Archives: Dealer Bulletins

Join us for an exclusive Dealer briefing on the Government’s proposed New Vehicle Efficiency Standard.

Learn about the Government’s proposed new vehicle efficiency standard, and how it is poised to impact the automotive industry in Australia. The Government is seeking to catch up to the United States and we will hear from Barbara Kiss, a distinguished former automotive regulatory executive who helped design and implement a number of fuel efficiency policies in the US. Barbara will join AADA CEO, James Voortman, and MTAA CEO, Matt Hobbs, to provide Dealers and other interested parties with invaluable insights from the US market along with the potential implications, challenges, and opportunities these standards will bring for Australian new car Dealers.

Date: Friday 8 March 2024
Time: 11:00am (AEDT)
Presenters: Featuring Barbara Kiss alongside AADA CEO James Voortman and MTAA CEO Matt Hobbs.

Register:

Don’t miss the chance to deep dive into the standard, and gain insights from the US market and lessons learned there. Register now to secure your spot at this essential industry briefing!

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This is a reminder bulletin following on from the initial notification of changes in October 2023, with implementation and the billing process to commence in March.

Historically, membership of the AADA has occurred through the approval of Dealer Councils and line group representative bodies that come together under the AMDC banner. Recently several new brands have arrived in Australia, some of which are experiencing rapid sales growth thanks to strong Dealer support, but they are doing so without the guidance of Dealer Councils or advisory groups, which to date, have not been formed for these networks. While many Dealers are AADA members by virtue of them being multi-franchised, they are not members for the non-participating brands they sell, and this is something the AADA Board have instructed us to address.

It is our strong belief that every franchise network should have a Dealer Council or similar body to represent their interests directly to their franchisor. For those who do not have a council, the AADA secretariat has a standing offer to assist in the establishment and operation of one and we would encourage all Dealers representing these brands to take up the offer.

In the absence of a council however, we would like to enlist Dealers of brands selling more than 1,000 units annually to join the AADA and commence financial contributions, based on a fee per car sold.

To achieve this, we will commence sending to Dealers who sell one of these brands, a request for a report of units sold over the previous three-month period. From this number, we will generate and send an invoice for the AADA membership fee, the same as that of participating brands.

Like our current membership fee arrangements, this subscription model is based on the goodwill and honesty of our members. We are hopeful that Dealers see the value in AADA membership and recognise that AADA is deserving of their full support, including for those volume brands whose Dealers receive the benefit of the AADA advocacy work but who are not currently contributing financially.

The first invoice will be issued in March 2024 for the preceding three-month period and thereafter continue at quarterly intervals.

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The January used car sales figures have been released today in the first monthly edition of the Automotive Insights Report (AIR) for 2024.

The January 2024 AIR shows that the average time taken to sell a used car decreased slightly this month with consumers starting the year off strongly.

Despite the continued tightening in cost-of-living pressures, customers increased their purchases of used cars in January with an increase of 7.3 per cent in cars sold compared to December 2023.

Petrol and diesel cars accounted for 96 per cent of used cars sold, with hybrid sales increasing by 2.7 per cent this month. The market for used EVs and PHEVs sales decreased in January, and it is predicted that the market will likely remain volatile month-to-month for some time.

The Automotive Insights Report shows that in January:

• Across Australia 282,713 vehicles were listed for sale and in that period 181,612 were sold.
• The data shows that the overwhelming majority of used cars being bought and sold have petrol or diesel engines.
• The used market for electrified power trains remains volatile with EVs and PHEVs seeing a 9.4 per cent and 4.5 per cent decrease in sales respectively from the previous month.
• The average time to sell a used car is 47.7 days which is a slight reduction from the previous month.
• Retained values held mostly steady after some recent declines and the record highs of previous years.
• Some popular used cars are worth more on average today than when they were sold new and Toyota as a manufacturer holds 10 out of the top 20 available spots for passenger and SUV models aged between two and four years.
• The list of top selling cars in the used market closely reflects preferences in the new car market, with the Ford Ranger taking out top spot ahead of the Toyota Hilux.

Dealers seeking more granular and local data can contact AutoGrab directly for a tailored solution.

If you are a Dealer of a contributing brand and would like access to the monthly report please email Communications Manager Ashleigh Sykes on asykes@aada.asn.au.

Yesterday the Albanese Labor Government tabled the Independent Review of the Franchising Code of Conduct in Parliament.

The review by small business expert, Dr Michael Schaper, makes 23 formal recommendations and 34 implementation suggestions for Government to consider.

The review found that the Franchising Code of Conduct is generally fit for purpose and found that Part 5 of the Code relating to new vehicle dealerships is operating as intended and not producing any unintended consequences.

Disappointingly the recommendations didn’t address many of the issues the AADA raised during the Code Review Consultation, including the need for strong protections against termination and non-renewal and the need for compensation for loss of goodwill.

The Review also failed to address the need for the inclusion of truck Dealers in the automotive schedule. Many of the arguments made for specific protections for automotive Dealers also apply to truck Dealers, and it is unfortunate that the review did not recommend their immediate inclusion in the Automotive provisions of the code.

