Archives: Dealer Bulletins

In an industry first, the Australian Automotive Aftermarket Association (AAAA), the Australian Automotive Dealer Association (AADA) and the Motor Trades Association of Queensland (MTA Queensland), have joined forces to address a significant industry issue.

The automotive industry is experiencing extraordinary skills shortages, so understanding the journey undertaken by apprentices is vital to support the sector into the future. Together, the AAAA, AADA and MTA Queensland, commissioned ACA Research to run a comprehensive survey of automotive apprentices. The findings of this invaluable research will enable the industry, training providers and government to make the changes needed to improve skill development, career pathways and job opportunities.

While some of the findings show young apprentices consider changing careers during their apprenticeship, the vast majority have a passion for and stay in the automotive industry.  This commitment is connected to their initial career drivers and vision for the future through their true love and passion for all-things automotive. For policy makers there are key opportunities to design closer engagement with fourth year apprentices to educate on options post-qualification. 88 per cent of apprentices have a genuine interest in developing their own knowledge in the newest technologies and overwhelmingly recognise the importance of ongoing learning beyond the completion of their initial qualification. Students identified extension learning in specialisation areas like hybrid or electric vehicles, programming and diagnostics, advanced driver assistance systems technology, or learning business skills to operate a workshop.

The survey provided a great insight into the perspectives of women who work in the automotive industry. There have been significant improvements for women undertaking an apprenticeship particularly as they become familiar with the opportunities available for a long-term automotive career and the successes of other women working in the industry.

To access the report, please visit this link:

 

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The WA state government announced the introduction of a new licence category for Dealers wanting to sell on consignment. This decision allows consignment selling in the state which is a practice that was previously disallowed and subject to a separate application process to Consumer Protection for the restriction to be removed.

The licence will be available to Dealers subject to a range of conditions including a “fit and proper person” test and a character test. The announcement also provides further detail on the conditions of the consignment licence, which are as follows:

• all consignment contracts must be in writing, contain certain regulated terms and conditions, and state in writing the amount which the owner should be paid;
• the Dealer can keep any money they receive from the sale in excess of the amount they agree to pay the owner;
• the Dealer must give the owner a copy of the consignment agreement immediately after the agreement is signed;
• all proceeds or money from any consignment sale must be held in a trust account;
• the Dealer must pay the total net proceeds to the owner within two business days of receiving payment;
• the Dealer must get approval from the owner to conduct repairs prior to selling the vehicle; and
• the Dealer must pay for all warranty repairs after the vehicle is sold.

The existing motor vehicle Dealer training course will be updated to include information regarding the new licence category.

The amendments to the legislation are yet to be introduced to parliament and a date for commencement is not yet known. Further advice regarding the introduction of the new licence category will be provided when it becomes available.

 

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There is currently considerable media attention on Dealer delivery fees, with reports and evidence brought forward by consumers to media outlets detailing excessive fees being charged. The AADA response to the media inquiries has made it very clear that we do not condone excessive fees. Our advice to consumers is to make sure that they are provided with a full breakdown of the purchase price of the vehicle prior to signing the sales contract and if they are not satisfied they should shop around for a better deal.

In our responses we have also made it clear that there are legitimate costs incurred by Dealers when preparing a vehicle for delivery. For example, these costs arise from things like registration administration, critical safety checks of the vehicle and completion of OEM prescribed pre-delivery checklists.

Dealers should be aware that this issue is of strong interest to several media commentators and media outlets, consumers and consumer advocacy groups and is something that the ACCC has historically shown interest in. We would encourage Dealers to make sure that the Delivery fees that they charge are justifiable and relate directly to costs incurred, rather than just a contributor to the Dealers bottom line profit.

 

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AADA has previously been in communication with Victorian Dealers about the State Government’s subsidy for consumers purchasing a new zero emissions vehicle (ZEV). This subsidy was designed to encourage the uptake of ZEVs and is being managed by Solar Victoria. Solar Victoria have provided an update on the program.

Highlights of the update include:

• It is progressing well with 4,000 subsidies allocated at the end of February 2022.
• Additional subsidies were released in early March representing a further $7.2 million in funding. A further 2,600 subsidies were made available for purchasing a ZEV in Victoria.
• There are now 72 participating ZEV providers.
• Due to supply chain issues delaying car deliveries beyond Solar Victoria’s required 6-month delivery period, they have provided an extension to all current applications of 120 days. This is to ensure the subsidy is still available to customers and provide some confidence to Dealers.
• Future customers and sales will not receive this extension, so Dealers are required to deliver vehicles to customers within 6 months of contract of sale.
• The subsidy continues to be applied through an online portal for Dealerships to utilise and applies the subsidy as a discount at the point of sale.

For full details on the ZEV Subsidy, their portal, or any questions, visit the information page for ZEV traders or contact them directly.

