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A new report prepared for the Australian Automotive Dealer Association by respected climate risk and energy transition experts Energetics outlines the task of rolling out electric vehicle charging infrastructure in Australia’s new car dealerships.

Energetics’ analysis found that the investment needed in charging infrastructure is estimated to exceed $1 billion for franchised new car Dealers in Australia.

“The cost of chargers and associated network upgrades is significant, but Dealers understand the importance of investing in this infrastructure and their role in educating customers on EVs,” said AADA CEO James Voortman.

“New car dealerships will be at the forefront of rolling out EV chargers as manufacturers require them to install chargers in their showrooms and service departments as part of their franchise agreements.”

“Many consumers considering taking the leap and buying a new EV are looking for their Dealer to provide education about the vehicle and the charging experience. The availability of EV chargers in dealerships means vehicles in stock can be charged and made available for test drives while buyers can also see first-hand how charging works,” said Mr Voortman.

“Evidence suggests, the majority of new EV owners will be servicing their vehicles with an authorised repairer under manufacturer warranty, so it’s important that Dealers can ensure these vehicles are able to be charged,” he said.

“This report makes an important contribution to this issue, especially in light of Energy Minister Chris Bowen’s recent announcement of $60 million in support of car Dealers installing EV chargers.”

“The work done by Energetics can be an important resource for the Government in developing the details of the $60 million car Dealer charging fund,” Mr Voortman said.

Energetics’ analysis found that:

• Investment needed in infrastructure is estimated to exceed $1 billion for franchised new car Dealers in Australia.
• With over 3,100 Dealers nationwide, the capital investment is expected to range from $130,000 for a typical regional Dealer to $580,000 for a typical rural Dealer.
• The rollout of EVs is anticipated to occur in metropolitan areas at a faster rate initially than regional and rural locations. This is mainly due to the availability of the necessary infrastructure. Customer demand is also expected to be greater in metropolitan locations.
• As rural dealerships are assumed to require the largest upgrades to electrical infrastructure, upgrade costs are higher than those for metropolitan and regional dealerships.
• Dealerships need to carefully consider the type of EV chargers installed on-site. Some locations may not need Level 3 charging capacity (e.g. metropolitan and regional dealerships), although this will often be determined by the OEM and written into Dealer Agreements.
• Dealerships may face lead times of up to two years for the installation of certain infrastructure. These include electrical infrastructure upgrades (e.g. installation/upgrading of transformers) and charging requirements (e.g. Level 3). Rural dealerships can expect longer delays.
• Dealership employees will be supporting the marketing, sale, and service of EVs.
• OEMs may have their own emissions reductions targets. They may also respond to new vehicle efficiency standards globally. Both factors can lead to expectations and requirements of their dealerships with regards to the implementation of EV charging infrastructure and the range of EVs for sale. Noting some OEMs may be able to share the financial burden of the new EV infrastructure, and Dealers should investigate any such potential.
• Australia’s new National Vehicle Emissions Standards (NVES) will likely increase the demand for plug-in hybrid electric vehicles and EVs, requiring Dealers to invest in onsite charging and infrastructure upgrades.

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The Australian Automotive Dealer Association notes the Government’s announcement today unveiling the details of the New Vehicle Efficiency Standard (NVES) and while we acknowledge the progress, we remain conscious of the challenges facing our members.

“This is not the Vehicle Emissions Standard the industry has asked for, but we recognise that the Government has listened to industry and made significant changes to its original policy and is seeking to strike a balance between the needs of competing interests,” said AADA CEO James Voortman.

“We welcome the revision of the LCV headline targets, the recategorisation of body on frame SUVs into the LCV category, and the commitment to provide $60 million to boost EV charging at Australian dealerships. We are now committed to working with the Government on a range of key issues affecting Dealers including – ensuring that the compliance for this policy is at the point of sale, not the point of importation; implementing meaningful automotive franchising reform; and addressing the enormous investment task facing Dealers in this transition,” he said.

“These are critically important issues for automotive retailers and if left unaddressed, the NVES could have dire consequences for Dealers – we welcome the Government’s commitment to work with us on these matters,” said Mr Voortman.

“Make no mistake, this is a major regulatory intervention into the automotive industry and while we understand and accept the Government’s objectives, we would also urge them to work with industry to identify any unintended consequences arising from this policy,” he said.

“As this policy is implemented over the next five years, we will need the Government to keep an open mind on these standards and to constantly review developments within the market and make sensible changes if required,” he said.

