electric vehicles but is disappointed by on Australian roads, more ‘coordination’ with quoted the Tesla Owners Club and ignored the evidence suggesting Dealers are not promoting operators to expand the existing charging evidence of Australia’s 1,500 franchised new the sale of EVs. network, and a national target for government car Dealers and the 70,000 people they employ. fleets. “There are some important recommendations “Electric vehicles are part of the future and in this report and new car Dealers are looking There are currently 12,691 vehicles in the Dealers are determined to be part of a thriving forward to playing our part in supplying EVs Commonwealth fleet, but only 12 are electric. industry which supplies them to the market – to the Australian market,” he said. the primary reason that they are not yet selling On costings obtained by independent senator, “We are supportive of a public education well is related to supply, cost and range.” Tim Storer, it would cost an extra $5m by 2022 campaign and a coordinated approach to skills to start converting half the government fleet Talking down the efforts of the tens of and training. We are also supportive of a CO2 to electric by 2025, or an extra $2.7m to do the thousands of dealership employees across standard and Australia should work towards same by 2030. Australia will do nothing to accelerate the an achievable standard that does not punish uptake of EVs. Further recommendations coming out of the local consumers and businesses. report included the need for an aspirational The senate committee warned that, should “It is also encouraging that the Committee target for Australia’s road fleet, similar to New governments fail to act, Australia will miss has not recommended a relaxation of used car Zealand’s, and a Formula E championship race out on the environmental, health, social and imports as was suggested by certain groups. It to encourage consumer interest. economic benefits of the growing industry is, however, very disappointing that this report New electric showroom opens in Sydney has mentioned evidence claiming that car “Australia is on the cusp of the most Dealers are not interested in promoting and significant disruption and transformation of As proof that Dealers are not biased against selling electric vehicles. This assertion, which our transport system since the advent of the EVs, Col Crawford Hyundai’s showroom was repeated by certain groups throughout the internal combustion engine,” the report said. officially opened at Brookvale in Sydney on inquiry, is completely false.” February 15. “Reductions in greenhouse gas emissions, cost Mr Blackhall said that to resist selling EVs savings for vehicle owner-operators, increased The 50-year-old dealership claims to have “the would reduce profits and put Dealers in job opportunities and economic growth, widest selection of electric and hybrid cars breach of their franchising agreements with improved health outcomes and increased that have been presented by one dealership in vehicle manufacturers, potentially risking their fuel security are just some of the benefits that Australia”. These are mainly from Hyundai, businesses. Australia can realise as EV use begins to climb.” BMW and Renault.

“In our numerous representations to this The committee made 17 recommendations, The dealership has three EV chargers. committee, we consistently made the point including calling for a national plan to manage that new car Dealers are technology agnostic the rollout of electric cars.

12 | MARCH 2019 | automotivedealer.com.au POLICY Australian Automotive Dealer Association

BANKING ROYAL COMMISSION - CONSEQUENCES FOR THE AUTOMOTIVE INDUSTRY

The Commissioner recommended abolition of other retailers having to be appointed as credit Evan Stents the point of sale (POS) exemption relied upon representatives by credit providers and being Lead Partner, by most car Dealers to be a loan intermediary recorded as such on an ASIC register. As credit Automotive Industry without holding an Australian Credit Licence representatives, Dealers will need to provide Group, HWL or being appointed as a credit representative their own credit guides and will also need Ebsworth Lawyers of a licensee. The POS exemption has applied to be members of the Australian Financial since the commencement of the National Complaints Authority (AFCA), thereby n 4 February 2019, the Government Consumer Credit Protection Act and its opening up every aspect of their business to released the final report of the Regulations. The exemption was included an external complaints process, unless AFCA ORoyal Commission on the Banking, because, in the midst of the GFC, there were exercises a discretion otherwise. Superannuation and Financial Services concerns that the burden of regulation in the retail sector under the NCCP Act would have In the Report, the Commissioner does Industry. In the Report, Commissioner not acknowledge that Dealers are already Kenneth Hayne made 76 recommendations, a further stifling effect on an already slow economy. From the outset the exemption was ‘representatives’ of Australian credit licence a number of which will have significant holders, and as a result those credit licence consequences for participants in the devised as an interim measure to be reviewed within 12 months of its implementation. holders are already accountable for Dealers, automotive industry. This article examines with a responsibility to ensure compliance with three recommendations in the Report that are While some Dealers may obtain their own credit legislation, training and management of of particular relevance to car Dealers. Australian credit licence to provide credit conflicts. Instead, the Commissioner has cited 1. Removing the ‘point-of-sale’ exemption of assistance, the abolition of the POS exemption the following observations made in the 2013 retail dealers from the NCCP Act would likely result in most car Dealers and Productivity Report into Competition in the

automotivedealer.com.au | MARCH 2019 | 13 POLICY Australian Automotive Dealer Association

Australian Financial System, that under the customers add-on insurance products (such as contracts regulated by the Insurance Contracts POS exemption: guaranteed asset protection (GAP) insurance Act. and tyre and rim insurance). • Retail Dealers are not subject to entry 3. Caps on commissions or conduct standards and ASIC has no The Commissioner is essentially adopting power to exclude from the market any ASIC’s proposal in ASIC Consultation Commissioner Hayne also recommended that who engage in conduct that is dishonest Paper 294: The Sale of Add-on Insurance and caps on commissions should be introduced for or incompetent Warranties through Caryard Intermediaries. add-on insurance products sold in connection The Report states that one likely consequence with the sale of a motor vehicle, with the level • Retail Dealers have no responsible of a change to a deferred sales model is that of the cap being determined from time to lending obligations, and the premiums payable for policies subject time by an ASIC legislative instrument. This to the model could not be financed by the recommendation was based on evidence • Consumers may be unable to obtain loan made to purchase the vehicle without given in the Commission’s sixth round of remedies for their conduct. specific adjustment of the loan arrangement. hearings, which showed that the levels of commissions paid to motor vehicle Dealers in In relation to the second and third points, In Commissioner Hayne’s view, however, connection with the sale of add-on insurance it is important to be aware that the relevant the potential inconvenience caused by this products contributed to the misselling of those lender has responsible lending obligations outcome is justified in light of the benefits to products. ASIC stated, in its September 2016 in relation to each loan originated through the consumer of moving to a deferred sales report on the sale of add-on insurance through the retail Dealer and a multitude of remedies model. The inconvenience referred to may Dealers, that in the 2015 financial year the may be available to consumers against the include the need for a further unsuitability commissions paid to Dealers for the sale of financier (by virtue of the retail Dealer being assessment and physical amendments to add-on insurance products were as high as its ‘representative’) and directly against the contract documents. 79% of the premium. ASIC also observed that retail Dealer under the Australian Consumer Another factor not mentioned in the Report the amounts paid in commissions on these Law and laws of general application. is that some extended warranty products products exceeded the amounts paid out to Nevertheless, Commissioner Hayne concluded in the market are not regulated as financial customers who made claims. in the Report that he is strongly in favour of products, because they are sold by the Dealer In 2017, in response to the perceived problems removing the POS exemption. incidentally to the sale of the vehicle under the ‘incidental product’ exemption in the created by the high commissions paid to 2. A deferred sales model for the sale of add- Corporations Act. These are currently outside Dealers, the ICA prepared a submission to on insurance ASIC’s jurisdiction and it is unclear how a the Australian Competition and Consumer deferred sales model would apply to them. If Commission proposing that insurers cap Commissioner Hayne recommended that a they became subject to a deferred sales model, commissions at 20 per cent of the premium. It Treasury-led working group should develop the deferral of their sale would likely prevent is possible that ASIC will follow the lead of the and implement, as soon as reasonably them from benefiting from the incidental ICA and cap commissions at an amount of 20 practicable, an industry-wide deferred sales product exemption. per cent. model for the sale of any add-on insurance products (with the exception of policies of In addition to this recommendation, the This article was written by Evan Stents - Lead comprehensive motor insurance). Under Report also recommends that hawking of Partner, and Christian Teese - Senior Associate, such a model, insurers or their representatives insurance products should be prohibited and Automotive Industry Group | HWL Ebsworth would be required to wait for a specified that unfair contract terms provisions now set Lawyers period of time before attempting to sell to their out in the ASIC Act should apply to insurance

