australias no1 automotive industr …inform future procurement choices of private and public sector...

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AUSTRALIA’S NO.1 AUTOMOTIVE INDUSTRY JOURNAL EDITION 1030 – JUL 15, 2020 SUBSCRIBE FREE: CLICK HERE LUBRICANTS. TECHNOLOGY. PEOPLE. www.fuchs.com.au Mini hangs tough Model releases, dealer support and Aussie fighting spirit give Mini chief confidence sales will bounce back this year CROSSING OVER: COROLLA X FACTOR: MAZDA3, CX-30 Glass’s - Leaders in vehicle specifications, valuation data, insights and RV forecasts By ROBBIE WALLIS MINI Australia is anticipating a strong second half of trading this year and an upward sales trajectory in 2021 and beyond after faring relatively well in the first half as the new-vehicle market was ravaged by the COVID-19 pandemic. While the majority of car-makers have taken a significant hit to their sales volume this year, and the overall market has plummeted 20.2 per cent to the end of June, the BMW-owned British premium brand has fallen by less than half the industry average, down 9.4 per cent. Helping Mini avoid a significant plunge were the Countryman SUV – up 4.5 per cent to 507 units – and the Clubman hatch, sales of which climbed 26.8 per cent to 189 units. Meanwhile, the other two models in Mini Australia’s portfolio, the Hatch and Cabrio, have seen sales dip by a respective 22.1 per cent (to 736 units) and 10.0 per cent (to 117 units). The shadow of COVID-19 still looms large over the economy and the automotive industry, despite the first signs of a recovery for the auto sector last month as the monthly new-vehicle sales decline eased to only 6.4 per cent. However, in an interview with GoAuto last week, Mini Australia general manager Brett Waudby said the brand was hoping to finish off the year with a strong performance in the second half, on the back of its all-new Mini Electric and a number of special- edition models set to arrive before year’s end. “For us, we have a positive outlook, honestly,” he said. “We actually start getting (Mini Electrics) out on the road in August, our (JCW) GP is going out towards the end of this month and (there are) some allocations towards the end of the year, and we’ll be launching more editions into the market for the rest of this year. Continued next page Mini Electric

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Page 1: AUSTRALIAS NO1 AUTOMOTIVE INDUSTR …inform future procurement choices of private and public sector fleet managers. The ActewAGL trial will involve a consortium of academic, government,

AUSTRALIA’S NO.1 AUTOMOTIVE INDUSTRY JOURNAL EDITION 1030 – JUL 15, 2020

SUBSCRIBE FREE: CLICK HERE

LUBRICANTS.TECHNOLOGY.

PEOPLE.

www.fuchs.com.au

Mini hangs toughModel releases, dealer support and Aussie fighting spirit

give Mini chief confidence sales will bounce back this year

CROSSING OVER: COROLLA X FACTOR: MAZDA3, CX-30Glass’s - leaders in vehicle specification and valuation data, insights and RV forecasts

Glass’s - Leaders in vehicle specifications, valuation data, insights and RV forecasts

By ROBBIE WALLIS

MINI Australia is anticipating a strong second half of trading this year and an upward sales trajectory in 2021 and beyond after faring relatively well in the first half as the new-vehicle market was ravaged by the COVID-19 pandemic.

While the majority of car-makers have taken a significant hit to their sales volume this year, and the overall market has plummeted 20.2 per cent to the end of June, the BMW-owned British premium brand has fallen by less than half the industry average, down 9.4 per cent.

Helping Mini avoid a significant plunge were the Countryman SUV – up 4.5 per cent to 507 units – and the Clubman hatch, sales of which climbed 26.8 per cent to 189 units.

Meanwhile, the other two models in Mini Australia’s portfolio, the Hatch and Cabrio, have seen sales dip by a respective 22.1 per cent (to 736 units) and 10.0 per cent (to 117 units).

The shadow of COVID-19 still looms large over the economy and the automotive industry, despite the first signs of a recovery for the auto sector last month as the monthly new-vehicle sales decline eased to only 6.4 per cent.

However, in an interview with GoAuto last week, Mini Australia general manager Brett Waudby said the brand was hoping to finish off the year with a strong performance in the second half, on the back of its all-new Mini Electric and a number of special-edition models set to arrive before year’s end.

“For us, we have a positive outlook, honestly,” he said.

“We actually start getting (Mini Electrics) out on the road in August, our (JCW) GP is going out towards the end of this month and (there are) some allocations towards the end of the year, and we’ll be launching more editions into the market for the rest of this year.

Continued next pageMini Electric

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Continued from previous page

“We’ve got four editions coming along, a couple of JCW editions coming, so we’ve got a lot happening before the end of this year and nothing’s going to stop us moving forward, to be honest.”

The Mini Electric is sold out for the rest of the year with the first batch of 100 units already spoken for, meaning prospective customers will have to wait until 2021 to secure their own version of the brand’s first zero-emissions model.

Mini Australia has also been happy with the local interest in the hot new $63,900 JCW GP, which is powered by a 225kW/450Nm 2.0-litre turbo-petrol engine – as seen in the BMW M135i – but limited to 65 units Down Under.

Furthermore, the updated Countryman small SUV is set to lob before year’s end, bringing revised exterior and interior styling, extra standard equipment, and improved Euro 6d-compliant engines.

When asked what has spurred Mini’s relatively strong performance in 2020, Mr Waudby said it could be attributed to a mix of forward orders arriving, the release of special editions

in the first half and the adaptability of Mini’s dealer network during the pandemic.

“We already launched two editions at the start of this year, we had our Stafford Edition on our Countryman and we also had another

(Sterling) Edition at the start of the year,” he said.

“We’ve seen a lot of forward orders arriving for us, and I just think as a brand we’ve been able to navigate this with the support of our dealer network.

“They have been huge in this in what we have been doing, focusing on online, we’ve been offering our customers obviously a booking process online, we offered the same for the BEV online, so I definitely think it’s helped us navigate a lot of what has happened during this time.”

Mr Waudby also said that Mini is

aiming to bounce back in 2021 as the effects of COVID-19 ease, saying that the resilience of the Australian market left him confident of a return to form.

“We’re looking for a quick bounce-back from what has happened right now, and one thing I

can say about the Australian market and Australian people is that they’re a resilient bunch,” he said.

“Having come over from Munich a couple of years ago, the Australian people here are amazing, they’re always up for a challenge and I think

we’re going to get past this COVID quickly.

“The government is doing the right thing, and 2021 is definitely going to be a rise for us.”

Recovery hooks – page 13

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By ROBBIE WALLIS

TOYOTA is expanding its reach into all corners of the SUV market, unveiling the Corolla Cross small crossover last week ahead of an Australian launch in the second half of 2022.

Revealed in Thailand, the Corolla Cross is built on the same TNGA-C platform as the popular Corolla hatch and sedan but offers a higher ground clearance and unique interior design.

The second ‘Cross’ model unveiled by Toyota this year after the Yaris Cross (due late 2020), the Corolla Cross will join the swelling ranks of compact crossovers/SUVs from the market-leading Japanese brand that also include the C-HR and RAV4.

From the outside, the Corolla Cross features a broad, blacked-out grille flanked by LED lights that look like a flipped version of the arrangement on the Supra sportscar.

Black cladding around the lower skirts of the vehicle and roof rails give it the look of an SUV, while at the rear the tail-lights resemble the related Corolla sedan.