“The first review will commence in 2026 and this will be an opportunity to assess the first two years of the NVES, but also determine whether the settings are appropriate for the incredibly challenging outer years of the policy,” said Mr Voortman.

“This is a contentious issue in our industry and there is a great deal of anxiety among Dealers. We urge the Government to consider the needs of these businesses which employ more than 60,000 people, invest in cities and towns across the nation and which provide so much support and sponsorship to their communities,” he said.

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The Australian Automotive Dealer Association (AADA) is pleased to announce the 2024 AADA Convention & Expo details. This important industry event will be hosted at the Melbourne Convention & Exhibition Centre (MCEC), located in the heart of Melbourne, on July 24-25, 2024.

The 2024 Convention & Expo theme, ‘Driving Forward Together’, will spotlight the emerging challenges and opportunities within the dynamic online commercial landscape and the regulatory challenges around vehicle emissions. The AADA program will also focus on the impending transformative shifts in the franchised new car dealership sector and their pivotal role in car distribution. The 2024 AADA Convention & Expo program promises to tackle these evolving dynamics and provide our attendees with thought-provoking discussions and practical solutions to navigate this changing terrain.

“We are really looking forward to the AADA Convention & Expo returning to Melbourne for the first time since the pandemic. Our industry is facing many challenges, so we will be developing a program which assists Dealers to do what they do best, which is turning challenges into opportunities,” said James Voortman, AADA CEO.

“Marking this industry event in your calendar is crucial. The 2024 AADA Convention & Expo is brimming with potential. We are optimistic that this event will act as a significant platform for industry leaders and stakeholders to assemble, engage in meaningful discussions, and collectively navigate the future trajectory of our industry,” said Patrick Tessier OAM, Convention Director.

For more updates on the 2024 AADA Convention & Expo, we invite you to visit our website: https://aadaconvention.com.au/.

ENDS.

For further information please contact:

Patrick Tessier OAM
Convention Director
E: patrick@aadaconvention.com.au
M: +61 412 685 857

 

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February used car sales figures have been released today in the Automotive Insights Report (AIR). The figures released by AADA and AutoGrab show that the number of used vehicles listed for sale has increased but the number of used cars sold have dropped.

“Overall, the used car market seems to be presenting opportunities for consumers interested in buying a used car,” said AADA CEO James Voortman.

“A strong start to 2024 new car deliveries is flowing down into the used car market, with a slight rise of 1.3 per cent in the number of vehicles listed for sale in the month,” he said.

“While listings increased, sales of used cars dropped by 1.2 per cent from the previous month,” said Mr Voortman.

“Amid all the discussion on fuel efficiency standards, the number of EVs listed for sale is almost four times the number which sold in February, indicating a mismatch between demand and supply of used EVs. Petrol and diesel cars accounted for 95 per cent of used cars sold, with hybrid sales increasing by 4.6 per cent this month,” he said.

“The top 10 selling makes and models list also closely reflects preferences from the new car market, with the Ford Ranger and Toyota Hilux the top selling vehicles for the month,” he said.

“Although February saw a drop in average retained values, for vehicles aged 2-4 years, there are some cars that continue to secure good retained values for consumers with 18 of the top 20 models listed reclaiming their positions from January,” said Mr Voortman.

AutoGrab’s Chief Commercial Officer Saxon Odgers said, “This month’s findings reflect the current strength in the automotive industry, showcasing yet another strong month for car sales across the board.”

“One notable statistic is the average days to sell, which has reached its lowest point since March of last year. This shows a swift turnaround in the market, reflecting growing consumer demand and efficient inventory management strategies,” said Mr Odgers.

The Automotive Insights Report shows that in February:

• Across Australia 286,329 vehicles were listed for sale and in that period 179,448 were sold.
• The data shows that the overwhelming majority of used cars being bought and sold have petrol or diesel engines, occupying a 95 per cent market share.
• The time it takes to sell a used car has gradually come down to 44 days in February after peaking in November at 52 days.
• On average, retained values saw a month on month decrease.
• Some popular used car models aged 2-4 years old continue to report a strong return for consumers in terms of their retained values with 18 of the top 20 models listed making a repeat appearance from January.
• The top 10 selling cars in the used market remained very similar to the previous month with 9 of the top 10 makes and models retaining their spot in the list. It closely reflects preferences in the new car market, with the Ford Ranger taking out top spot ahead of the Toyota Hilux.