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Don’t file it. Digitise it. Call Mark: 0412 847 172 or 02 9262 7357 | [email protected] POLICY Australian Automotive Dealer Association AADA GATHERS FRANCHISE CODE INTEL AT NADA

s we move towards adoption of the The consultations gave AADA important charge’ to retail warranty rates. Other states Automotive Code of Conduct, AADA insights into how such codes work in other have added a recoupment ban clause to their Atook the opportunity, during our Study markets, while UK and European Dealers were automotive franchise laws to prevent this. Tour of the National Automobile Dealers interested in Australia’s potential code. Association (NADA) Convention in January, California Dealers are confident the bill will to pick the brains of our colleagues from the AADA CEO, David Blackhall, and officials pass again and be approved by new Governor, US, the UK and Europe. held a series of highly productive meetings Gavin Newsom. with NADA CEO, Peter Welsh, and his legal Over the next few months AADA will consult director, Andy Koblenz. Other information AADA learned included with both sides of politics to develop a Dealer- the knowledge that some US states have specific Franchise Code, so we felt it pertinent They also met with senior leaders of the enacted 10-year moratoria preventing repeat and responsible to arm ourselves with the California New Car Dealers Association demands for capital expenditure on dealership best information from our friends overseas (CNCDA), Alisa Reinhardt and Anthony facilities. who already have such systems in place or are Bento, who are in the process of negotiating Other valuable clauses of franchise codes exploring the possibility of introducing their legislation eradicating some of the more included a ban on OEMs installing another own versions. problematic practices some OEM importers in Australia undertake. dealership within 10 miles (16.1km) of an At the September 2018 AADA National existing store, and an appeals process that Dealer Convention and Expo, the Labor Having unanimously passed the Californian allows Dealers to appeal to a government- Party committed to a Code of Conduct – a legislature, the bill was vetoed by then- appointed, low-cost tribunal should OEMs try commitment the Coalition matched prior to Governor Jerry Brown because he was to dismiss or not renew a Dealer’s franchise Christmas. concerned that the requirement for agreement. manufacturers to pay Dealers retail rates for During NADA 2019, AADA held a series of warranty work would raise the price of repairs AADA also spent time with dealer association meetings with our international friends in for car owners. leaders from other US states, plus those from San Francisco, picking up vital background India, Canada, Italy and Brazil. We have information that will assist us in negotiating That should not be the case, because the cost of learned a lot from these meetings and we the formation of the code. warranty is a cost to the OEM rather than the will be incorporating this into our thinking retail customer; however OEMs in some states as we move forward to the Automotive Code have added ‘a warranty retail rate recoupment discussions this year.

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automotivedealer.com.au | MARCH 2019 | 15 POLICY Australian Automotive Dealer Association UNFAIR CONTRACT TERMS AND WARRANTY AUDITS – LIMITATIONS AND OPPORTUNITIES

The inclusion of warranty policy terms with requirements of a small business contract Vinesh George the onerous requirements mentioned above means that Dealers are not protected from Company Secretary would likely be deemed unfair. The warranty UCTs in the ACL. and Legal Counsel, policy terms place an unbalanced burden AADA | Principal, on Dealers to conform to the stringent There are, however, two possible solutions VS George Lawyers requirements of the distributors and also that could assist Dealers. The first is the place all the risk of an express manufacturer existence of the Motor Dealers and Repairers Act NSW and, more specifically, s142 of this rotections for consumers against warranty on Dealers when product issues Act, which contains the UCTs legislation unfair contract terms (UCTs) in are the responsibility of the distributor and from the ACL. This protects Dealers in NSW; standard form contracts were first manufacturer. The warranty policy terms are P however, Dealers outside NSW do not benefit introduced into the ACL in July 2010. The unreasonable and unnecessary for protecting from the protection. A second solution is extension of these protections to standard the distributor’s legitimate interests, as for Dealers to restructure their businesses form small businesses contracts came more Dealers can have proof of the validity of so that they are able to meet the legislative than six years later, in November 2016, their warranty claim and yet can still have requirement in the ACL of having fewer than along with a Government commitment their warranty payments clawed back. 20 employees. to review this extension within two years Furthermore, the warranty policy terms cause financial detriment to Dealers, as they are of the extension. In accordance with its The purpose of UCT legislation is to forced to cover the expense of the warranty commitment, a discussion paper was protect from entering into standard form repairs themselves. released in November 2018 with the purpose contracts vulnerable parties who lack of seeking feedback from stakeholders on Under current legislation, most Dealer the skills, resources, time and bargaining the impact of extending protections and agreements are effectively excluded for not power to negotiate for their contractual whether the objective set for original reform meeting the definition of ‘small business interests. Extending these protections to has been met. The Australian Automotive contract’ and this leaves Dealers unprotected small businesses came out of the recognition Dealer Association (AADA) responded to and vulnerable to exploitation by distributors. that small businesses can often be just as the discussion paper supporting the review, vulnerable as consumers when entering but noted some of the key limitations of A contract is a small business contract if: into contractual relationships with large UCTs for Dealers. The extension of UCT organisations. Dealers, just like small legislation to small business contracts has (a) the contract is for a supply of goods or businesses and consumers, have the same, if been a positive change for many; however, services, or a sale or grant of an interest not more, vulnerabilities when entering into its limited scope has sidelined Dealers from in land; and contractual relations with distributors. making any use of this protection. (b) at the time the contract is entered into, An improved and more inclusive legislation Several distributors include UCTs in their at least one party to the contract is a should focus on including all franchise warranty policy documents which require business that employs fewer than 20 agreements. This would be more aligned Dealers to conform to strict process persons; and with the stated aims of UCT legislation to requirements. Failure to comply with protect vulnerable parties in large standard (c) either of the following applies: these strict requirements is often enough form contracts. The advantage of legislating justification to claw back warranty payments to include all franchisees is that it recognises due to Dealers. For example, some warranty (i) the upfront price payable under the contract does not exceed $300,000; the true source of the problem which policy documents require strict adherence to is inequality in size and power between the following: (ii) the contract has a duration of more contracting parties. Current legislation is attempting to deal with this issue in a 1. Dealers must take a digital photo of a than 12 months and the upfront piecemeal way by slowly and inefficiently vehicle part replaced under warranty. price payable under the contract does not exceed $1,000,000. expanding the coverage of UCT laws. 2. Dealers must have a warranty repair order For further information, signed by the service manager. A dealer agreement between a Dealer and distributor usually fails to meet parts (b) contact Vinesh George on 0404 077 078 3. Dealers must have entered clocking on of the legislation. Most dealers employ far or email [email protected] and off times when conducting warranty more than 20 employees. Failure to meet the repairs.

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TOUR DELEGATES GET SOCIAL AT NADA SAN FRANCISCO

oday everything starts with Google, and Then there are the brightly coloured bicycles this year’s AADA NADA Study Tour and e-bikes Googlers use to get around Tto San Francisco in California was no Googleplex. “We just jump on the closest one exception. and pedal to where we need to go, then leave it for the next person.” said our guide. Our hosts at Googleplex (a sprawling 16,700m2 campus designed by Clive Wilkinson Architects in 2005) welcomed us with yummy lattes, cappuccinos, muffins and more before we started our tour.

While most of us were impressed by this facility, we were completely stunned hearing what the company provides for its employees.