Toyota has revealed few concrete details of the Corolla Cross, promising “excellent” luggage space, and active safety equipment

from the Corolla range. The new SUV will be offered with

the choice of petrol or petrol-electric hybrid powertrains, as found on the regular Corolla.

The standard petrol engine will likely be a normally aspirated 2.0-litre four-cylinder unit, good

for 125kW/200Nm and driving the front wheels via a continuously variable transmission.

The hybrid grade will likely consist of a 1.8-litre Atkinson-cycle petrol engine producing 72kW/142Nm, combining with a 53kW/162Nm electric drive motor

for a maximum output of 90kW.Toyota is yet to reveal whether

it will offer all-wheel drive on the Corolla Cross for some extra SUV credibility.

FULL STORY: CLICK HEREChanging of the guard – page 15

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By NEIL DOWLING

HOME energy of the future could be as close as the car in your garage as Nissan last week unveiled plans for a trial using its electric Leaf hatch to put electricity back into the grid.

The Australian Renewable Energy Agency (ARENA) is funding a $2.4 million trial of vehicle-to-grid (V2G) charging systems with the aim of seeing how two-way charging can help energy needs and, at the same time, pay car owners for the electricity generated.

The idea isn’t new. Nissan has V2G capability in Japan and Tesla has integrated V2G technology into its Model 3 and has applied for an electricity licence in the UK.

The technology centres on modifying the EV’s charger so that it can become bidirectional. This

allows for power to be converted from AC to DC to operate the EV, but also to flow backwards, from the car’s battery to the AC side to create the DC-AC inverter which gives it V2G capability.

For owners of EVs with this technology, it means a charged EV can download power to other devices, including a house. In the case where an EV is charged from a sustainable source such as solar during the day, power can be redirected to the grid at night and help to power a house.

The trial, called Realising Electric Vehicle-to-Grid Services (REVS), is being conducted by ActewAGL – a joint venture between ACT government agency ACTEW and energy provider AGL – which centres on replacing conventional

vehicles in the ACT government fleet with Nissan Leaf EVs.

Nissan will supply 51 Leafs that will be used during business hours but will be plugged in when not on the road.

ARENA said this allows for about 70 per cent availability for providing energy for the grid services.

The power generated by the EVs is targeted at maintaining the frequency of the electrical system – smoothing out the electricity

demand highs and lows – that is normally done by coal, gas and hydroelectricity power stations.

ActewAGL’s trial will be the first time that a fleet of vehicles using bidirectional chargers will supply the grid with this service, and the first time an EV fleet will be paid for providing electricity services.

It said that by testing new revenue streams such as V2G, it could improve the total cost of ownership of EVs and make the vehicles more attractive to prospective buyers.

In addition, ARENA said fleets make up more than half of all new vehicles sold annually in Australia and the results of this trial will help inform future procurement choices

of private and public sector fleet managers.

The ActewAGL trial will involve a consortium of academic, government, transport and electricity system partners including the Australian National University (ANU), Jet Charge, Evoenergy, SG Fleet, ACT government and Nissan.

Data from the trial will be used by the ANU to lead the development of a roadmap for the commercialisation of V2G technology for all stakeholders.

In addition, Jet Charge is leading the V2G movement by later this year marketing a bidirectional charger to EV owners in Australia.

FULL STORY: CLICK HERE

Aussie V2G trial

Nissan’s Leaf at centre of $2.4 million ACT trial studying how EVs can help charge electricity grid

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By ROBBIE WALLIS

AUDI has revealed the Sportback version of its Q4 E-Tron all-electric SUV in pre-production guise, which will join the ‘regular’ Q4 E-Tron when both go into series production in around 12 months’ time.

Audi Australia says the Q4 twins are under consideration for Australia, with the company currently set to launch its first-ever EV, the standalone E-Tron and E-Tron Sportback, in September priced from $137,700 and $148,700 plus on-road costs respectively.

Dimensionally, the Q4 pair are slightly smaller than the E-Trons and slot in between the Q3 and Q5 in Audi’s model range – hence the name Q4 – with the Sportback marginally longer and lower to the ground than the wagon. Width and wheelbase are identical.

Like the E-Tron, the Q4 is built on Volkswagen Group’s MEB electric architecture, with Audi claiming the new offering will have the interior space of a C-segment vehicle despite its smaller stature.

Audi AG chairman of the board of management Markus Duesmann said the Q4 would represent Audi’s first EV aimed at achieving high sales volume.

“The E-Tron was our first car into our journey into e-mobility, while the E-Tron GT, which I like a lot,

will be a sportscar and a new Audi icon,” he said.

“The Q4 E-Tron along with the Sportback version will be our first premium electric volume SUV, and the gateway into the progressive, premium segment.

“They give our customers what they want, featuring Audi’s most popular body style, the SUV and the Sportback, combined with the highest level of functionality and state-of-the-art technology.”

The Sportback features the same zero-emissions powertrain as the Q4 E-Tron, namely a twin electric motor system with a combined output of 225kW/460Nm, paired with an 82kWh battery pack stored underfloor.

The permanently excited synchronous motor fixed to the rear axle produces 150kW/310Nm, which does the bulk of the work under normal driving loads. At the front, the second motor –

asynchronous this time – adds 75kW/150Nm.

Sprinting from standstill to 100km/h takes a claimed 6.3 seconds, while top speed is limited to 180km/h.

Driving range is pegged at 450km on the WLTP cycle, with the battery able to be charged to 80 per cent capacity in 30 minutes when using a 125kW charger.

FULL STORY: CLICK HERE

E-Tron expansion

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By ROBBIE WALLIS

MAZDA Australia is preparing to introduce its innovative SkyActiv-X compression-ignition mild-hybrid powertrain to Australia, offering it first on the Mazda3 small car and following soon after with the CX-30 compact SUV.

The Mazda3 X20 Astina will enter showrooms in August priced from $40,590 plus on-road costs.

It will be available with either a manual or automatic transmission (the latter adding $1000), pricing it $3000 north of the 2.5-litre petrol G25 Astina.

Meanwhile, the CX-30 X20 Astina AWD will follow a month later in auto-only guise from $46,490 plus on-roads, placing it atop the CX-30 range and, again, $3000 above the equivalent petrol grade.

The 2.0-litre engine uses compression ignition typical of a diesel, but with a petrol engine which the Japanese manufacturer says helps blend the high-revving character of a petrol engine with the fuel efficiency and torque of a diesel.

Capable of both spark ignition and compression ignition, the engine can utilise the two types of combustion while operating in tandem.

To further maximise fuel efficiency, the engine features an integrated belt-driven starter-generator and 24-volt lithium-ion battery which assists the engine

and recoups lost energy during deceleration.

The arrival of SkyActiv-X marks the first hybrid offering in Mazda’s local line-up and is part of the car-maker’s corporate goal to reduce well-to-wheel emissions by 50 per cent from 2010 to 2030.

Mazda Australia is yet to confirm power and torque figures for the SkyActiv-X engine, however in overseas markets the 2.0-litre unit is good for 132kW at 6000rpm and 224Nm at 3000rpm, while drinking as little as 5.4 litres per 100km on the WLTP cycle when under the

bonnet of the Mazda3.Its power output places it above

the existing 114kW/200Nm 2.0-litre unit and below the 139kW/252Nm 2.5-litre engine, with the benefit of superior fuel economy.