Solar Victoria

P 1300 376 393

E zevsubsidy@team.solar.vic.gov.au

 

SOLAR VICTORIA – INFORMATION FOR ZEV TRADERS

 

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NSW members may be aware of a proposal by the NSW state government to restrict end to end, online selling to new vehicles only, effectively making it illegal to sell used vehicles entirely online. In welcome news, we have just been advised by the NSW Department of Customer Service that the amendments will now be extended to allow for the purchase of both a new and used cars to be conducted entirely online. While we are still awaiting the final wording of the regulations, the advice provided indicates that it will be changed to recognise this decision.

In our view this change would have resulted in considerable consumer detriment and harm to all licensed Dealers in NSW. In late March we lodged a submission to the NSW state government indicating our strong opposition to the proposal and calling for detailed evidence as why such a drastic change was required. We also met with NSW Minister for Small Business and Fair Trading, Eleni Petinos, to discuss our concerns regarding the proposal.

We commend the Minister and the Government on acting so quickly and decisively to ensure licensed traders can continue to sell in ways that offer convenience to their customers, while still placing a priority on protecting consumer interests.

The review of the Act also includes sections designed to modernise the legislation in several key areas, which we fully support, though we have concerns about proposed changes to the way defective vehicles are handled and the proposed requirement for them to be returned to the selling Dealer for rectification, which may not be practical in some situations. We will continue to work with the Department on this issue.

 

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Consumer advocacy group Choice has called attention to car financing lending practices where part of the purchase price of a car is split from the overall price and put on to a Buy Now Pay Later (BNPL) scheme. Choice claims that this practice is being used by car dealerships as a workaround to the safe lending laws and gives examples of the practice being used when customers fail to qualify for credit on the full purchase price of the vehicle. Choice does not define what it considers a “car dealership” to be, so it is unclear if they are referring to franchised new car Dealers, used car yards or both.

Choice is calling for a review of BNPL lending services and for consumer safeguards to be implemented and has cited this practice of split payments for car purchasing as an example of lending activity that can lead to consumer detriment.

The AADA has received feedback from several members which indicate that this practice is not something they engage in and is not commonplace among franchised new car Dealers. The inference by Choice is potentially harmful to the reputation of Dealers and their relationships with customers and their franchisors.

The AADA secretariat is currently seeking a meeting with Choice to better understand the extent of the issue and to analyse the Choice data to assess the level of involvement of franchised Dealers. While we have no formal policy on the need for greater consumer safeguards to be built in to BNPL products, as an industry we have worked constructively and extensively with ASIC and other regulators on the introduction of safe lending practices that ensure consumers are appropriately protected. In our view, further regulatory intervention in our industry is unwarranted in the absence of strong, granular evidence which demonstrates a need for it, and we intend to clarify our position with ASIC at the earliest opportunity.

 

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AADA is pleased to report on recent government advice regarding planned changes being introduced to fringe benefits tax as it applies to car parking. This is an important issue for members and was the subject of a Supplementary Pre-Budget Submission which we prepared, detailing the unintended consequences to the automotive industry.

The Government has now acknowledged that the proposed changes do not reflect the policy intent of the law and has agreed to restore the previously understood interpretation.

This is a positive development for Dealers and employees as many would have faced increased tax liability.

The AADA will be working with the Government and the various taxation experts in our industry on this consultation process to identify appropriate modifications to the definitions in order to properly reflect the policy intent of the law.

Further details are available in the Government’s media release.

 

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The 2022-23 Federal Budget is focused on “Australia’s plan for a stronger future”. There is a strong focus on cost of living, national security and infrastructure. Some of the business incentives that have been made available during COVID-19, such as the instant asset write off/temporary expensing have not been extended beyond 30 June 2023.

Support aimed at small business has been limited to those with a turnover of less than $50 million. Details on the new apprenticeship scheme can be found on the Department of Education, Skills and Employment website.

Our public response to the Budget is available in the AADA Media Release issued last night.

Initiatives such as a 50 per cent cut to fuel excise for six months and increase of the low- and middle income tax offset should have a positive flow on effect for new car Dealers.

We have prepared the attached 2022-23 Budget Briefing paper for members which provides a summary and brief explanation of the measures that are relevant.

Further details are also available on the Government’s Budget website.

Dealers are advised to contact their accountants to provide detail on how the Budget will affect them and what parts of it they may be eligible for.

 

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To: Dealer Principals & Service Managers

Survey for Completion by Current Automotive Apprentices

This is the last week for current apprentices to complete the Automotive Skills Shortages survey. The survey takes around 15 minutes, and all participating apprentices will have the opportunity to go into the draw to win a number of prizes.

Dealerships and workshops are struggling to find the trained employees they need to sell, service, and support vehicles. AAAA, AADA and MTAQ recognise we need to grow the pool of apprentices coming into the automotive industry.

We have contracted ACA Research to conduct a survey with automotive apprentices across Australia about their experiences. Insights from this research will be used to identify and promote solutions that can ultimately ensure more apprentices enter the automotive trade and will provide empirical evidence in any approach to government we make, either individually or collectively.

We appreciate all the Dealer Principals and/or Service Managers who have already shared this survey with their current apprentices and encouraged them to respond.

 

TAKE SURVEY

 

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