Our guide told us that she and her colleagues never go hungry; the company serves free pizza, salads, tacos, vegetarian dishes, pastas and deserts at one of the many cafeterias and The next stop was the conference room, where delis spread across the entire complex. our guide walked us through an informative Flower power presentation of how partnering with Google would help Dealers better understand their On our way to the conference room we were Our guide also mentioned the recreational individual markets and help them sell more invited to smell the whimsical Alfa Flowers facilities available to employees, including cars. and were blown away when they magically bowling alleys, swimming pools, dance changed colours to match the fun moods and studios, gyms, tennis and basketball courts, Note for those who are tempted to apply for a emotions we expressed. massage rooms and nap pods. job with Google: the company receives more

18 | MARCH 2019 | automotivedealer.com.au than one million applications a year and only Then the 35-strong AADA group and Commenting on the size and scope of the 0.5 per cent are actually employed. the 20,000-plus US Dealers and industry NADA Expo, Motorweb’s Paul Hardiman said, executives were invited to the official J. “Very informative, wide range of products with Then it was back on the bus for lunch and D. Power “Escape from Alcatraz” NADA multiple providers to choose from.” another enlightening presentation from the Welcome Reception at the plush San Francisco Gumtree team at eBay in San Jose. Marriot Marquis.

This fun evening was a great way to kick off Of special interest to the writer were the the Convention, catch up with colleagues and SpinCar and Snap21 booths. Both were While eBay’s HQ may not have the same wow make new friends while enjoying cocktails, Dealer magnets generating exceptional factor as Google’s, it was still pretty impressive delicious finger food and immersing ourselves sales and success, with SpinCar winning the – as was our lunch. in the history of Alcatraz, a former maximum 2019 NADA Automotive Website Award security prison known as ‘The Rock’. for Website Merchandising for the third Their pitch to us covered how to best utilise consecutive year. the assets available to Dealers using the The greatest show on earth combined resources of eBay motors, Gumtree With so much activity in the Expo it was hard and Marketplaats. finding time to attend some of the workshop sessions, which included Fixed Operations, Oh what a Sunnyvale feeling! Human Resources, Dealer/Executive, Legal & From eBay we travelled to one of San Regulatory and, of special interest to me, two Francisco’s most successful dealerships, Marketing sessions. Sunnyvale Toyota in Sunnyvale. ‘Five Digital Marketing Myths That Can Hurt Your Bottom Line’ was presented by True Car’s Kerri Wise, who firstly tackled a number of Dealer marketing myths that create inefficiencies in their marketing spend, and Over 500-plus companies showcased then identified alternate strategies aligned with thousands of products in the three main halls actual consumer behaviour. spread across three blocks and 35 hectares in SOMA (South of Market). The second workshop, ‘Cutting Through The Clutter’, was presented by Paul Caldwell, Exhibitors included OEMs Toyota, Fiat Partner at CK Advertising, a TraDigital Chrysler and Ford. Other product categories Agency based in Florida. Paul discussed represented covered Service and Parts, Crash how digital and traditional advertising can Repair Equipment, New and Used Car Sales, work hand-in-hand to deliver the results Finance, IT, Accessories and Marketing. Dealers demand in today’s ultra-competitive environment. Sunnyvale Toyota is part of the Price Simms Auto Group, which sells 21 different WES LUTZ special guest at International automotive brands in seven locations in the Relations Dinner San Francisco Bay Area. In the evening we attended the AADA General Manager, Mike Shum, explained Gumtree International Relations Dinner at to the group how they sell around 600 new up-market Morton’s The Steakhouse on Union and used vehicles per month, using their Square, considered by many respected food sophisticated online process as well as writers to be California’s premier steakhouse. traditional on-the-floor-sales methods.

automotivedealer.com.au | MARCH 2019 | 19 2019 AADA NADA SHOW STUDY TOUR FEATURE Australian Automotive Dealer Association

New NADA Chairman calls on Dealers to get behind the association

In the afternoon everyone moved to the NADA General Session in the Moscone South Ballroom where Wes Lutz, the 2018 NADA Chairman, passed over the Gavel of Leadership to Charles Gilchrist, the new 2019 NADA Chairman.

Our special guest was Wes Lutz, a 40-year The room features pool tables, shuffle ball retail automotive veteran and 2018 NADA and two walls of giant TV screens showing Chairman. Wes highlighted the challenges snowboarding, basketball, NFL, baseball and facing the auto industry, such as self-driving more. cars, ride hailing and EVs. Other distinguished guests included seven former NADA This final event of the AADA NADA Study Chairmen as well as numerous international Tour, hosted by Corporate Blue, was a great visitors. way to relax and exchange ideas, catch up with friends, have a beer and enjoy some delicious Saturday morning was the last opportunity to In his first address to delegates Gilchrist, a food. visit the NADA Expo, check out the booths Dealer from Texas, urged every Franchised missed on the previous day and participate in Dealer to get involved in NADA, saying that John Fountain of Saleslogs summed up more workshop sessions. the auto retail sector needs engaged and active the evening and tour brilliantly when he association members “now more than ever.” commented: “Had a fantastic time networking with people from the industry.” While Gilchrist’s address was all business, Emmy award-winning actor and comedian Dana Carvey’s was all fun, as he kept us AADA NADA Show 2020 entertained with impersonations of US politicians and Presidents, hilarious jokes and Study Tour - Las Vegas entertaining stories from his acting career. For information about the AADA As someone on the way out of the Ballroom NADA Show 2020 Study Tour to was heard to say “Carvey is one funny dude.” Las Vegas, 13-16 February, 2020 Australia Day celebrations contact: One that particularly interested me was ‘Seven Patrick Tessier Then it was time to celebrate Australia Day at P: (03) 9576 8900 Futurist Social Media Trends for Success the Golden Gate Tap Room. in 2019’ by Joey Little from AutoAlert. He E: [email protected] examined the seven social media marketing The party, which was sponsored by Carsales and content trends that will be prevalent and Pentana Solutions, was held on the top Or Click Here to Register in 2019, how they will directly impact on floor of the three-storey Tap Room – a massive Your Interest Online! Dealerships and ultimately increase sales adult playground and boutique brewery through communication and branding. located on Union Square.

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autotrader.com.au FEATURES Australian Automotive Dealer Association ATO CRACKDOWN ON DUAL CAB UTES

- travel that is incidental to travel in the How do I mitigate the FBT risk? Randall Bryson course of duties of employment Partner, If you choose to rely on the PCG you will BDO Automotive - non-work related use that is minor, need to be able to clearly demonstrate how infrequent and irregular you control and monitor the private use of eligible commercial vehicles. One way to do Where can the application of the exemption this is to update your company vehicle policies go wrong? so they are in line with the PCG. You should or a long-time there has been the also ensure your employees sign an annual misconception that the provision of a 1. The dual cab is principally designed to declaration declaring their usage is minor and ute (single or dual cab) to an employee carry passengers. There is a complex F infrequent and doesn’t exceed the PCG limits. is exempt from FBT, regardless of the type of calculation required to make this ute or the amount of private usage. We have determination. Other important considerations from PCG all heard the BBQ chatter where someone is 2018/3 spruiking they have traded the family sedan 2. Minor, infrequent and irregular non-work in on a dual cab ute and saved themselves related use goes beyond what the ATO The premise of the non-work related exemption thousands in Fringe Benefits Tax (FBT). This considers reasonable. is that the eligible commercial vehicles are has become more common in recent years, provided for a genuine work related purpose, The consideration of Point 1 is complicated with the significant improvements in dual cab therefore the ATO accepts there will be incidental but, basically, if the total determined passenger utes to the point where they have become the private usage. Where there isn’t a genuine work weight exceeds the remaining load capacity the number one and two best selling vehicles in related purpose or the vehicle is provided as dual cab will be subject to FBT for all private Australia. part of a salary packaging arrangement, the usage (including trips to and from work). abovementioned exemption cannot be applied, So why the misconception? While this is an important consideration there regardless of the type of vehicle. are many dual cabs on the market that meet FBT is complicated, and arguably the most As mentioned earlier, with the recent this test, so the application of Point 2 should complicated of the taxes you deal with at an improvements in dual cab utes in particular, then be carefully considered. operational level in your businesses. When we have seen an increase in the provision it comes to motor vehicles there are many of these vehicles to employees who have no complexities, starting with a question that What does ATO consider as minor, infrequent and irregular non-work related reasonable work purpose and are relying on should be simple, i.e. is a motor vehicle a ‘car’ the incidental private use exemption. for FBT purposes? travel? BDO comments Simply, the definition of a ‘car’ for FBT Until recently the ATO had provided little guidance; however, last year the ATO finalised purposes is a sedan, station wagon, panel van, Guidance from the ATO on this matter is its draft ruling and issued ATO Practical ute or similar vehicle designed to carry a load well overdue; however, they could have been Compliance Guideline PCG 2018/3, which of less than 1 tonne or fewer than 9 passengers. far more practical with the private usage confirms the following: If this is the case, the private usage of the allowances. motor vehicle is typically subject to FBT. From 1 April 2018, if private use of an eligible The ATO have stated in the PCG that if an commercial vehicle is in excess of: You will note the definition includes utes, so employer chooses to rely on the guidance, subject to the vehicle’s load carrying capacity, • a two kilometre diversion between you do not need to keep records about your you will need to consider FBT. home and work employee's use of the vehicle demonstrating that the private use of the vehicle is Are there any exemptions? • 1,000 kilometres in total for an FBT 'minor, infrequent and irregular', and the Commissioner will not devote compliance The private use of a motor vehicle is exempt year (1 April to 31 March), and where resources to review that you can access the from FBT if the following conditions can be no single return journey exceeds 200 car-related exemptions for that employee. satisfied: kilometres, Employers really need, therefore, to ensure • A vehicle that is not principally you will not be allowed to treat the vehicles as their policies and year end declarations for designed to carry passengers, and the exempt, and all private usage will be subject eligible vehicles are robust. employee’s private usage is limited to: to FBT, unless you can demonstrate under another area of the FBT legislation that the For further information or assistance with your - travel between home and work private usage is incidental. 2019 FBT return, please contact one of your local BDO Automotive advisors.