For reference, the 2.5-litre engine sips 6.6 litres per 100km in the Mazda3 G25 Astina hatch when teamed to an automatic transmission.

“Mazda is committed to reducing real-world emissions by looking at every part of a vehicle’s emissions footprint, from its production through to where the fuel that

powers it comes from, and how a vehicle is disposed of at the end of its life,” said Mazda Australia managing director Vinesh Bhindi.

“With every customer’s circumstances being unique, we need to offer a variety of ways to reduce vehicle emissions to suit individual needs and lifestyles.

“SkyActiv-X offers customers a lower emission engine option, while retaining the same joy of driving that Mazda vehicles have always offered.”

Mazda3 Turbo – next page

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By CALLUM HUNTER

MAZDA has officially detailed its long-anticipated return to the hot small-car segment, with its US subsidiary last week divulging all key specifications of its new all-paw Mazda3 2.5 Turbo.

Contrary to details contained in the Mexican reveal earlier last week, Mazda’s new pocket rocket will be armed with 186kW of power and a mountainous 434Nm of torque – 16kW/14Nm more than initially thought.

That hefty torque figure shoots the 2.5 Turbo straight to the top of the tables in terms of pulling power among the current crop of mainstream hot hatches, with its nearest rival being the recently launched Ford Focus ST with 420Nm.

However, the Ford fights back with a higher kilowatt count

(206kW), as does the rabid Honda Civic Type R (228kW), Renault Megane RS (205kW) and Hyundai i30 N (202kW).

In terms of the immediate competition, only the 180kW/380Nm Golf GTI is left wanting in either respect.

The secret to this all-conquering torque figure is a tuned version of Mazda’s familiar 2.5-litre SkyActiv-G turbocharged four-cylinder petrol engine, as found under the bonnet of the bigger Mazda6 sedan and wagon, and the CX-5, CX-8 and CX-9 SUVs.

Mazda does specify, however, that these outputs are only possible when the engine is running on premium unleaded fuel (93 octane in the US, 98 RON here).

FULL STORY: CLICK HERE

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By CALLUM HUNTER

PEUGEOT Citroen Australia (PCA) has confirmed the new-generation Peugeot 2008 compact SUV for Australia, with the stylish little soft-roader due here later in the year.

According to PCA PR and product manager Daniel Khan, the 2008 will arrive on Aussie soil in the fourth quarter with “all drivetrains including the full-electric 2008” under consideration.

Dubbed the e-2008, the electric version of the 2008 is powered by the same 100kW/260Nm electric motor and 50kWh lithium-ion battery pack as the closely related e-208 hatchback available overseas with a claimed range of up to 310km.

Other powertrains in the range

consist of three versions of a 1.2-litre three-cylinder petrol engine mated to either a six-speed manual transmission or eight-speed automatic, the most potent of which develops 115kW.

The final option is a 1.5-litre four-cylinder diesel mill mated exclusively to a six-speed manual.

Underpinned by PSA Group’s Common Modular Platform, the new 2008 measures 4300mm long, 1700mm wide and 1540mm, with the extra length (+40mm) catering for a bigger 434-litre boot.

While local pricing and equipment levels are yet to be finalised for Australia, three trim levels are being offered in Europe: Active, Allure GT-Line and GT.

FULL STORY: CLICK HERE

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By CALLUM HUNTER

LEXUS has treated its flagship LS sedan to a comprehensive update for the 2021 model year, gifting the big, luxurious four-door flagship a raft of upgrades and improvements that boost comfort and safety.

Suspension, styling, cabin layout, powertrain response, efficiency, sound proofing and advanced safety systems have all been tweaked or enhanced, with the most notable comfort-oriented change being the newly developed adaptive suspension solenoids designed to reduce damping forces.

With the damping softened, Lexus says the LS will rely a little more on the sidewall stiffness of its run-flat tyres and the rigidity of its stabiliser bars to maintain its dynamic ability but that the whole set-up has been

optimised to do exactly that.Under the bonnet, the 3.5-litre

twin-turbocharged V6 petrol engine in the LS500 has been given more low-end torque – although the brand does not specify how much – to improve responsiveness “at often-used driving speeds”, while the 10-speed automatic transmission has been tweaked to improve shift timing with “a wider acceleration range for each gear”.

The V6 hybrid set-up in the LS500h has also been given a workover to tap more readily into its electric power for smoother and faster acceleration.

The engine mount internals in both variants have been upgraded, too, with softer internals designed to further reduce engine vibrations. These have also

undergone “active noise control and engine sound enhancement tuning” for improved quietness.

Visually, the facelifted LS is distinguished by its subtle new adaptive LED headlights, darkened mesh grille, side vents behind the front wheels and darkened tail-light trim.

Inside the cabin is a new 12.3-inch touchscreen display

for the infotainment system, digital rearview mirror, deeper-set upholstery stitching and new vibration-fighting urethane padding in the seat cushions.

The buttons on the centre console and multifunction steering wheel now have a piano-black finish with contrasting white text and symbols for increased visibility and elegance.

On the technology front, Lexus

will launch the updated LS with its ‘Teammate’ semi-autonomous driving system and driver assistance suite.

According to Toyota Motor Corporation Advanced R&D and Engineering Company executive Ken Koibuchi, the system comprises two main modes: Advanced Drive and Advanced Park.

FULL STORY: CLICK HERE

Lexus LS update

Cabin comfort, refinement and tech overhaul headline major upgrade for 2021 model year

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By ROBBIE WALLIS

BRITISH start-up Ineos Automotive has revealed its first-ever model, the boxy Grenadier off-road SUV, which takes a back-to-basics approach aimed squarely at 4x4 enthusiasts.

Although the brand does not mention it anywhere, the Grenadier – which is due for release in Australia early in 2022 – is quite clearly designed to be the spiritual successor to the pre-2016 Land Rover Defender, giving fans in the UK the option of a homegrown SUV with true 4x4 heritage.

Ineos Automotive is founded by Sir Jim Racliffe, founder and majority owner of petrochemical group Ineos, and the Grenadier is named after the London pub where the idea to build the tough off-roader was born.

Built from the ground up by Ineos’

team of engineers, the Grenadier is underpinned by a ladder-frame chassis – the best option for strength, payload and towing capacity – built from high-tensile steel.

Like the Defender and Mercedes G-Wagon of old, the Grenadier is also underpinned by rudimentary but robust front and rear solid axles, with five-link suspension and coil springs on all four corners.

Once the blueprint for off-roaders, the ladder-frame/solid-axle combination is becoming increasingly rare these days, offered on only the most extreme 4x4s such as the Toyota LandCruiser 70 Series, Jeep Wrangler and Suzuki Jimny.

Overseas reports last week indicated that Ineos is in discussions with Daimler to use its factory at Hambach, France, to build the

Grenadier, with the plant currently used to build Smart cars.

This would nix the Ineos’ current plans for chassis manufacturing in Portugal and final assembly in Wales.

From an exterior design perspective, the similarities to the Defender are unmistakeable, with a boxy, five-door SUV profile that sports an unapologetically utilitarian look.

At the front, the Grenadier features circular LED headlights, a flat, vertically oriented bumper, straight grille slats and a domed bonnet that leaves no question as to its inspiration.

Like the Defender, the Grenadier also features a prominent shoulder line, flared wheelarches and a rounded roof edge, with the roof

designed to be able to carry a load without the use of a rack.