The Review did recommend that reviews of the Code should be conducted in five yearly cycles in the future and the next review of the Code should consider whether Part 5 should be retained and, if so, whether it should be extended to other subsectors such as trucks, farm machinery and motorcycles.

While the Review could have gone further to protect automotive franchisees, the AADA welcomed the following recommendations:

4. Service and repair work conducted by motor vehicle dealerships should be explicitly captured by the Code.

4A. The definition of motor vehicle dealership in the Code should be amended to clarify that it includes all sales, service and repair work.

23. The Australian Government should investigate the feasibility of introducing a licensing regime to better regulate most aspects of the franchisee-franchisor relationship.

The Report also detailed the responses to the Franchisee survey which was undertaken to obtain a greater broad-based understanding of the franchisee perspective of matters investigated in the review. Encouragingly there was significant representation from motor vehicle dealerships in responding to the survey, which accounted for 173 of the 381 responses. Motor vehicle Dealer’s average franchisee satisfaction with their franchisor was rated as 6.3 and the average franchisee rating for the effectiveness of the Code was 3.9.

The AADA will continue to engage with the Government on the details of the Review and advocate the need for strong protections for local automotive businesses.

You can view the full Report here.

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The AADA and AutoGrab are pleased to release the first annual Automotive Insights Report (AIR) – Year That Was for 2023.

The data shows that 2,074,535 used cars were sold in Australia in 2023, with strong used car supply aligning with the record year for new vehicle sales. It demonstrates the significance of the used car market in Australia, for every new car sold, 1.7 used cars were sold.

The combined new and used car market saw almost 3.3 million cars sold in 2023 and AADA will continue to advocate that it is important for industry participants, regulators, and policymakers to look at the entire market when making decisions.

For retained value across all age groups, utes and light commercial vehicles held their values above the average. Passenger vehicles across all age groups tracked close to the average, while SUVs were the worst performing vehicle segments in terms of retained value, sitting well below average for all age groups.

The Automotive Insights Report shows that for 2023:

• Across Australia 2,013,465 vehicles were listed for sale in 2023 and in that period 2,074,535 were sold.
• Exceptional demand for used cars, with 34.4 per cent growth since January, hitting its peak in November 2023.
• Petrol and diesel vehicles accounted for more than 96 per cent of used car sales, with hybrids, (2.7 per cent), EVs (0.7 per cent) and PHEVs (0.1 per cent) growing off a low base.
• Toyota was the top selling used car brand with 16.6 per cent market share, followed by Mazda (8.2 per cent) and Ford (8 per cent).
• The Ford Ranger was the top selling vehicle with 65,938 units, pipping the Toyota Hilux (65,852) by only 86 units.
• Used car prices declined 1 to 1.5 per cent monthly, which was accompanied by a rise in days to sell.
• The used EV market saw an almost doubling in supply and sales. However, EVs represent only 0.7 per cent of market share; have below average retained value; and take longer to sell than petrol and diesel cars.

Dealers seeking more granular and local data can contact AutoGrab directly for a tailored solution.

VIEW 2023 AIR – YEAR THAT WAS

The December 2023 Automotive Insights Report is now available for members. The Dealer exclusive report showcases a monthly analysis of used car sales, developed in partnership with AutoGrab.

December’s AIR shows that used car trading softened compared to the previous month, most likely due to seasonal factors. The average time taken to sell increased over time, while the retained values of used cars is edging down.

Some key insights from the monthly December figures include:
• Across Australia 276,268 vehicles were listed for sale and in that period 169,312 were sold.
• The data shows that the overwhelming majority of used cars being bought and sold have petrol or diesel engines.
• The used market for electric vehicles remains very immature with battery electric vehicles making up 0.7% of total cars sold and plug-in hybrid vehicles making up less than 0.2%.
• The average time to sell a used car is 50.9 days which is a slight reduction from the previous month, but the trend shows days to sell increasing.
• Retained values continue to decline after the record highs of recent years.
• Some popular used cars are worth more on average today than when they were sold new – examples include the Suzuki Jimny, Toyota Yaris/Yaris Cross, Toyota Landcruiser, Toyota Rav4 and Honda Jazz for vehicles aged between two and four years.
• The list of top selling cars in the used market closely reflects preferences in the new car market, with the Ford Ranger taking out top spot ahead of the Toyota Hilux.

The 2023 Annual Report rounding up the full calendar year of used car sales will be made available to members in the coming weeks.

Dealers seeking more granular and local data can contact AutoGrab directly for a tailored solution.

If you are a Dealer of a contributing brand and would like access to the monthly report please email Communications Manager Ashleigh Sykes on asykes@aada.asn.au.

The Queensland Government has released their response to the Review of the Electrical Safety Act (The Williams Review) and in a good outcome for the automotive industry, it has decided to not proceed with a controversial proposal which would have increased cost and complexity for dealerships.

