The establishment of an office in Canberra had helped AADA become one of Australia’s most effective business associations, AADA chairman Terry Keating has told the 2019 AADA National Dealer Convention.
“The last twelve months has seen our association mature its secretariat to the point that we can now respond to all of the issues that we wish to address in a timely manner,” he told the audience at the Melbourne Convention and Exhibition Centre.
“We now have the administration office in Melbourne, and we have a small facility in Canberra. The decision to open the Canberra office has given us great agility to react to matters of advocacy and policy on a national level. Indeed, I’ve been told by insiders that we are being seen as one of the really effective operators in these matters, and in the opinion of some – nice to hear – perhaps more effective than some associations that have been around for a lot longer than we have,” Mr Keating said.
“The credit for that has to go to the foresight and the ability of our recently-retired CEO David Blackhall to understand what his board wanted him to do, and then to go and create that image, and in doing so, create our presence in Canberra, and get us in front of all the regulators and politicians we need to be in front of to explain on your behalf some of the issues that beset us, and hopefully to find ways to at least bring the pendulum back into the centre.”
Mr Keating also credited Mr Blackhall with the progress being made on developing an Automotive Code of Conduct, and said his legacy was profound.
“David joined us in 2016. We talked him into joining us for three months – that was due to an illness of his predecessor – his predecessor was unable to return to us and David agreed to stay on. He served with us for more than four years, and at the end he leaves us with a highly-competent team, and I think that speaks volumes for his professionalism and his industry nous.”
Mr Blackhall had started the ball rolling, but much work remains for AADA to achieve its policy objectives.
“One of David’s great legacies will be to get new car Dealers the Code that will recognise that Dealer businesses are unique in a broader franchising sense, and that we want and intend to get a balanced arrangement for Dealers, including but not limited to a link between tenure and capital investment.
“We want an including of the framework for all the Australian Consumer Law claims to be paid, and to be addressed, and we want obligations on the distributers at the end of the term. I have to say that some brands already do this. There are a lot of brands who really do the right thing, a lot of brands have got great relationships with their Dealer bodies, and it’s probably no coincidence that when you look at those brands, when you look at some of the market leaders, there’s quite an overlap of the two.”
As ever, Dealers have issues to contend with, including a drop in new car sales over the past year or two. Mr Keating said he hoped the fall in new car sales figures was due in part to a reduction in the number of ‘cyber cars’ being reported.
“If you look at the headline numbers that are published every month, the industry is declining by six, seven, eight thousand units a month in some months. It has been for probably most of the last fifteen to eighteen months,” he said.
“This is just a personal opinion: I suspect that some of that decline is a reduction in the number of cyber cars, and to the extent that they are contributing, their numbers are being reduced, I think that’s a good thing for the industry. So maybe the headline number isn’t as bad as we realise, and hopefully it will also turn around shortly.
On other issues, Mr Keating said the Banking Royal Commission had “made the sourcing of finance products for our customers that much more difficult”, and that the drought was having a big impact on rural and provincial Dealers. However, he stressed that Dealers had always faced challenges, and probably always would, which is why it was important to come together to find solutions.
“These factors, and others, have a big impact on our bottom line. As Dealers, we’ve always worked on benchmarks, guided by some of the big accounting firms. Two percent of turnover is probably a pretty sensible way to run your business. But right now, I would suspect that sadly, many Dealers would think two percent looks like a pretty distant mirage.
“But having said that, we’ve had these sorts of road blocks in the years gone past. We’ve had all sorts of issues, we’ve survived the GFC, we’ve survived droughts, we’ve had any myriad of problems. We had interest rates at eighteen percent, some of us can remember, so we’ve always had some issues and we probably always will continue to have issues. By and large we’ve always found a way through and I think this time should be no different.
“The very essence of this conference is to help our members to be better prepared to deal with what always will be a changing world.”