CANBERRA PRESENCE PAYING OFF: KEATING

The establishment of an office in Canberra helped AADA become one of Australia’s most effective business associations, according to AADA Chairman, Terry Keating.

Speaking at the AADA 2019 National Dealer Convention, Mr Keating said the last 12 months had seen AADA mature its secretariat to the point where it could now respond in a timely manner to any and all issues.

“We now have the administration office in Melbourne and 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. In doing so, we create our presence in Canberra get 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, find ways to at least bring the pendulum, if you like, 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. When his predecessor was unable to return to us, 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, 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 inclusion in the framework for all the Australian Consumer Law claims to be paid and to be addressed, and we want obligations on the distributors at the end of the term. I have to say that some brands already do this. There are a lot of brands that 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 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 15 to 18 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 think, 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. He stressed, however, 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 18 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.”

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