AADA has been following the review closely, submitted to the Electrical Safety Office, and written to Minister Grace Grace, opposing inclusion of electric vehicles under the regulatory scope of the Queensland Electrical Safety Act.

The Queensland Government has decided not to proceed with recommendation 8 of The Williams Review which had proposed that work on electric vehicles (EVs) be included under the Electrical Safety Act and require that “appropriately licensed electrical workers to carry out the electrical work on the electrical components”.

The Queensland Government plans instead to further consider, “how to maintain and improve electrical safety in the context of electric vehicles will occur through a roundtable who will liaise with the Commonwealth and other Australian jurisdictions.”

They have also recommended that the Electrical Safety Office “engage with other relevant Queensland and Australian regulators as needed to ensure appropriate scope and to avoid both regulatory gaps and duplication.”

Separate to the review, a roundtable chaired by the Queensland Commissioner for Electrical Safety has been convened to consider safety improvements for those who work on electric vehicles, with outcomes to be referred for national consideration later this year.

In the meantime, there is no change to the regulation of work performed in the service, repair, and maintenance of EVs in Queensland.

AADA will be seeking to consult with the Queensland Commissioner for Electrical Safety in the immediate future.

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VFACTS for December 2023 and the full calendar year were released today by the Federal Chamber of Automotive Industries. It was a record-breaking year for new car deliveries, with 1,216,780 vehicles delivered, beating the previous sales record set in 2017. It represents a 12.5 per cent increase on 2022.

The record VFACTS figure is testament to manufacturers and Dealer’s ability to deliver vehicles to customers from strong order banks, along with demand remaining high for most of the year. With high interest rates and cost of living pressures it is anticipated the record year won’t be repeated in 2024.

Toyota continued to dominate, despite a slight drop in their numbers compared with 2022. They held a 17.7 per cent market share and were the top selling manufacturer for the 21st year in a row with 215,240 cars sold. The top five was rounded out by Mazda (100,008), Ford (87,800), Kia (76,120) and Hyundai (75,183).

Brands that didn’t fare as well include Honda, with the brand posting their lowest sales figures on record for the second year in a row, Mercedes-Benz, whose sales figures decreased by 9.3 per cent, and Suzuki saw a 20.9 per cent decrease for 2023.

SUVs and light commercial vehicles remained extremely popular, accounting for 15 of the top 20 models sold in 2023. They represented just over 78 per cent of vehicles sold for the calendar year.

Battery electric vehicles continued to increase in popularity with 87,217 vehicles sold for the year, representing 7.2 per cent of sales. 16.2 per cent of vehicles sold in 2023 were low emissions vehicles including hybrids, BEVs and PHEVs.

The AADA has assessed VFACTs Top 20 Brands & Models for the whole of 2023, and for December 2023, ranking them by volume.

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The South Australian Government announced yesterday that the $3,000 subsidy for eligible new battery electric or hydrogen fuel cell vehicles will end from 1 January 2024.

The move was announced as part of the 2023/24 mid-year budget review. SA Treasurer Stephen Mullighan stated that the $3,000 EV subsidy is no longer necessary following the Commonwealth Government’s updates to the fringe benefits tax and cuts to import tariffs.

Individuals and businesses that have entered into a binding contract for the purchase of an eligible electric or hydrogen fuel cell vehicle prior to 1 January 2024, and are awaiting delivery of the vehicle, will still be eligible to receive the subsidy regardless of whether the vehicle has been registered by that date. Applications for eligible vehicles purchased prior to 31 December 2023 must be submitted by 31 December 2024.

There are no changes to the registration exemption for electric vehicles. A three-year exemption will still be available to any eligible new electric vehicles valued below $68,750 and first registered between 28 October 2021 and 30 June 2025.

More information on the changes from 1 January can be found here.

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The AADA is advising members that the ACCC has released a report on compliance with Unfair Contract Terms (UCT) in franchise agreements, so members who are negotiating new agreements are informed about the Regulator’s views.

On 15 December 2023, the ACCC published the ‘Key findings of targeted compliance checks on franchisors report’ which provides guidance to the franchising sector about complying with the UCT laws, after penalties came into effect from 10 November 2023.

This report details the ACCC’s thinking around key issues that we see in many dealer agreements, Dealers and Dealer Councils should familiarise themselves with this information to assist in negotiations with franchisors.

This report was published following a review of franchising agreements by the ACCC which included, compliance checks with 10 franchisors from a variety of industries requesting franchisors voluntarily provide the ACCC with the latest copies of their key facts sheet, franchise agreement and disclosure document.

The review found that a significant number of clauses in the reviewed agreements raised UCT concerns and identified potential UCTs in 5 main areas:

• unilateral variation clauses
• withholding and set-off payment clauses
• audit power clauses
• restraint of trade clauses
• termination clauses.

The AADA urges Dealers to review their franchise agreements for potential UCTs and note that it is not sufficient for a franchisor to simply add a clause in a contract to state that all the terms are reasonable and necessary.

More information on UCTs is available on the ACCC website.

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