automotivedealer.com.au | MARCH 2019 | 23 FEATURES Australian Automotive Dealer Association

BUFFETT INVESTS IN SA AUTO INSURANCE

he world’s fourth largest public returns to the budget from MAC. MAC ceased writing new CTP insurance company, Berkshire Hathaway Inc., led policies from 1 July 1 2016, but has remained Tby Chairman and CEO, Warren Buffett, “Put simply, assets and liabilities from MAC responsible for managing a ‘back book’ of has invested in South Australia’s Motor will be transferred to Berkshire Hathaway’s claims issued up to and including 30 June Accident Commission. National Indemnity Company, so that all the 2016. risks of managing MAC’s liabilities will be As of January 1, Berkshire Hathaway’s transferred to Berkshire Hathaway.” The MAC Board has approved acceptance Reinsurance Division took over management of the Berkshire Hathaway bid. Berkshire of the MAC’s ‘back book’ of Compulsory Third Part of the arrangement will see $300 million Hathaway submitted to the former Labor Party (CTP) vehicle insurance claims. of the reinsurance premium retained in South government an unsolicited proposal to manage Australia for local funds management, with at the ‘MAC back book’. This bid was only valid In October last year, South Australian least $100 million retained for five years. for an off-market exclusive transaction. Treasurer, Rob Lucas, announced the SA Government would wind down the MAC, The SA Government will consider a range Treasury engaged respected financial advisory a ‘natural consequence’ of the former Labor of options to help implement a key election firm Moelis, which concluded the proposal Government’s decision in 2014 to privatise the commitment to grow local funds management was unique and presented as value for money. provision of CTP vehicle insurance in SA – activity. Moelis recommended approval for the which had been MAC’s core function. proposal. Mr Buffett said he looked forward to the “Berkshire Hathaway’s reinsurance arm, potential of growing his business in South The existing Allianz claims management National Indemnity Company, is the only Australia. contract will remain in place at least until reinsurance company in the world with the its current expiry date, 30 June 2019. “We are thrilled to have agreed terms with same AA+ credit rating as South Australia, Berkshire Hathaway will explore long-term South Australia to reinsure their auto offering SA policy claimants security over arrangements with Allianz. Claimants will liabilities, and we would love to find more future claims as well as excellent value for not experience any change in their claims opportunities to do business there,’’ he said. taxpayers, who no longer bear the risk of management experience. movements in investments and claims Berkshire Hathaway Inc. also has significant After the deal is concluded, budgeted returns outcomes,” Mr Lucas said. worldwide interests in energy, utilities, from MAC to the budget will reduce by up to infrastructure, rail, retail and manufacture. “For example, this year’s Mid-Year Budget an estimated $68 million over the three-year Review will include a significant reduction in period from 2019-20.

24 | MARCH 2019 | automotivedealer.com.au FEATURES Australian Automotive Dealer Association

SALES CONSULTANTS CAN DO BETTER: JD POWER SURVEY

early one in five new vehicle buyers in 10 minutes or less on the road. Study rankings Australia indicate the sales consultant Customers experiencing a test drive Nonly partially understands their needs lasting 31 minutes or longer (12 per Among the 11 mass market brands ranked in when buying a new vehicle, according to the cent) are more satisfied than those the study, Holden and Mazda ranked equal J.D. Power 2018 Australia Sales Satisfaction who experience 10 minutes or less on highest with a score of 822. Toyota was third Index (SSI) Study, released in January. the road (821 vs 807, respectively, on a with a score of 815, followed by Nissan (804) 1,000-point scale). and Ford (802). A further 17 per cent of customers criticised sales consultants for not asking about their • Sales consultants still pressuring BMW ranked highest in sales satisfaction preferences when buying a new vehicle. customers to buy: The study found among luxury brands, with a score of 861. Audi The same proportion of first-time buyers that younger shoppers (39 years old or was second with a score of 836, while Mercedes- experienced the same. younger) and first-time new car buyers Benz ranked third with a score of 814. experience higher levels of pressure The 2018 Australia Sales Satisfaction Index “Given the slowdown in sales, it is essential from the Dealer to purchase a new (SSI) Study measured satisfaction with the that sales consultants spend the required time vehicle (35 per cent and 24 per cent, sales experience among new vehicle buyers. with each shopper to identify the best model respectively). and variant for their requirements,” said Bruce Buyer satisfaction was based on six measures: Chellingworth, Director & Country Manager • Delivery of a new vehicle not celebrated Dealer sales consultant; delivery process; – Australia at J.D. Power. with the customer: A new car is a dealership facility; working out the deal; major purchase for the vast majority paperwork completion and dealership website. “Simply ‘pushing metal’ won’t help the of consumers, but only 56 per cent of The study was based on responses from 3,075 dealership gain positive referral, ensure customers recall any special ceremony buyers who purchased or leased their new vehicle customer loyalty or promote the brand. In taking place during handover. between March 2017 through January 2019. an increasingly competitive market, it is Providing acknowledgement via a The study is a comprehensive analysis of the imperative Dealers understand and build trust special ceremony not only enhanced new-vehicle purchase experience and measures with their customers.” sales satisfaction scores compared with customer satisfaction with the selling Dealer instances when no ceremony takes Other key findings: (satisfaction among buyers). The study was place (827 versus 779, respectively), fielded from March 2018 through January 2019. • Test drives are typically too short: but also increased the proportion While more than four in five customers of customers who “definitely will” The study now also includes the Net Promoter chose to take a test drive, half spend recommend the selling dealership to Score, which measures new vehicle owners’ only 20 minutes or less in the vehicle, friends and family (70 per cent versus likelihood to recommend their vehicle brand with 19 per cent experiencing only 54 per cent, respectively). on a 0-10 point-scale.

