Archives: Dealer Bulletins

Many AADA members have contacted us concerning the current shortage of skilled technicians, which is affecting almost every dealership in Australia.

Declining apprentice numbers and the lack of skilled immigrants entering Australia due to ongoing boarder closures have exacerbated the issue which has been growing worse over recent years.

According to the MTAA there is a shortage of more than 17,500 light vehicle technicians in Australia. It is critically important that the Government recognises the shortage of automotive technicians and works with us to develop strategies to address the issue. One way they can do this is by including automotive technicians on the Priority Migration Skilled Occupation List (PMSOL), a list of occupations which is being prioritised during the current border closures. Governments are very responsive to calls from businesses in their electorates and having Dealers share their personal experience will be key in getting them to recognise and address the skills shortage issue.

We would therefore encourage you to write to your local Members of Parliament and specifically request that vehicle mechanics be included on the Priority Migration Skilled Occupation List. Help them understand the importance of a skilled migration program that caters to the needs of Dealers, is cost effective and easily accessible. The Government should also be working to develop a strategy to encourage school leavers to participate in automotive apprenticeship programs.

You can find your MP’s contact details here: https://www.aph.gov.au/Senators_and_Members

In your letter, we suggest you share your experiences including the direct effects the skills shortage is having on your business, including points like:

• The shortage of skilled technicians locally.
• The effect of international boarder closures on availability of skilled workers for your dealership.
• The consequences for your dealership’s service and repair department, e.g.
  • Do you have to prioritise service and repair bookings?

• The consequences for your local community/customers, e.g.:
  • The need to keep people mobile so they can get to work, do the shopping, pick up the kids from school, etc.
  • The need to delay service and repair bookings due to a lack of skilled technicians in the workshop.
  • Delays in vehicle deliveries to customers due to PDI delays
  • Difficulties you experience in performing priority repairs to emergency or essential services vehicles

The AADA also recently conducted a member survey which provides you with industry-wide facts to include in your letter. You can also download the survey and attach it to your letter.

DOWNLOAD AADA SKILLS SHORTAGE SURVEY

Some key findings of the survey are, that 97% of the respondents are suffering from a shortage of technicians with long lead times to fill vacant positions and Dealers in regional area being affected particularly hard.

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Members should be aware of two significant regulatory changes occurring in the finance and insurance departments on 5 October 2021.

1. The Deferred Sales Model (DSM) for the sale of add-on insurance products will commence. This does not affect the sale of comprehensive car insurance. It does also not include the sale of extended warranties at this stage.
2. The Design and Distribution obligations will also commence and may affect Dealers providing finance or insurance.

Members are strongly advised to work closely with their finance and insurance providers to ensure they are ready to comply with the new regulations and have the required consumer information.

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To: APPLICABLE TO VICTORIAN MEMBERS ONLY

The Victorian Government have announced a subsidy for purchasers of a new electric vehicle. The subsidy is designed to encourage the uptake of electric vehicles in Victoria and contribute to a target of 50% of light vehicle sales by 2030, outlined in the Zero Emissions Vehicles Roadmap.

Key points about the subsidy:

• Stage one is for 4000 subsidies, each delivering $3,000 off the upfront cost of a ZEV.
• Is available for any eligible vehicle purchased from 2 May 2021.
• Stage one is available to available to ZEVs priced below $68,740.
• The subsidy will apply at the point of purchase at the Dealership.
• The Victorian Government is working on providing further detail for industry regarding the operation of the scheme.

A fact sheet with more information about the ZEV subsidy can be downloaded below.

DOWNLOAD FACT SHEET

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Late last year we advised Dealers of the new class exemption granted by the ACCC for collective bargaining. This is an important change which is available to all franchisees under the Franchising Code of Conduct, irrespective of their aggregated turnover. The new provisions represent the first time the ACCC has used its power to grant a class exemption from the competition laws.

Most importantly it allows Dealers, through their Dealer Councils, to negotiate with Manufacturers on behalf of their network, without having to go through the previous notification procedures which were administratively burdensome, expensive and time consuming.

The new arrangements come in to effect from today and further details regarding the exemption are available on the ACCC website.

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In March of this year, the Morrison Government announced a set of changes to the Franchising Code of Conduct (FCC) aimed specifically at providing greater protections for franchised new car Dealers. These automotive specific principles have now passed into legislation as part of a wider reform package which strengthen the FCC to better protect franchisees and include significant increases in penalties applied to those found to be in breach of the regulations.

A full summary and further detail of the changes to the FCC is available in the final regulations and the Explanatory Statement.

DOWNLOAD FINAL REGULATIONS

DOWNLOAD EXPLANATORY STATEMENT

Of particular interest to Dealers in the statement is Schedule 11 (page 30) which details new obligations for Dealer Agreements.