At the rear, the largest change from the Defender is the inclusion of a full-width split barn door that provides easier access and can be used to avoid constantly opening the door mounted with the heavy spare tyre.

Tow hooks and bash plates feature front and rear, while the Grenadier sits on steel rims with BF Goodrich all-terrain rubber.

The five-door Grenadier wagon looks to be the flagship model, however images also show a rendering of a dual-cab pick-up with a tub-style rear – similar to a Defender 110 dual-cab pick-up – which will follow the wagon.

It is not yet known whether Ineos will also sell a two-door short-wheelbase version like the Defender 90, or an extended-wheelbase or single-cab pick-up.

The interior design is yet to be revealed but Ineos is promising that the Grenadier will feature 21st century levels of equipment and active safety features.

Ineos is yet to go into detail on powertrains, however it is understood the company will use 3.0-litre turbocharged six-cylinder petrol and diesel engines from BMW in a reduced state of tune to enhance durability.

FULL STORY: CLICK HERE

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By NEIL DOWLING

BUYING vehicles with Australian-made options and accessories could put millions of dollars back into local businesses if government tender processes were changed, according to the aftermarket sector’s peak representative body.

In a plea to government departments and authorities, the Australian Automotive Aftermarket Association (AAAA) said the policy on purchasing and leasing government fleet vehicles should split vehicles and vehicle options and accessories.

AAAA CEO Stuart Charity said all vehicles purchased or leased by government departments and authorities are imported and that some government entities are

ordering vehicles with pre-installed accessories and upgrades.

“This means that optional extras such as roof racks, bullbars, ute canopies and trays and towbars are imported products,” he said.

“This is despite Australian product equivalents that are both cost competitive and generally superior to imported accessories.

“We would like to see government policy stating that options added to the vehicle should be purchased

from Australian producers, where these exist.”

The AAAA has taken its concerns to federal minister for industry, science and technology Karen Andrews, and with every state premier.

It is seeking a policy that gets

government and government authorities to support buying Australian-made components.

Mr Charity said it was difficult to put an exact dollar figure on vehicles coming into the country already optioned up.

“You could imagine a Toyota HiLux coming into the country and having a canopy, towbar and roof racks added in Thailand,” he said.

“That’s thousands of accessories

that could have been added in Australia using Australian-designed products.

“Add that up with the thousands of cars purchased or leased by federal and state governments and it runs into the millions of dollars.

“We are world-class producers of automotive aftermarket products, highly respected around the world, but the current government practices are shutting us out.”

Mr Charity said the only state government currently helping the cause is South Australia, which has adopted an Industry Participation Policy.

“This resulted in fleet vehicles being purchased without any accessories fitted,” Mr Charity said.

“As a result, our towbar producers, barrier protection and sidestep manufacturers in South Australia are fitting out hundreds of SA fleet vehicles.”

Mr Charity said the federal government is now changing its COMCAR fleet, replacing its 142 Holden Caprices with the Toyota Camry Hybrid and BMW 6 Series GT sedan.

“We have worked with and spoken to many government fleet managers and, in our experience, the majority are ordering vehicles with, for example, the towbars already fitted before the vehicles are delivered,” he said.

FULL STORY: CLICK HERE

Fleet policy push

AAAA says government fleet tender processes shut out Australian accessory manufacturers

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PAGE 13

GoAutoNewsMarket Insight

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By TERRY MARTIN

PREMIUM car brands look set to play a central role in the Australian motor industry’s recovery from the severe downturn caused by the coronavirus pandemic, as evidenced by strong sales results across a broad range of prestige marques in June.

While light-commercial vehicle sales were a driving force behind the June result, pushing up 8.6 per cent to more than 100,000 units, the premium car sector – accounting for about 16,000 units last month – were no less impressive, climbing 31.8 per cent across the various higher-tier passenger car segments (including all sportscars) and SUV categories.

Light, small, medium, large, sports… substantial gains were seen across the premium market in almost every class of vehicle, with double-digit growth spurts in nine out of the 13 segments, 50+ per cent rises for small and light cars and small SUVs, and a 32.5 per cent upswing for the biggest-selling segment, mid-size SUVs.

Negative results were found in only two niche corners of the market – limousines over $100,000

(down two units) and sportscars over $200,000 (down 66 units).

The June result has helped fuel widespread expectation among the car companies and industry observers that the trend will continue as wealthier Australians, forced to curb their spending on overseas travel as a direct result of the COVID-19 pandemic, shift to luxury vehicle purchases.

Several premium brands are also in the midst of major product renewal programs, which is clearly helping stimulate demand.

The volume-selling prestige marques were the standout performers last month, led by Mercedes-Benz Cars racking up 4437 sales for a 31.4 per cent increase on June last year and eighth position across the entire market, ahead of Nissan, Subaru, Honda and various other mainstream brands.

This was a return to form for Mercedes after deferring to BMW in April and May, and finding its sales for the year to date down 20 per cent before the end-of-financial-year surge that now sees it only down nine per cent at the halfway

mark of the year. By comparison, the overall

industry is down 20.2 per cent. BMW might have reassumed

second position in June, but its 3307 sales was an all-time monthly record for the Bavarian brand in Australia,

up 32 per cent on the corresponding month last year and taking the marque into positive territory for the year to date by 1.6 per cent.

The company was quick to point out that last month’s result capped off a remarkable second quarter in

which BMW posted 26 per cent growth compared to the first quarter of the year, defying the pandemic-related restrictions afflicting the broader market and economy.

FULL STORY: CLICK HERE

June sales growth in premium car sales reflectspositive industry outlook for second half

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June YTD

Leading premium brand sales performance in Australia this year

-60

-40

-20

0

20

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60

80

100

120

140

Mercedes Cars

BMW Audi Lexus Land Rover

Volvo Mercedes Vans

Ram Porsche Mini Jaguar

Source: VFACTS

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PAGE 14

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By NEIL DOWLING

CALIFORNIAN electric vehicle start-up Fisker Inc has received $US50 million ($A71.5m) in financing to move to the next stage of developing its all-new Ocean SUV, keeping it on track for a 2022 launch.

The funds, from a private investment company in the US, further confirm Fisker’s plan for the EV SUV and push the Ocean closer to market and into the hands of more than 22,000 people from 116 countries that the company claims have paid a deposit or expressed interest in the model.

Fisker Inc, headed by chairman and CEO Henrik Fisker, has also announced the appointment of key executives.

These are Burkhard Huhnke as chief technology officer, who was previously vice-president of e-mobility for Volkswagen America and vice-president of automotive at chip-maker Synopses.

The second appointment is Simon Sproule as part-time communications adviser to the CEO.

Mr Sproule is the vice-president of communications for Toptal, an elite network of the world’s top talent in business, design and technology.

Up until recently, Mr Sproule was chief communications officer at Fiat Chrysler Automobiles, and had only spent a few months at FCA after previously serving for six years as

chief marketing officer and vice-president of Aston Martin Lagonda.

He is also a former vice-president of marketing and communications for Tesla, and served for about five years as vice-president of global marketing communications at Nissan.

Fisker Inc plans to sell the Ocean SUV from 2022, priced from $A53,624. It will be offered with four different package options to be detailed later this year, and will also be available as a lease from $A542 a month with a $A4290 deposit.