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As many Dealers will attest, there is a massive two-week hands-on passing of the torch nor a Brooke Samples leadership shortage and, as you know, six-week classroom course. leadership is your competitive advantage. President, As the Baby Boomers who hold (or held) It’s not just managers. Look at your senior Profit Blueprints, managerial roles retire, dealerships scramble technicians, body men, painters, countermen, LLC to fill those positions, hoping to get it right the accounting staff, etc. Can you just place an ad first time. on seek.com and hope to pluck someone away from another dealership? Nope! We need a I regularly speak with managers who get in plan. Lloyd Schiller before sunrise just to get the paperwork done Already, because the technician shortage is Fixed Operations so they can spend time with their staff and so severe, many dealerships have started to Consultant customers during the dealership’s operating hours. grow their own technicians with an in-house training program. We should be doing the Life is okay…until we start to look for our same for our other key positions. n the latest of our series, thanks to ‘successors’. Look at your dealership; how legendary service advisor trainer, Lloyd many managers at your store will retire in 10 What to look for in your successor ISchiller of LloydSchiller.com and Brooke years or less? Do you have a plan to replace Look at your current employees. Are there Samples of Profit Blueprints, Brooke looks at their knowledge, integrity and commitment? certain ones to whom other employees look the importance of developing leaders from When they do finally retire they will take up or go to for help? You probably have some within. with them 30-plus years of experience. This employees who don’t have the title of manager, is experience you can’t teach – neither in a but are seen as a leader by their peers.

automotivedealer.com.au | MARCH 2019 | 27 FEATURES Australian Automotive Dealer Association

In my opinion, someone who played sports in problem-solving and working with others After Frito-Lay invested in creativity training high school has an advantage. Just as I would with diverse interests. Some potential sessions for their employees, they attributed rather have a salesman who played sports (he teams: more than $100 million in cost savings to the or she understands when you lose you don’t programs. Sysco Corporation (food services) give up – you just keep trying), I would want - Website Review Team (spend time reports that employees who participated in a leader who doesn’t crumble when things go checking out the competition’s websites creativity training increased their sales by an sideways. and see how yours can be improved) average 25 to 30 per cent.

I also believe someone who learned to play a - Go Green Team (spend time looking at According to Jeff Mauzy of Synetics, a musical instrument has learned perseverance. ways to reuse/reduce/recycle) consulting firm specialising in business Both athletes and musicians have learned self- creativity, “Creativity pays financially and with - Customer Experience Team (spend time confidence – an important trait for a leader. a rich array of other rewards: employee and enhancing the customers’ experiences). customer satisfaction, incremental growth, Along with team involvement, your I thought I would be the last person to say the flexibility to match relentless change, the future leaders could sit in on potential “hire support staff.” My background as a ability to attract good talent, and strengthened employee interviews. He or she can controller says “keep your expenses low – competitive readiness.” you don’t need a secretary” (okay, “personal learn from observation and possibly assistant”). So just like you, I was trying to provide you with additional insight for To find out what your creativity score is, check hold expenses down while we regrew our a prospective employee. Think of other out: www.edu-nova.com/apps/creativity.html. businesses. But the unexpected negative ways to involve your up and coming consequences are huge. Just like a technician leaders in processes that impact the Exercises to boost problem-solving skills training program is an expense initially, hiring dealership. • Make mental connections to strengthen and training support staff is an investment in 2. Have a mentoring program where the your capacity for creativity: Fill in the the future. Assistants hired to do busy work protégés have a designated mentor who blank with a different word every day. or lower priority tasks for managers can free answers questions and provides guidance. “My customers are like ______,” up time for managers to groom talented Start with a short-term program – six then explain why. For example: “My successors or coach someone who can help months at the most – to accomplish set customers are like icebergs.” The next grow the business today. goals. day “My customers are like oranges." If you have someone in your department You get the idea - you are building your 3. Improve their communication skills. whom you think might make a good leader Creative Quotient. The more creative Encourage your future leaders to join someday, start working with him or her now. you are the better problem-solver you a Toastmasters club or other form of Your involvement is the key to developing the will be. public speaking, and pay the inexpensive next generation of leaders. Tomorrow’s leaders membership dues for them. Excellent • Before you start looking for a solution who possess the ability to solve problems and communication skills can help make an to a problem, relax your mind and create results will be the winners in an ever- excellent leader. This is an easily affordable answer the question “How could I make changing society. program for developing communication this worse?” For example: “How can I Below are ways to start grooming a future and leadership skills (www.Toastmasters. make my vehicle delivery experience leader once you have found a person you want org.au). worse?” to invest in: 4. Find ways to train all your employees to • Imagine your problem was solved; now 1. Get him or her involved in the dealership, strengthen their ‘creativity’ muscle. Solving work backward to where you are now. not just focusing on his or her job. One problems is accomplished with an open This could help you skip some bad steps way to do this is to have teams. (I used mind, the right amount of information when you implement your solution. to call them committees, but millennials and the ability to develop new solutions. Ralph Nader said, “The function of leadership prefer ‘teams’.) Think safety committees. Just like a couch potato couldn’t jump up is to produce more leaders, not more Your teams would typically be comprised and run a marathon, if you haven’t been followers.” Take the quote to heart and start of employees from different departments. thinking creatively you have to train your today. It’s not easy and it’s not a short-term The frequency of the team meetings would mind with ongoing exercises. Creativity project – but the results will keep your depend on the purpose. These teams allow programs pay off big – not just for leaders, department and dealership thriving while members to be involved in the dealership but for your dealership in general. other are struggling. (And then you can retire!) but also practice leadership skills like

28 | MARCH 2019 | automotivedealer.com.au MOTORSPORT Australian Automotive Dealer Association SUPERCARS 2019 SEASON OPENS WITH PLENTY OF CHANGES

Below we note the changes or lack thereof that Driver/team shuffles have attracted attention over the pre-season, together with my opinion and rating of these Mark Winterbottom moves from Tickford John Crennan changes. to the Schwerkolt team. Winterbottom is a Motorsport Contributor proven talent who won the Championship Cars only four seasons ago. It’s difficult to fathom why Mark would jump from a team with Undoubtedly the No.1 change and the above-average credentials to a team with How many will be home runs? genuinely big story off-season (which will below-average credentials (last four years’ continue to be the case all season) is the placings: 14, 24, 16, 21) and a small one-car ike each one of Australia’s top 10 elite introduction of the Ford Mustang. The outfit. Either Mark feels somethings is adrift sports whose performances receive entire sport will hold its breath when the six at Tickford or Charlie has sold him one of his constant scrutiny from their fan base L Mustangs fire up in Adelaide. If they are on off-season dreams. Rating in terms of Marks and the media, Supercars, like the rest, always the money from the outset it will be a huge career and impact for the sport ‘4’ = high provides an abundance of change over the boost for the sport, or even if not, the interest risk. off-season break. throughout 2019 will still be high, tracking how they can improve and finish the year. The Lee Holdsworth moves to Tickford. While Some changes pre-season will appear logical excitement and hype of Mustang joining the this team has a lot more to offer than his old and strategic and some, of course, will create sport makes the entry of Nissan Altima and team, the big question is, does Lee have any big question marks and appear like marriages Volvo pale in comparison. Mustang’s 2019 more in him than his past four terrible years of convenience. But it’s not until midway impact rating: ‘‘10’’ = brilliant. indicate. At 36 years of age, his career is on the through the season that we can validate our line. He needs to let his driving do the talking hunches on whether such changes have been The two fewer cars on the grid this year (24 rather than his excessive pre-season hype. for better or worse. versus 26 last year) is not a good look for the Rating in terms of will this be a big deal for series by any assessment standard. Rating ‘‘5’’ In motor sport the performance predictability the sport ‘4’ = a winner or a fizzer? = concerning. of the driver is generally an easy call: most Richie Stanaway. His appointment at GRM often the star drivers of the prior season carry Driver ins and outs really registers on my radar. There is some over their starring role, the middle field drivers X factor/mean machine about this driver, continue to toil midfield, and the tailenders Those drivers exiting the sport as full-time and despite last year’s results and the stories continue in that zone. Has anything significant drivers this year with a respective rating on the about his ‘attitude’ at Tickford, I always say occurred off-season that may change the 2018 potential to rock and shake the sport are: the harder they are to manage the more talent results where the top four drivers took 85% of Craig Lowndes, ‘10’ = profound they normally possess, with the key being a the 30 chequered flags? Don’t believe so, but boss/coach who knows how get the best out of hope so! Garth Tander ‘7 ’= medium ‘different’ athletes. Rating ‘9’ = for the sport It can be a big struggle breaking into the Michael Caruso ‘5 ’= medium rare as we need more talented ‘take no prisoners’ drivers in the ranks. With the brilliance and top 10 driver results. A lot has to do with Blanchard ‘2’ = underdone. the technical capability and budget of the experience of engineer, Richard Hollway, in team they drive for – but experience shows These ratings place considerable emphasis his corner, maybe its standby time for an all- either a rookie or an established driver in a on my opinion re: the brand power of these new Richie in 2019. lesser-reputation team can always exhibit drivers and their entertainment asset value in Of the 24 cars/drivers contesting the raw talent and a gifted flair if it’s there. Scott putting bums on seats at race events. Championship this year there are seven driver McLaughlin, for example, in his first year at and/or team changes – or a 30% shuffle-up – GRM was 10th in a team whose prior results Drivers new to the sport this year are hard on the grid, which would have to be rated as were only average, and Craig Lowndes won to evaluate as first year rookies, however the not ideal for the series with fan confusion. This the Championship in 1996,his first year, social media platforms and other barometers number does not include the two fewer cars immediately after HRT’s shocker 1995. of talent assessment are certainly not lighting up with excitement for Macaulay Jones at 24 on the grid. Whilst the cars and drivers are the reason why years of age or Garry Jacobson at 27, however the fans attend or view the sport, there are we all hope they will spring some surprises for many other behind-the-scenes components. the sport.