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The Australian Automotive Dealer Association is calling on the Government to renovate its New Vehicle Efficiency Standard proposal or risk higher vehicle prices and lack of consumer choice.

The AADA Submission has highlighted the limitations of the current proposal and suggested changes to the policy.

“Dealers are 100 per cent supportive of a fuel efficiency standard in Australia, but the policy in its current form will do more harm than good,” said AADA CEO James Voortman.

“This policy goes too far too fast and it’s almost certain Australians will pay more for new cars and lose access to their beloved Utes and SUVs,” he said.

“Less than one in three of the more than 2,000 vehicle variants for sale in Australia today would meet the initial target proposed to start in less than 10 months-time. The cars most likely to experience a price hike or be removed from the Australian market are the Utes and SUVs that Australian families and businesses love.”

“This policy comes close to a de facto ban on petrol and diesel vehicles. While EVs are the future, the majority of customers are still concerned over the cost of the vehicles, the lack of charging infrastructure and the dearth of affordable EV Utes and large SUVs,” said Mr Voortman.

“No other industry has been asked to reduce its emissions by 60 per cent in only five years. I can see car brands unable to comply with this policy departing Australia, leaving their customers and Dealers high and dry. We have seen this before with the likes of Holden and other brands,” he said.

“The worst thing we can do for vehicle emissions is to discourage new car sales. The age of our vehicle fleet has been growing over a number of years and there is a major risk that consumers simply hold onto their older cars for longer at the expense of the environment,” Mr Voortman said.

We urge the Government to consider the recommendations we have put forward, including,

• Adding SUVs and four-wheel drives to the Light Commercial Vehicle Category,
• Allowing the expanded Light Commercial Vehicle category seven years to meet their target,
• Reducing the proposed penalties in the early years of the scheme, and
• Developing a series of incentives to stimulate consumer demand for low emissions vehicles.

Australia’s more than 3,100 new car Dealers employ some 61,000 people, invest significantly in local towns and cities with a total economic contribution of $18.6 billion to the national economy.

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New research about car buying intentions underscores the challenges of the Government’s plan to reduce Australia’s light vehicle emissions by 60% in five years.

‘EV & Hybrid Vehicle Wave 2 Insights Report’ released by the Australian Automotive Dealer Association shows that electric vehicle sentiment is shifting at a trickle rather than a flood, while most consumers plan for their next vehicle to be a SUV or Ute.

The research is a second wave of tracking EV sentiments across the community following a similar study conducted in December 2022, collecting feedback from a sample of 2,000 Australian drivers (representative by age, gender and household location across Australia).

“The proportion of the market open to buying an EV has grown but represents only one in four buyers, as the strongest barrier to considering an EV remains the higher purchase price,” said AADA CEO Mr James Voortman.

“Most buyers are looking at a non-electric SUV or a Ute as their next vehicle. This is no surprise because these are the vehicles Australians love, but are also the cars most at risk of an overly aggressive vehicle emissions standard,” said Mr Voortman.

“It is also clear that consumers are less likely to buy a new one due to the current cost of living crisis. The last thing we need to do at this time is to further discourage consumers from buying new cars which are safer, cleaner and greener than the old cars they replace,” he said.

“We urge the Government to study this survey and adopt an emissions policy which reduces vehicle emissions in a way that protects affordability, choice and the local automotive industry,” said Mr Voortman.

Among the survey findings are:

• Two thirds tell us they’re going to keep their current vehicle for longer than initially planned due to cost of living pressures.
• Three in five say that they’re less open to paying more for EVs due to cost of living pressures.
• Respondents open to buying an EV for their main vehicle has grown from 21% in 2022 to 25% in 2024.
• Consumers are more likely to be intending on replacing their main vehicle in the next 3 years (61%, up from 53%).
• The price premium consumers are willing to pay for an EV over a traditional fuel type is 8% up from 6%.
• More than two-thirds believe governments should be incentivising more customers to transition to EVs.
• 57% are not open to an EV due to perception that EVs cost too much, but this is down from 62%.
• 62% of respondents say their next purchase will be a SUV or a Ute.

“This research confirms what we already knew, Australians continue to preference SUVs when considering their next vehicle purchase, are very conscious of price given current cost of living pressures, and intention to consider an EV on the next main vehicle driven is lowest when replacing large SUVs and utes,” said Mr Voortman.