Full specifications of the Ocean are still to be released, although preliminary details point to a driving range of about 450km from an 80kWh battery pack. Solar panels

on the roof can help recharge the vehicle’s battery systems and are designed to provide up to 1600km of additional driving range per year.

Both two- and all-wheel-drive versions will be available, with the electric powertrain offering an output of more than 225kW. An “ultra-high performance” version is also in development, with Fisker targeting 0-60mph (0-97km/h) acceleration of less than three seconds.

Recharging the battery from 15 per cent to 80 per cent capacity is expected to take only 30 minutes when plugged in to a 150kW charger.

Unveiled earlier this year at the CES in Las Vegas, the Ocean also boasts a

body that uses recycled plastic from ocean debris, while waste generated during tyre manufacturing will be applied to sections of the interior such as the boot.

The interior is apparently fully vegan, with suede-look material made from recycled plastic, bottles and T-shirts, and carpet derived from abandoned fishing net waste.

The cabin also features a ‘California Mode’ to open all windows and roof panels with one button.

The Ocean measures 4568mm long, 1900mm wide and 1590mm high, making it slightly smaller in stature to the Tesla Model X.

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PAGE 15

GoAutoNewsPersonnel

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By TERRY MARTIN

NEERAJ Lala has taken over as chief executive of Toyota New Zealand, replacing Alistair Davis who has retired from the post after 12 years – and more than 40 years of service with the brand.

While Mr Davis will maintain a connection with the company as a non-executive chairperson on Toyota NZ’s board of directors, Mr Lala has stepped up from his previous role as chief operating officer to become only the fifth local CEO since the Japanese auto giant was established in New Zealand 50 years ago.

Born and bred in Wellington, Mr Lala was an obvious candidate for the role, bringing more than two decades’ experience at Toyota since signing on as an internet development co-ordinator in 1998

after graduating with a Bachelor of Commerce from Victoria University.

He has subsequently worked across a broad range of business areas including IT, marketing, product planning and new and used vehicle sales, and spent three years in an executive leadership program with Toyota Motor Sales in the United States.

The company said that upon his return from Los Angeles in 2018, Mr Lala has “been instrumental in driving transformational change at Toyota” which is the top-selling brand in the New Zealand market, just as it is in Australia.

It also said that the wholly owned subsidiary of Toyota Motor Corporation “prefers to promote from within and maintain stability through long-tenure chief executives”.

In a statement, Mr Lala, who is a long-time sportscar enthusiast and also holds an Executive MBA from Massey University, said he was excited to take the helm at a time when Toyota was transitioning from a traditional auto-maker to a mobility company focused on future technologies.

“It has been a privilege to serve under Alistair’s leadership over the past decade and I appreciate his encouragement of my career development at Toyota,” he said.

“Alistair’s focus on people, culture and sustainability is well-embedded in the company and in the leadership team.

“I intend to carry on with that

core focus, while advocating for an even better use of data and digital assets to get closer to our customers, particularly in these challenging and competitive times.”

Mr Davis said Mr Lala was well-qualified for the position and described him as a person “who thrives on challenges and has the energy and vision to inspire and lead the company forward into a changed world”.

“In Neeraj, Toyota has a well-prepared leader to take the company forward in the post COVID-19 economy. He is an advocate for new ideas when it comes to how auto-makers market and sell their products in the 21st century,” he said.

Fronting a corporate video as part of the marketing activity around his ascension to the top job, Mr Lala said: “The most exciting thing about the car

industry at the moment is we’re at a real crossroads – which way is the powertrain going to go … are we going to go hydrogen, are we going to go battery, are we going to go more hybrid-electrics, where is diesel heading, what’s the future of traditional gas?

“Cars and mobility is one part; access and ownership is another. Our industry is going to change completely. Previously, you may buy one car and own it for three years; now people want some flexibility, and I think we’re in a really strong place to be able to deliver that for our customers.

“So it’s a really exciting time to lead this company into the future with exciting new product, exciting new technology and exciting new mobility solutions for our customers.

“I’m really proud of where we’ve come from, but the future is looking really strong.”

CHANGING OF THE GUARD AT TOYOTA NEW ZEALAND

Alistair Davis (left) and Neeraj Lala

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PAGE 16

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By ROBBIE WALLIS

ALPINA Automobiles Australia has announced pricing and specification for its all-new XB7 seven-seat large SUV, with the luxury family hauler touching down locally in the first quarter of 2021 priced from $264,900 plus on-road costs.

The XB7 commands a sizeable $85,000 premium over the BMW X7 M50i on which it is based, and will wade into battle against the likes of the Bentley Bentayga

V8 ($334,700), Range Rover V8 Autobiography LWB ($284,410) and the upcoming Mercedes-Maybach GLS600, which arrives in Australia later this year.

When it touches down locally, the XB7 will be the most powerful X7 derivative available, while also featuring more torque than any of BMW’s SUV offerings, in line with Alpina’s emphasis on low-down pulling power.

The 4.4-litre twin-turbocharged V8 has been tuned to produce 457kW from 5500-6500rpm (only 3kW shy of the X5 M Competition), while peak torque is rated at a healthy 800Nm, from 2000-5000rpm.

Featuring twin-scroll turbos with 54mm turbines, the XB7 can sprint

from standstill to 100km/h in a brisk 4.2 seconds, on the way to a top speed of 290km/h.

To help deal with the extra output, the transmission cooler is 120 per cent larger than on the X7 M50i, while two large external coolers offer 45 per cent greater cooling.

Official combined-cycle fuel consumption for the V8 bruiser is pegged at 12.0 litres per 100km, while CO2 emissions stand at 275

grams per kilometre.The V8 is mated to an eight-

speed ZF automatic transmission, reinforced to handle the extra torque, with drive sent to all four wheels via a tweaked version of BMW’s rear-biased xDrive all-paw system.

Torque distribution is fully variable from front to rear, while handling is aided by the fitment of a limited-slip differential on the rear axle and four-wheel steering.

Two-axle air suspension with active roll stabilisation comes as standard, with Alpina’s engineers adding extra front-axle coil springs to aid chassis control.

Braking comes courtesy of 395mm front and 398mm rear discs with signature blue callipers, while compound brake discs can be optioned.

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Alpina’s all-new flagship SUV locked in for locallaunch early next year, priced from $264,900

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By NEIL DOWLING

FORD will next year open one of Australia’s biggest automotive parts distribution centres to cater for predicted increases in demand for parts for existing vehicles and for future-generation models including electric vehicles.

The 10-year lease on the logistics facility will be Ford’s biggest investment in its parts operation for 60 years.

The purpose-built centre will be constructed by Texco in the Merrifield Business Park in Mickleham, 29km north of Melbourne’s CBD, and will cover 51,480 square metres. It is planned to be the biggest business park in Victoria.

It will comprise a 50,580-square- metre warehouse and 900-square- metre office set on a site of 8.8 hectares. It will have a 5-Star green energy rating.

The building will have a 14.6m clearance height to the warehouse, a cafeteria and a walking path within the business park.

Australian developers MAB and Gibson Property Corporation – which only a day after participating in the Ford announcement then sold the site to Dexus Australian Logistics Trust for $73.5 million – said the 415-hectare Merrifield park, which has already been taken up by major businesses including Dulux and D’Orsogna, was close to major road, rail and airport infrastructures and accessible to eastern seaboard ports.

The Merrifield facility will be the fifth major centre for Ford in Australia and the fourth for Victoria. It also has operations in Broadmeadows, Geelong, Lara and Richmond, and employs about 2500 engineers, designers and technical specialists to develop vehicles for 180 markets.