automotivedealer.com.au | MARCH 2019 | 29 MOTORSPORT Australian Automotive Dealer Association

Scott Mc Laughlin celebrating his Championship win after last year’s Newcastle event and widely tipped to go back-to-back

Sponsors Mega-Mobil co-share sponsorship a rating Additionally, I have an alarm system that ‘7’. It’s hardly a commentator’s dream getting always flashes when technical guys like Adrian Boost Mobiles from Walkinshaw to GRM. their tongues around ‘Walkinshaw Andretti Burgess have a penchant for the TV cameras. Great move for Garry Rogers to pick up Boost United Mobil 1 Mega Racing’, or WAUM1MR, Let’s hope these guys can lift the bar and take after Wilson’s withdrawal. Rating ‘9’ = Peter but then we also have DJRTP Shell V Power the sport to another level but my rating is ‘5’. Adderton will ensure the marketing meter is Racing! Why could the series not recruit an external, turned on full blast. However, does a future all-new senior technical talent and introduce a bestseller await the sport, with some great Rabble Club with Kellys and Truck Assist fresh set of eyes and brain power for the sport, accidental entertainment this year flowing with Tekno Racing are the other full livery and at the same time break up the some of the from a ‘personality cocktail’ of sponsor of primary sponsors; however with no intel as to old mates’ clubs. At the other end of the scale, Adderton’s ego and perfection-drive, mixed how these deals work it’s difficult to provide a some carry over grudges that are inevitable with the quirky, no-nonsense, ‘it’s my way meaningful rating. with constant job-hoppers. or the highway’ style of team owner Garry Rogers. Penrite have doubled their exposure with the The change on the Supercars commission Erebus team and now have both cars identical representation that took place late last season Irwin Tools. Good to see them back in, as they in appearance, with the end result being a very will produce strong benefits this season. The know the business and should make it work exciting and professional look for this team. replacement of Barry Rogers by DJRTP boss, for them and add value to the sport. Rating: ‘7’ Great for the sport and great for the team: Ryan Story, is an inspired move. Ryan’s 10 = positive and excellent livery presentation. Rating: ‘10’. years’ experience in running a race team, coupled with his various specialist Master’s Mega replaces Boost as co-naming rights The Series (Supercars) degrees, is a very significant step for the sport. sponsor of WAU. It’s difficult to understand Rating: ‘10’. What is needed now is to also get this one, given speculation on the past The only major change here appears to be this high-IQ, well-qualified strategic thinking Mega deal with Tickford, and also hard the replacement of David Stuart as Chief talent on the Supercars board at the earliest to understand the Mega Fuels/Mobil Technical Officer by two new senior executives opportunity. alignment, however this may unfold as in Adrian Burgess and Campbell Little. At a time when cost containment is so critical, one sponsor activations kick in. WAU, with its Media big-name international ownership, seems in is left pondering why two people are needed a rut commercially and needs to bring some to do the job previously done by one. Little’s Despite the fan outcry surrounding Russell heavyweight company brand names to the constant job-bouncing around seven different Ingall being fired, there can be no doubt there sport. Compare the quantity and quality teams worries me; likewise Burgess and his was some very strategic thinking behind Fox of WAU’s business partners with the other association with four teams over about 10 dumping the 55-year-old from their ranks in internationally-owned team, DJR Team years. It is not what I would be looking for in favour of a much younger Craig Lowndes, Penske. such a vital role.

30 | MARCH 2019 | automotivedealer.com.au who will also bring more racer currency to Other ‘interesting’ snippets have a considerably higher content of under the commentary team. I give this move a 27-year-old drivers? There’s a good chance it rating ‘9’ for the sport with one proviso: that Triple Eight must be awarded a ‘10’ rating is a money thing, where many teams cannot Craig’s comments are short and sharp and for their 2019 Enduro driver line-up. These afford the salaries of experienced drivers, his giggling even shorter. appointments could play a very big part in the and sign young drivers who can bring Championship outcome. sponsorship. A younger driver profile for Channel 10 aired their first RPM last Sunday the sport will always be a rating ‘10’, but In 2012 – only five seasons ago – only six, or and announced at the same time Matt White if it’s at the expense of racing quality and 21%, of the main game drivers were 27 years would be supported by Kate Peck, Garth competitiveness then it’s a rating ‘3’. Tander and Michael Caruso. The first show of age or under. This year there are 11 drivers was a super-lightweight effort and reflected under 27, or 46% of the field. The oldest driver One thing seemed to be missing in all the the media inexperience of Tander and Caruso. seven years ago was Russell Ingall, then 48, off-season news and changes, and that was It all looked rushed together with some poor and this year the oldest will be James Courtney any report of fresh new business talent attempts at humour by Peck that seemed to at 38. It’s fair to think the days of a driver in being recruited into the sport at CEO/Team disrupt the flow. Rating ‘5’ as long as RPM Supercars competing full-time at 40 are over. Principal level or in the Engineering and go with a panel of four. They should consider Marketing ranks of either the series or the On one hand it is fantastic the sport has a replacing one of the two drivers with a teams. This needs to be a priority for the younger driver profile, provided the show is hardnosed specialist motor sport journalist. sport – to replace the personnel regurgitation not weakened by inexperience, crashes and process so entrenched in this small less competitive times. Why today do we competitive industry.

THE NUMBERS GAME Crennan’s predictions for 2019 Championship top 15 placings

Position Past 4 Year's Prediction Driver Car Position 1 Scott McLaughlin Mustang 8, 3, 2, 1 2 Jamie Whincup Commodore 5, 2, 1, 3 3 Chaz Mostert Mustang 11, 7, 5, 6 4 Shane van Gisbergen Commodore 4, 1, 4, 2 5 David Reynolds Commodore 3, 16, 7, 5 6 Fabian Coulthard Mustang 7, 12, 3, 9 7 Scott Pye Commodore 19, 15, 12, 7 8 Anton de Pasquale Commodore -, -, -, 20 9 Rick Kelly Altima 9, 14, 13, 8 10 Tim Slade Commodore 13, 8, 11, 11 11 Mark Winterbottom Commodore 1, 6, 6, 12 12 Richie Stanaway Commodore -, -, -, 25 13 Cam Waters Mustang -, 19, 8, 16 14 Jack le Brocq Commodore -, -, -, 19 15 Nick Percat Commodore 22, 18, 19, 10

automotivedealer.com.au | MARCH 2019 | 31 FEATURES Australian Automotive Dealer Association