The AADA represents 670 new car Dealers in Australia that operate over 3,000 dealerships that directly employ over 56,000 people.

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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 have increased their purchases of used cars in January with an increase of 7.3 per cent in cars sold compared to December 2023,” said AADA CEO James Voortman.

“The market appears to have bounced back after the holiday period, and continued strong supply of new cars has had a flow on effect in the availability of used cars in the market,” he said.

“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 the market will likely remain volatile month-to-month, with a relatively low volume of vehicles being listed for sale,” said Mr Voortman.

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.

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The AADA notes the Albanese Labor Government’s tabling of the Independent Review of the Franchising Code of Conduct in Parliament today.

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

“We are disappointed that the recommendations don’t address many of the issues the AADA raised during the Code Review Consultation, in particular the need for strong protections against termination and non-renewal and the need for compensation for loss of goodwill upon cessation of a franchise agreement,” said AADA CEO James Voortman.

“The recent case between Mercedes-Benz Dealers and Mercedes-Benz Australia/Pacific Pty Ltd highlighted the current failings of the Franchising Code with the presiding Judge stating that further consideration of the terms of the Code and possible reforms are needed, and we are disappointed that this was not picked up in the Review,” he said.

“It is frustrating that the Review ignored these comments and the overwhelming evidence which suggests that franchising regulations in Australia continue to leave new car Dealers exposed to exploitative behaviour,” he said.

“We are also disappointed that the Review did not recommend the immediate 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 we find it bewildering that the review did not recommend their inclusion in the automotive provisions of the code,” said Mr Voortman.

“While we consider that the review could have gone further to protect automotive franchisees, we welcome the recommendation that service and repair work conducted by motor vehicle dealerships should be explicitly captured by the Code,” he said.

“We also see merit in introducing a licensing regime to better regulate most aspects of the franchisee-franchisor relationship,” said Mr Voortman.

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

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The Australian Automotive Dealer Association notes the release of the Government’s next consultation on a light vehicle fuel efficiency standard.

This impact statement is very technical and considers a number of options, but the Government has stated that it has a preferred option of reducing the emissions by more than 60 per cent for passenger vehicles and light commercial vehicles in just five years.

“On the surface this is an incredibly ambitious target which will be difficult to achieve especially for utes and large SUVs,” said AADA CEO James Voortman.

“This could have consequences for affordability and vehicle choice,” he said.

“Other countries have reduced new vehicle emissions over a much longer time frame, with credits built into their standards. They have also offered generous incentives universally available for consumers to buy low emissions vehicles – the Government’s preferred option could not be more different,” said Mr Voortman.

“We are concerned that this policy goes too far too fast and that consumers will be the big losers, as will the local automotive businesses,” he said.

“We will study this impact statement to understand the findings and consult with our members, Australia’s more than 3,000 new car Dealers.”

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The Australian Automotive Dealer Association 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.

“This data demonstrates the significance of the used car market in Australia with more than two million used cars sold in 2023. For every new car sold 1.7 used cars were sold, confirming that most Australians are deciding to purchase used cars,” said AADA CEO Mr James Voortman.

“The combined new and used car market saw almost 3.3 million cars sold in 2023 and it is important for industry participants, regulators and policymakers to look at the entire market when making decisions” he said.

“The demand for used cars remained robust in 2023, attributed to our growing population and cost of living pressures reducing buying power,” said AutoGrab Chief Commercial Officer Saxon Odgers.

“The good news for those looking to purchase a used car is that we’ve seen a clear downward price trajectory since March 2023 following a surge of new vehicle supply, with this pattern anticipated to persist through the first half of 2024. This represents a win for consumers who now have a choice when looking to buy their next car as new cars are available for delivery and used cars are more accessible,” said Mr Odgers.

“Congratulations to Toyota for being the top selling used car brand in 2023 and to the Ford Ranger for narrowly beating off the Toyota Hilux to claim the mantle of Australia’s top selling used car for the year,” said Mr Voortman.

“When diving into retained values of vehicles, a topic that interests many consumers and Dealers, we can see that 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,” he said.

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% of used car sales, with Hybrids, (2.7%), EVs (0.7%) and PHEVs (0.1%) growing off a low base.
• Toyota was the top selling used car brand with 16.6% market share, followed by Mazda (8.2%) and Ford (8%).
• 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% 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% of market share; have below average retained value; and take longer to sell than petrol and diesel cars.

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