Ford Australia and New Zealand president and CEO, Kay Hart, said the addition would give customers the best experience possible and that meant an efficient parts supply for dealers and Ford owners.

Continued next page

Finance enquiry remains strongPenetration of 62 per cent is achievable but serviceability of new loans is ‘an unknown’

Victoria to get energy hubViva Energy outlines plans for an LNG, hydrogen and solar site in Geelong

New distribution complex will become one of Australia’s biggest car parts facilities

Ford expands Australian footprint

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Not just a view from the top.

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Continued from previous page

“With space and great transport infrastructure links, this new site will enable us to store and distribute the parts we need for the current and future generations of vehicles including electrified vehicles,” she said in a statement.

“It will also give our team the space it needs to grow our business into the future.”

The business park will be bigger than the Melbourne CBD and cover 415 hectares and generate up to 25,000 jobs.

Merrifield is expected to become the biggest mix-use community in Victoria and anticipated to have 4000 residents when completed.

Its shopping hub will open its first retail stage later this year with

a Coles supermarket, followed in the next year with a primary school, community centre and sports ground.

Meanwhile, Holden has also vacated its 191-197 Salmon Street headquarters in Port Melbourne, putting the 21,738-square-metre office complex on the lease market. The property was built specifically for Holden by Mirvac in 2005 and is now owned by Altis Property Partners.

Holden’s remaining parts and service administrative staff and GMSV managers will move around the corner to an office formerly occupied by the Holden College. The move is said to involve a $1 million renovation.

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By JOHN MELLOR

THE Australian auto finance market has remained strong during the first half of this year with online enquiries for car loans in May at an all-time record on the DealerCell loan approvals platform.

But the retail auto loans industry remains in a state of alert as it adjusts to new unknowns in the ability of buyers to service their loans into next year.

Mark Lancaster, CEO of DealerCell, a sales enablement platform for an auto finance approvals system for dealers, told GoAutoNews Premium: “There is no doubt things have tightened up in terms of competition for loans but we are still settling a lot of finance deals. Enquiry is strong.”

He was commenting on the state of retail finance following a

record enquiry for car loans on the DealerCell online platform in May – even higher than in June.

But he said that while the retail finance industry has spent the past 18 months absorbing the new commission rules and responsible lending loan oversight, it was also seeing the changing imperatives from some big lenders and now new question marks over loan serviceability with the backwash on jobs from the COVID-19 pandemic.

“So there have been multiple things happening and the timing of COVID on top of that has not been that great,” he said.

“Serviceability of loans is always a big issue but when you have all

these people on reduced hours and on JobKeeper allowances, then all of a sudden the serviceability of loans is harder to meet so then approvals are harder to obtain.

“If you think about it, in March, a financier was only just learning

what JobKeeper was. So, in turn, they had no lending policy to apply to someone in that position.

“So there has been disruption to the business from all angles.

“Overall I think serviceability is the biggest challenge that we face at the moment and it will be that way until we know what is going to happen after September. So there are still a lot of unknowns out there.”

Mr Lancaster said that the finance penetration for buyers using DealerCell to get a finance quote for a dealer was running consistently at 62 per cent.

“That penetration is achieved because the finance quote is put to the customer early in the process. It is entirely customer self-driven on our platform. No dealership staff involved.

“They go to our site, our dealer’s site or a classified website, they click on our tool and that tool integrates with the dealer’s financier and returns a personalised repayment quote. We show them online exactly the quote they would get in the dealership.

“So, on all our leads, one-in-three buy a car and two-in-three (of them) buy finance. Those numbers are

very encouraging and are holding strong,” he said.

DealerCell encourages dealer sales staff to use its system to generate finance quotes first thing in the sales process for walk-ins, or immediately after they receive an online lead.

Mr Lancaster said the buyers can get finance quotes from the DealerCell platform via the dealer’s website, via Carsales, for example, or from an SMS response to a lead sent from the dealer where the customer can do the quote themselves.

He said: “We have found that if we get in early and put finance options in front of customers, we find that any of those avenues mentioned (above) comes out at a penetration rate of 62 per cent.

Continued next page

Penetration of 62 per cent is achievable but serviceability of new loans is ‘an unknown’

Finance enquiry remains strong

Mark Lancaster

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Continued from previous page

“We find if they miss those steps, and the customer gets into the dealership and buys a car the traditional way, and they go through a business manager in the traditional way towards the end of the sales process, then the finance penetration is 35 per cent. It is, and has been for some time, consistently 35 per cent. It never changes.

“The data shows the buyers want an indication of what their trade-in is worth, if they have one, and they want an indication of what their actual finance repayment will be before they decide to invest the time to come and see a dealer.”

Mr Lancaster said that, these days, the bank-based financiers do not have as strong an appetite for car loans as before and this was because they are seeing that they can make more on cost of money in markets like housing than in cars. Or, where there was an imperative to improve the balance sheet of a lender, for example.

“This was reflected by the tendency by these financiers to only take the really good loans. However, we have newer players coming into the market and because they are still growing their finance books they are still buying business.

“So there are ebbs and flows. But with Esanda going into Macquarie and Capital going into St George we are probably missing another mainstream player and the market is less competitive than it was; although lately the captive financiers have been growing their white label businesses.”

Mr Lancaster said that he has seen an increased interest in subscription plans.

“But even there it comes down to your ability to meet serviceability; although you do have the flexibility to step back with a month’s notice if the payments cannot be met,” he said.

FULL STORY: CLICK HERE

“Serviceability of loans is always a big issue but when you have all these people

on reduced hours and on JobKeeper allowances, then all of a sudden the

serviceability of loans is harder to meet so then approvals are harder to obtain.”

– CEO of DealerCell, Mark Lancaster

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By NEIL DOWLING

VIVA Energy, one of Australia’s biggest energy companies and the licensee of the Shell brand in Australia, will build a liquified natural gas facility, solar generation, hydrogen manufacture and a new fuel storage capability at Geelong under plans announced at its annual general meeting.

The 235-hectare development, now in its final design stage, will create an energy hub that would increase the supply of natural gas to Victoria and lead to initiatives such as hydrogen production and gas-powered electricity generation.

Viva Energy Australia CEO and managing director Scott Wyatt said the development can support the transition to a lower carbon energy future and provide

potentially valuable new business opportunities for the company.

“At the centre of the energy hub is a proposed LNG import terminal,” he said at Viva’s annual general meeting.

“This would provide a cost-effective method to bring additional gas to the south-east coast markets and meet an expected supply shortage from 2023.”

It is the second project of its type planned for Victoria after AGL announced it would build a floating LNG import terminal in Western Port Bay south of Melbourne.

The Geelong refinery, built in 1954 by Royal Dutch Shell and producing 128,000 barrels of liquid fuel a day, supplies about 10 per cent of Australia’s demand. It has access to port infrastructure

to support a floating storage and regasification vessel.

Mr Wyatt said natural gas was a key transition fuel which can provide important baseload power as coal generation declines, as well as important firming capacity to support renewables as they come online.

He said Viva had progressed with engineering feasibility studies and started inviting potential partners to participate.

Geelong is also seen as an ideal site for additional crude and product storage and meets calls by the federal government to have oil reserves in Australia.