WHY INDEPENDENT DEALERS NEED AN AUTOMOTIVE CRM

Lead Management lead within one hour were seven times more likely to qualify them and 60 times more likely Zach Klempf New leads come in from various sources: third than those who waited over 24 hours. CEO, party sites like Cars.com, social media, your Selly Automotive website form and walk-ins. Many principles But most principles and sales managers can’t and sales managers simply use their email just drop what they are doing to respond to a inbox – or worse, pen and paper – to track new lead. That’s where an automotive CRM new potential customers. This causes missed can make a massive impact. ndependent Dealers wear so many hats opportunities and misplaced information. that it’s hard to keep track. You are the Many CRMs have auto-response features that Isalesperson, the accountant, the detailer, the Dealerships need a way to track new leads allow you to reply to a new lead instantly. Some customer service rep, the F&I desk, and even and store them in one place. This is the CRM’s even let you customise the message the marketing manager. fundamental purpose of an automotive CRM. based on the lead’s information. For example, Whether you get two leads a day or 200, every your auto-reply could say, “Hi Ben, Thanks for This means that important tasks can fall dealership needs a lead management tool inquiring about the 2015 Toyota Tundra. A through the cracks, like lead management. to maximise their opportunities with new salesperson will give you a call soon.” customers. Every dealership needs a systemised and Your local dealership market is highly repeatable sales program. Large franchise Using a CRM successfully requires a competitive. The difference between making dealerships do this regularly, but many commitment to entering customer data a sale and losing out to a competitor could independent and BHPH Dealers feel like they and keeping it updated. Some CRMs offer simply be how quickly you respond to a new are too small. tools, such as a mobile license scanner, that lead. Automotive CRMs let you automate this automatically import a customer’s information. process so you are first to respond every time. Why? Because the tools that are required to Data entry might seem like a hassle at first, but run a systemised sales program – namely, an it makes each customer interaction easier and Streamline Communication automotive CRM platform – are too expensive your sales will benefit because of it. and too clunky for a smaller operation. So much of the sales process today happens Auto-Responses to New Leads before a customer arrives at the dealership. Luckily, there are new CRM tools (short for This makes communication with the customer ‘customer relationship management’) designed In today’s internet-driven world, the casual more important than ever. CRMs help you specifically for small and independent window shopper who calls your dealership keep track of all customer conversations, dealerships. Using a CRM can have a major or walks onto your lot is all but extinct. The whether they happen via call, text, or email. impact on your bottom line, and might even research phase of the car-buying process is help you let go of a few hats. now done online. When a potential customer Look for an automotive CRM that has these does reach out, they are ready to buy. features: There are four main reasons why automotive CRMs help independent and BHPH Dealerships need to act fast to take advantage Texting Platform dealerships boost sales. Let’s get into them. of a new lead. According to a Harvard Business Texting is a great way to communicate with Review study, salespeople who contacted a customers, especially millennials. Studies have

32 | MARCH 2019 | automotivedealer.com.au found that 98% of millennials read all of their texts, but only 22% read all of their emails. Texting through your CRM platform ensures all communication with a customer stays within the company, especially in the case of a salesperson leaving. The texting platform will also keep you TCPA compliant.

Call management

Even with texting and emails in the mix, phone calls are still the most common way we connect with customers. They are also pivotal touchpoints when building a relationship with a customer. Some automotive CRMs allow you to record each phone call for quality assurance and training purposes. In the event of a dispute, these calls also serve as the record of truth for fast resolution.

Email

Emails can easily get lost in the shuffle. Your CRM system will not only keep your email organized, but will connect each message to a customer’s profile so you have an accurate But nurturing leads should not stop once new CRM tool for at least 90 days before thread of communication. you make a sale. Post-sale lead nurturing is you expect to see results. If you’re like most just as important as pre-sale. For example, successful dealerships, you will start to wonder Lead Nurturing you can schedule follow-ups to check in with how you ever survived without a CRM in A successful sale does not happen all at once. It customers a day, week, and month after their place. is made up of numerous interactions, from the purchase. Getting Started with Your Automotive CRM time a customer visits your website to the time Existing customers are far more likely to buy they purchase their first vehicle. As a principle from you again than new leads. Post-sale lead If you are ready to put down those hats and or sales manager, you need to ensure these nurturing turns one-time buyers into lifelong start growing your dealership, then a CRM interactions go perfectly for every customer, customers. This level of organisation in your is a critical step in the right direction. An every time. sales program is only possible with a CRM automotive CRM will help you and your sales team wow customers with fast service Lead nurturing can make a huge difference platform. and thoughtful follow-ups. It will keep your in your sales numbers. Strategic found that Implementing a CRM customer data organised and your salespeople nurtured leads increased sales opportunities compliant. Most importantly, it will drastically by 20% compared to non-nurtured leads. Ask An automotive CRM is not a magic bullet. You improve your sales. yourself: What would your business look like if will not see results overnight. CRMs provide you increased sales by 20%? a framework to organise and run your sales Every dealership will benefit from using a program, but doing so will require buy-in CRM, but not every CRM is built for every CRMs systemise the relationship-building from your entire team. dealership. Most CRMs are built for large activities we all know are so important. It franchise dealerships. Independent and makes the job easier for salespeople and Success with your new CRM is directly BHPH dealerships have unique needs, so it’s creates a consistent experience for your connected to the effort you put into using it. important to find a CRM built for you. customers. Your sales team must commit to using the tool to track all leads and communication. As Zach Klempf is the Founder and CEO of San For example, you can create a task that a manager, you must set up the proper lead Francisco-based automotive vertical SaaS company, automatically reminds salespeople to follow nurturing workflows and ensure your team Selly Automotive. Zach started out working in up with a lead if they don’t respond after two follows them. automotive retail at 19 years of age and has since days. After a lead leaves your dealership, the then extablished himself as a thought leader in the salesperson will get another reminder to send Getting used to the new system will take automotive space. a text message thanking them for their time. everyone some time. Commit to using your

automotivedealer.com.au | MARCH 2019 | 33 FEATURES Australian Automotive Dealer Association

AUTO INDUSTRY’S TAKATA WEBSITE LEADS TO 1 MILLION AIRBAG REPLACEMENTS

he Federal Chamber of Automotive Industries (FCAI) has revealed that Tmore than one million vehicles have been identified as carrying faulty Takata airbags through the industry website, www.ismyairbagsafe.com.au.

The website was launched by the FCAI in 2018 to help Australian consumers identify whether their vehicles are fitted with the faulty airbags – and since launch, more than 6.4 million vehicles have been checked on the site.

Six million visits

Australians have now made more than 6.4 million vehicle checks on the recall website. The FCAI has also announced the addition A faulty Takata airbag has the potential to “This is an excellent response to a major public safety campaign,” FCAI Chief Executive, Tony to the home page of the website of a range of seriously injure, or even kill, vehicle drivers languages other than English. and passengers. Weber, said. “There has been an average of more than In a bid to enhance the community reach of The website was developed for the Federal the program, the website has been modified Chamber of Automotive Industries in 32,000 vehicle checks made every day since the website was launched six months ago.” to offer clearer accessibility for non-English response to a compulsory national recall called speaking users. It now includes information by the Australian Government. Its launch has Mr Weber said the industry had completed in a range of languages, including Arabic, been supported by an extensive “Don’t Die rectification of nearly two-thirds of the three Bahasa Indonesian, Chinese (Simplified Wondering” national advertising campaign million vehicles that are affected by the and Traditional), Vietnamese, Farsi, Korean, including television, press, radio, cinema, national recall. Spanish, Dari and Hindi. outdoor billboards and social media.