Highlights from the reforms include:

• A revised definition of a motor vehicle dealership that includes those who act as an agent of a Manufacturer/Distributor.
• Improved clarity about the requirement for Manufacturers to act in good faith.
• An obligation for Manufacturers to compensate Dealers when they withdraw from the market, rationalise the network or change the distribution model.
• The components of compensation are specified and compensation cannot be contracted out of in the Dealer Agreement.
• Dealers must be given a reasonable opportunity to recoup Manufacturer specified capital expenditure.
• More broadly, applicable to all franchising agreements, legislates strengthened dispute resolution procedures and confers responsibility for administering them on the Australian Small Business and Family Enterprise Ombudsman.

The Government has also committed to further investigating the merits of a standalone Automotive Franchising Code and has indicated that consultations will begin shortly.

This legislation is due to take effect from 1 July 2021.

AADA’s Media Release can be downloaded below.

DOWNLOAD AADA MEDIA RELEASE

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The AADA is generally supportive of the measures announced in the 2021-22 Federal Budget which will help lead our economic recovery and will give automotive businesses confidence to invest and employ Australians.

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

Initiatives such as the extension of the temporary full expensing measures until 30 June 2023 Australians and the expansion of the apprenticeship wage subsidy should benefit our industry while tax relief provided to many middle- and lower-income Australian will also have a positive flow on effect for new car Dealers.

We have prepared the attached 2021-22 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.

Numerous AADA members have reported that they are suffering from crippling skills shortages, especially in the workshop where qualified technicians are proving very difficult to find. The issue appears to have become worse during the pandemic with the closure of the international borders preventing overseas workers from being able to enter the country, cutting off an important source of skilled technicians.

We are trying to determine how serious the issue is and would appreciate you sharing with us your experience.

Please click here to answer a small seven question survey which will provide us with further information.

Some Dealer Council representatives may have already responded to this survey, please disregard this notice if you have already submitted a response.

We are planning on taking up this issue with the Immigration Minister, Alex Hawke, and the Minister for Employment, Workforce, Skills, Small and Family Business, Stuart Robert so any information you can provide will be useful.

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The Australian Cyber Security Centre (ACSC) recently contacted the AADA and has asked that we inform members of the ACSC services and its role in protecting businesses in their dealings online.

The ACSC is a part of the Australian Signals Directorate, an Australian Government agency, and dedicated to improving cyber security and making dealing online safe and secure for individuals and businesses.

The ACSC achieves this by:

• Constantly monitoring and reporting on cyber threats from across the globe.
• Providing advice and information to businesses about how to protect themselves online.
• Maintaining a register of current and emerging cybercrime activity and providing guidance and advice on mitigation strategies.
• Providing a facility to report cybercrime.

Small and medium sized Australian businesses are particularly susceptible to cyber-attack and the ACSC is seeking to engage more closely with the business sector to support the integrity of online business activity.

Members can learn more and engage directly with the ACSC by:

• For small and medium businesses, registering as a Business Partner
• Larger member businesses (typically those with in house ICT departments) can register as Network Partners.

Businesses who register with the ACSC will receive exclusive and up-to-date cyber security information about the latest threats and vulnerabilities which are affecting SMBs and individuals.

For more general and up to date alerts, members can visit ACSC’s alerts page.

The ACSC has also developed a small business cyber security guide. This guide has been developed with small and medium businesses in mind as a starting point to upgrade businesses cyber security level by implementing a handful of simple yet effective controls and measures.

The centre also has advice regarding ransomware attacks as part of its “Act Now Stay Secure” campaigns. Advice regarding how businesses can protect themselves from ransomware and what to do in the event of a ransomware attack is available on ACSC’s website.

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Legislation which establishes a Scheme for sharing of service and repair information has been introduced into Parliament today. This Scheme has been in development for many years and the legislation is the culmination of a lengthy consultation and negotiation process between the AADA, other peak automotive industry associations and the Government.

The Scheme places an obligation on vehicle Manufacturers to make service and technical repair information available to independent repairers registered to and authorised by the Scheme, for a fair price.

One of the central principles of the Scheme is that information is shared on commercially fair and reasonable terms and the AADA is supportive of the legislation which adheres to this commitment and sets restrictions on sensitive information regarding safety and security.

The Scheme establishes the role of Scheme Adviser who will be appointed to handle administration of the Scheme, report to Government and manage any disputes that may arise. The Scheme Adviser will also work with the group of industry associations to help determine the day-to-day functions and operations of the Scheme and ensure compliance with the rules. There is further developmental work to be completed on the classification of technical information and the authorisation levels required for repairers to be able to access use the Scheme and access sensitive information.

The AADA will continue to work with the Government and other associations to structure the Scheme such that it meets its intent and treats all businesses involved in automotive repairs fairly and equitably. The Scheme is scheduled to commence no later than 1 July 2022. A copy of the Government announcement by Assistant Treasurer Michael Sukkar MP can be downloaded below.

DOWNLOAD SUKKAR’S MEDIA RELEASE

DOWNLOAD DEALER BULLETIN