The government earlier this year bought about 4.2 million barrels of crude oil, equivalent to almost five days of supply on the Australian market, from the US. It is stored in locations along the Gulf of Mexico coastline and, when needed, will take about three weeks to reach Australia.

Viva’s existing refinery at Geelong produces more than 50 per cent of Victoria’s liquid fuel requirements and is Australia’s only manufacturer of bitumen, hydrocarbon solvents and avgas.

Mr Wyatt said that Viva has significant room for expansion “not only at Geelong, but also across our infrastructure and terminal network throughout Australia”.

FULL STORY: CLICK HERE

Viva Energy outlines plans for an LNG, hydrogen and solar site in Geelong

Victoria to get energy hub

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By NEIL DOWLING

NOTHING has changed regarding consumers’ ability to purchase and maintain their vehicles as Melbourne returns to Stage 3 lockdown, said the state’s peak automotive body.

The Victorian Automobile Chamber of Commerce (VACC), which represents more than 5000 auto businesses, said the lockdown did not affect the majority of automotive operations across the state and that they will remain open.

VACC CEO Geoff Gwilym said: “The automotive industry remains open for business.

“So, whether Victorians wish to purchase a vehicle, or service and maintain the vehicle they already own, their local automotive business is ready and equipped to provide the best and safest service possible,” he said.

“Car, motorcycle and farm machinery dealerships; automotive repair workshops; body repair businesses; tyre dealerships: every sector in automotive remains open and thousands of businesses remain ready to service the needs of Victorian motorists.”

Industry advice shows that those businesses that remain competitive are winning compared with those that hibernate.

VACC spokesman David Dowsey said: “Those businesses that have remained active, have retained their marketing activities, and who have innovated and added new offerings, are going to do well in the long term.

“The VACC has been in close contact with its members offering a great deal of practical support,

through the provision of valuable information – particularly around industrial relations,” Mr Dowsey said.

“There has been lots of communication and marketing material provided, along with free counselling for members, which is making a big difference in the lives of a lot of people.”

Mr Gwilym said dealers were experiencing some confusion from government bulletins issued on workplace opening hours and

arrangements.“There were some queries over

the use of the term ‘essential’ being replaced with the word ‘necessary’ in government media and advice on COVID-19,” he said.

“Automotive is not restricted hence the term ‘necessary’. This is consistent with the notes in clause 6 of the stay-at-home orders,” he said.

“In the midst of major business closures across many sectors, most automotive-related businesses have

remained open, and, at the same time, have adapted to suit these difficult times.

“VACC member-businesses have access to the chamber’s comprehensive suite of information and support services, meaning they are up-to-date with the latest safety measures, including correct hygiene procedures and social distancing measures,” Mr Gwilym said.

FULL STORY: CLICK HERE

Proactive dealers can avoid viral setback by telling customers their doors are open

Melbourne auto firms still open

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By JOHN MELLOR

IN THIS fourth edition of Dealer Talks, our new podcast series brought to you by Gumtree Cars, in partnership with GoAutoMedia, we explored car finance and car subscriptions for dealers on the Road to Recovery.

Car finance is an area of dealer operations that has seen significant turmoil in the past couple of years with changes to sales commission structures, with stricter responsible lending rules and less appetite for loans from

the bank lenders. Now there is the pandemic.

And now car subscriptions are an additional revenue model for

dealers, particularly with those customers who are in an uncertain financial situation right now.

We talked to Mark Lancaster, the

CEO at DealerCell, and to Chris Noone, the CEO of Carly.

Mr Lancaster, who operates a finance loan approvals software platform for dealerships, shared

insights on the ebbs and flows of how the dealer finance market is performing.

He explained they were seeing some dealers achieve 65 per cent finance penetration by getting a finance quote at the start of the sale. Other dealers who continue to do the finance deal at the end of the process were stuck on

about 32 per cent penetration.Mr Noone talked about how

subscriber sales are an alternative to dealers selling their stock and that dealers get regular payments

while companies like Carly do all the logistics for them. Dealers are also being introduced to buyers who may not normally visit a dealership and they are becoming the contact point in the collection and changeover of cars.

We heard that financing enquiries are running at record levels and so are people signing up for subscriptions.

If there is a challenge it will be what the last quarter looks like as government assistance is wound back and the situation in Victoria washes through the national economy.

Buyers seek car loans at record levels as dealers see subscriptions as new source of funding

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By JOHN MELLOR

DEALER Solutions has moved to increase the competitive landscape in used car intelligence services in Australia with the introduction of AutoRadar which is designed to help dealers manage and price their used cars.

Developed over the past 12 months by Dealer Solutions, the platform borrows from the US-based vAuto used car intelligence system which was developed by well-known US used car guru, Dale Pollak, who toured Australia several years ago. vAuto is owned by Cox Automotive, and has 7000 customers.

Gillian Allen, product manager for AutoRadar, told GoAutoNews Premium that the AutoRadar development team was able to gain insights from the vAuto system.

“One of the advantages of being part of Cox Automotive is that we get to share information with our international colleagues. It was great to be able to gain insights from the vAuto team and to demonstrate AutoRadar to them and apply their feedback.”

Ms Allen said the AutoRadar team has been working with a number of large dealer groups around Australia which have been using the system “to make sure we delivered the right features for the Australian market”.

More than 100 separate dealers have been trialing the product.

Michael Sommerton, CEO of Cox Automotive Australia Retail Solutions, told GoAutoNews Premium that dealers had been calling for competition in the used car valuations and stock management space.

“The feedback we are getting from dealers is that they absolutely

welcome what we are doing and are excited there is a good quality product that established good competition in the marketplace.

“We developed AutoRadar because we wanted to give dealers a choice where, for example, they did not have to list on a particular online platform to get access to this kind of market insights data. They can now list anywhere they like and still get access to the data.”

Mr Sommerton said that

AutoRadar would be available to dealers at no cost for the first month and that dealers would be pleased with the very competitive price position AutoRadar has taken.

“We don’t underestimate the challenge but we are glad that now there is a challenger for dealers to move over to and particularly some choice,” he said.

Ms Allen said that because the core business of Dealer Solutions is managing the dealers’ online

classified listings for all its dealer clients, it has access to the extensive data it needs to analyse used car activity across Australia.

Dealer Solutions has nearly 2000 dealer clients and manages over 100,000 individual vehicle listings at any one time. It also has over 700 websites in their platform which provides valuable customer keyword search analysis.

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© 2020 KPMG, an Australian partnership. All rights reserved. 378288416ENT

You’re the most important person in the showroomKPMG’s Motor Industry Services Team puts you in the centre when we map out strategies for your business.

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[email protected] BrownSenior Manager Motor Industry Services KPMG

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By NEIL DOWLING

CREDIT rating firm Moody’s Investor Service is poised to downgrade its financial ratings of nine car-makers as it predicts a global car sales slump of at least 20 per cent in 2020 that will take several years to return to 2019 levels.

The agency downgraded Toyota, BMW, McLaren, Ford, Renault, Nissan, Honda and Tata. (See details below.)

In its latest corporate analysis, Moody’s said the pandemic has made the automotive industry “even more challenging” and will lead to it downgrading 40 per cent of car-makers as the virus adds to the industry’s already substantial challenges.

“We estimate light vehicle sales will slump at least 20 per cent in 2020 and will take several years

to recapture 2019 levels, with any turnaround slowed by a supply shock coming simultaneously with plunging demand,” it stated in its latest report.