34 | MARCH 2019 | automotivedealer.com.au FEATURES Australian Automotive Dealer Association

MORE THAN 87,000 NEW VEHICLE SALES IN FEBRUARY

he Federal Chamber of Automotive Ranger with 3,377 sales and the Mitsubishi During January, the top three brands were Industries (FCAI) has reported sales of Triton with 3,155 sales – supported the Toyota leading the market with 19.5 per cent T87,102 new vehicles during the month of increase in the light commercial vehicle market share and 15,961 sales, followed by February 2019. This represents a decrease of market. Mazda in second place with 11.6 per cent 9.3 per cent on the same period last year, but market share and 9,490 sales. In third place is 6,000 more sales than in January. The top selling passenger vehicle was the was Mitsubishi with 8.1 per cent market share Mazda 3, with 2,655 sales during the month. and 6,669 sales. On a year-to-date basis, the industry reported 169,096 sales, or a decrease of 8.4 per cent over January 2019 signalled a cautious start to Key Points: the same period in 2018. the year for new vehicle sales in Australia, according to results released by the motor The January 2019 market of 81,994 new Tony Weber, CEO of the Federal Chamber of industry’s statistical service, VFACTS. A total vehicle sales is a decrease of 6,557 vehicle Automotive Industries (FCAI), attributed the of 81,994 new vehicles were sold during the sales or -7.4% on January 2018 (88,551) results to lower levels of consumer confidence. month, down 7.4 per cent on the same period vehicle sales. January 2019 (25) had the same in 2018. number of selling days as January 2018 and “Given the current challenging economic this resulted in a decrease of 262.3 vehicle sales conditions, including a downturn in the “The current economic environment is a per day. housing market, the automotive industry is challenging one, with an imminent federal not surprised by the slower start to the year,” election, a declining real estate market and The Passenger Vehicle Market is down by he said. tighter lending practices,” Mr Weber said. 3,810 vehicle sales (-12.0%) over the same month last year; the Sports Utility Market is The light commercial vehicle market is the “However, Australia’s love affair with SUVs down by 1,949 vehicle sales (-5.1%); the Light only segment that reported an increase continues. January was a solid sales period for Commercial Market is down by 967 vehicle during February, with an upswing of 6.0 per these vehicles, with the segment claiming 43.8 sales (-5.8%); and the Heavy Commercial cent. Other segments showed a decline: the per of total market sales. Vehicle Market is up by 169 vehicle sales passenger vehicle market decreased by 21.3 (8.3%) versus January 2018. per cent and the sports utility market fell 6.3 “Passenger sales were strong in the small car per cent versus February 2018. segment, with the Mazda 3, Toyota Corolla Toyota was market leader in January, followed and Hyundai i30 leading the pack.” by Mazda and Mitsubishi. Toyota led Mazda The three top selling vehicles in the market – with a margin of 6,471 vehicle sales and 7.9 the Toyota Hi-Lux with 4,431 sales, the Ford market share points.

automotivedealer.com.au | MARCH 2019 | 35 FEATURES Australian Automotive Dealer Association WHY YOU MUST TEXT YOUR CUSTOMERS

etting your message out to existing and potential customers is always a battle. GPamphlets can be thrown straight in the recycling bin, TV and radio commercials can be ignored, emails unopened.

But there is one method of marketing that has been shown to have an almost flawless success rate in at least having your message seen: text messaging.

Research shows that marketing emails are opened at a rate of between 20 and 30 per cent, whereas recipients open text messages 98 per cent of the time.

As with any marketing, you don’t want to bombard your intended targets; however, timely reminders that their car is due for a service can increase sales and build customer loyalty. Including your phone number makes it easy for them to call and book an appointment while you have their attention.

When combined with an intelligent email marketing campaign and social media interaction, you have a holistic approach that results in what the marketing experts call ‘nurtured leads’: customers with whom you maintain a relationship from pre-sale right through the life of the vehicle, i.e. a Dealer’s dream.

Marketing technology analyst and author, people already determined to be marketing leads. In order to encourage customers to opt- David Raab, says nurtured leads have a 23 per qualified leads. That includes current in to receiving text messages, you could offer cent shorter sales cycle than non-nurtured customers. free gifts or incentives such as test drives or leads. Email has long been the preferred discounts on accessories. method of nurturing leads, but with Deloitte Messages can take the form of service research showing 88 per cent of Australians reminders or information about new SMS marketing is a beneficial promotional now own a smartphone, the cut-through and promotions and products. The key is that it tool that allows you to reach current and immediacy of text message marketing cannot needs to be relevant to the recipient, or they potential drivers with the sending of a be matched. will unsubscribe. Organise your leads into simple text message. Not only do you have lists – for example, those who have shown the opportunity to let your base know about Over 90 per cent of text messages are read interest in used cars, or want to be kept up-to- upcoming deals or sales, but you can use text within the first three minutes of being date regarding new models, or would like to message marketing to get your name out there, received. Making use of automated marketing be notified of sales and specials. Aftermarket increasing brand awareness while making services allows you to easily create your own promotions could be targeted to customers people aware of your dealership. An SMS SMS marketing campaigns. who enjoy kitting their cars out with the campaign can also invite people to text the latest accessories. A specific, personalised dealership, or offer a helpful service such as car How to use text message marketing text informing them of something they have maintenance tips. Everyone hates a cold call, and that applies expressed an interest in is far more likely to The numbers don’t lie. With such a high rate equally to cold texting. You will not get hold their attention and lead to action. of success in being seen by customers, text anywhere attempting to generate new leads Another crucial ingredient in the success of message marketing should be an essential part via texting. You should, instead, target those any marketing campaign is generating the of any marketing campaign.

36 | MARCH 2019 | automotivedealer.com.au FEATURES Australian Automotive Dealer Association

HARLEY GOES ELECTRIC

t’s the ultimate symbol of rebel cool: the mid-teens could be a possible kWh rating for Two easy ways to charge mighty roar and iconic styling of the the LiveWire, considering it is likely a slightly IHarley-Davidson Motorcycle. heavier bike. Use the onboard Level 1 charger and power cord to connect to any standard household But times they are a’changin’. The LiveWire sports a 0-60 mph time of 3.5 outlet and get a full charge overnight. For a seconds – a bit quicker than a Zero SR as well. faster charge, visit any public Level 3 DC Fast In January, at CES 2019 in Las Vegas, Harley- The Zero SR features a 52 kW motor, so the Charge station for 80% charge in 40 minutes Davidson unveiled its LiveWire electric LiveWire may be packing a little more power. or 100% charge in an hour. motorcycle, as well as two new electric two- wheelers. Another feature Harley-Davidson is keen to Advanced riding technology system demonstrate is the highly connected nature Details about the mechanical tech specs of of the bike. The company developed a suite The LiveWire model is equipped with an the LiveWire have been emerging for months. of connected services enabled by an LTE- Electronic Chassis Control (ECC) system. The These include high quality Brembo brakes, connected Telematics Control Unit hidden separate functions of ECC work together to fully adjustable Showa suspension, Michelin under the bike’s seat. The unit enables a rider’s give the rider more confidence and control sport tires, cornering-enhanced anti-lock smartphone to access everything from remote in less-than-ideal situations. The ECC system brakes, traction control, etc. It’s a premium status checks, battery charging status and manages cornering-enhanced Anti-lock bike for a premium customer. time to completion, trip planning, theft or Braking System (ABS), Traction Control vandalism notification, GPS tracking, service System (TCS) and Drag-Torque Slip Control The price is premium too, set at US$29,799 – reminders, diagnostics and more. System (DSCS), and in some situations or A$42,132 at current exchange rates. provides a stability control function by According to the company: “This technology modulating torque available at the rear wheel. Harley-Davidson has opened up pre-orders, makes the LiveWire motorcycle the first North It combines electronic controls and hydraulics with deliveries planned for the American American mass market cellular-connected where required, utilising the latest six-axis Autumn and an Australian release pencilled in electric motorcycle.” inertial measurement unit (IMU) and ABS for 2020. sensor technology. Harley-Davidson CEO, Matt Levatich, says: As far as performance goes, the LiveWire’s “We’re at a historic juncture of the evolution Two new electric motorbike prototypes estimated all-electric range will cover of transportation, and Harley-Davidson is at approximately 110 miles (177 km) of mixed the forefront. Innovation that moves the body Harley-Davidson also used the occasion to city/highway riding. and soul has always been at the heart of our show off concept art for four new electric vehicles planned as part of the More Roads The closest comparable electric motorcycle brand, and this next chapter in our history is to Harley-Davidson plan unveiled last year. on the market is probably the Zero SR, which about creating products and opportunities for The new models include a lightweight electric offers a 120 mile (193 km) mixed city/highway existing and aspiring riders of all ages and in motorcycle, an electric moped, an electric dirt range with a 14.4 kWh pack. So the low to all walks of life.” bike and an electric bicycle.

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