“That view prompted us to put essentially the entire industry on review for downgrade and cut ratings of nine of the 22 auto-makers we rate over the last three months.

“Total debt downgraded was about $US130 billion, excluding the debt related to the car-makers’ captive finance businesses.

“Even with our expectations for a solid recovery in 2021 (around 11.5 per cent) and 2022, based on Moody’s latest Macroeconomic Forecast, it will be years before auto sales return to the 2019 level.

“The risk to our forecast for the rest of this year is to the downside

because it is predicated on a steady production recovery from factories that were closed for much of the second quarter.”

Moody’s said that the manufacturers in line for the credit downgrade had issues before the pandemic, including problems with their operations, lack of significant investments and major challenges to their market positions.

“In all cases, we felt the coronavirus outbreak and subsequent recession

would exacerbate these problems,” it said.

“Strengths of auto-makers with confirmed ratings offer a chance for speedier recovery.

“Most auto-makers were not downgraded. These companies generally had track records of operational strength, little need for major restructuring, strong positions in core markets, geographic diversity or a premium brand focus and enough liquidity to weather

even an extended downturn. “Despite limited downgrades, 18

of 22 auto-makers have negative or developing outlooks. This acknowledges the potentially severe damage the recession could do to operating performance and credit.”

It said that several car-makers were historically strong performers and are likely to remain industry leaders, such as Toyota and BMW.

FULL STORY: CLICK HERE

Credit rating agency says industry will not recover for ‘several years’

Moody’s downgrades nine car-makers

MOODY'S INVESTORS SERVICE CORPORATES

Pandemic adds hurdles to an already challenging race, spurs downgrades on 40% of rated carmakersThe coronavirus pandemic caused a sharp drop in economic activity around the world and auto manufacturing and sales are among thehardest hit. The virus outbreak adds to what were already substantial challenges for automakers and prompted us to put essentially theentire industry on review for downgrade. We downgraded nine of the 22 automakers we rate, or 40% of the global portfolio, betweenMarch 15 and June 17. Total debt downgraded was about $130 billion, but that figure excludes the carmakers' captive finance arms.Including those vital operations brings the total to about $310 billion.

Coronavirus, and efforts to suppress its spread, slashed vehicle demand while also causing disarray in the global supply chain andrelated distribution channels. We lowered our global light vehicle sales forecast in May and estimate sales will slump at least 20% thisyear – with at least a 25% drop in North America and a 30% decline in EMEA – from what was already a down year in 2019 (see Exhibit1).

Exhibit 1

Global auto sales projected to drop severely in 2020, after several years of declining growthGrowth rate of global auto sales

2.1%4.4%

2.4%-0.7%

-4.6%

11.5%

7%8.0%

2.1%4.4%

2.4%-0.7%

-4.6%

-20.2%

11.5%

5%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

2014 2015 2016 2017 2018 2019 Base Case 2020 Base Case 2021 Base Case 2022

Source: ACEA, CAAM, LMC, Moody’s estimates

Exhibit 2

Global vehicle demand unlikely to recover to even weakened 2019 level for yearsGlobal light vehicle forecast, with percentage breakdown by major region for recent years

14 15 16 16 16 16

5 5 5 5 5 5

16 17 18 17 17 17

2325

28 29 28 26

2827

27 28 2826

0

10

20

30

40

50

60

70

80

90

100

2014 2015 2016 2017 2018 2019 Base Case 2020 Base Case 2021 Base Case 2022

Units in Millions Western Europe Japan United States China Others

Source: ACEA, CAAM, LMC, Moody’s estimates

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.

2 30 June 2020 Automotive – Cross Region: Pandemic hurts auto demand through 2022, about $130 billion in debt downgraded

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By NEIL DOWLING

THE truck industry has termed the best-ever monthly sales record of June as “something quite special” as 4620 trucks and vans found new owners.

The Truck Industry Council (TIC) said it beat the June 2018 previous best of 4231 units.

However, while it appears to paint a rosy picture of the commercial vehicle sector, part of the picture isn’t in focus.

The Heavy Duty trucks segment was down 20.9 per cent and Medium Duty trucks fell 16.4 per cent in June.

The market was substantially buoyed by the small end of the truck sector that took advantage of the federal government’s instant asset write-off of $150,000.

The June 2020 tally for Light Duty trucks was 1583 units, surpassing

the previous monthly record of 1304 set in June 2018 and representing a 21.4 per cent increase.

The Light Duty van segment was the star performer in June with 1006 Light Duty vans delivered, beating the previous best result (June 2019 with 714 van sales) by an impressive 40.9 per cent.

The TIC said that while June 2020 was an all-time record sales month, it was entirely driven by Light Duty truck and van sales.

Overall, it said June bucked the recent COVID-19 trend of plummeting truck sales in Australia.

“While history shows that truck sales peak in June every year no doubt due to the tax benefits that exist at the end of each financial year, the June 2020 sales result was something quite special,” the TIC

said in its monthly report.TIC CEO Tony McMullan said

that the record, or near record, sales in both Light Duty segments “appears to be a clear indication of the effectiveness of the federal government’s instant asset write-off incentive of $150,000, coupled with the financial year end”.

“While the result has been of notable benefit for smaller trucks, it is clear that financial stimulus is required at the heavy end of the

truck market,” he said.Quarter two of 2020 showed

a slowing of sales in the Heavy Duty truck sector, down 23.0 per cent when compared to last year’s second-quarter sales.

In this second quarter, 2699 sales were recorded for April to June 2020. This was down on the second quarter of 2019 by a substantial 807 trucks.

Heavy Duty truck sales in the first half of 2020 are down 23.4 per

cent year-to-date with 4919 sales compared with 6422 in the 2019 corresponding period, representing a drop of 1503 trucks.

Mr McMullan said the TIC has called on the government to increase the instant asset write-off to $450,000 for heavy-vehicle specific purchases, saying that such action would stimulate sales in the Heavy and Medium Duty truck sectors.

FULL STORY: CLICK HERE

Best-ever month for light-duty trucks and vans but heavy truck sales still falling

Truck sales jump in June

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By NEIL DOWLING

MOTORCYCLE sales in Australia have gone ballistic with more than 10,000 extra sales in the first six months of 2020 compared with the same period in 2019 on the back of off-road bike and all-terrain sales.

The boom in off-road machinery is attributed directly to the asset write-off allowance and buyers avoiding impending new laws requiring rollover protection on all-terrain vehicles (ATVs) used mainly in primary industry.

Greater family activities during the pandemic with attention centred around motorcycles, particularly kids’ bikes, is also listed as a reason for the sales boom.

Road bikes, by comparison, fell in numbers compared with the same period last year. This was

despite some commentators saying motorcycle sales increased because of social distancing and the need for economical commuting.

The Federal Chamber of Automotive Industries (FCAI) reported that 52,838 motorcycles and ATVs were sold from January to June 2020, compared with 42,457 during the same period in 2019.

“This represents a strong 24.5 per cent increase in sales, a bright spot in an economic environment that has been predominantly negative over the past four months,” said FCAI chief executive Tony Weber.

The ATV segment was the most popular with 14,545 sales compared with 9638 sales in the first half of 2019. Off-road motorcycles reported 20,885 sales in the half year, compared to 14,666 in the same period 2019.

“The ATV and SSV segment is up a remarkable 50.9 per cent and now represents 27.5 per cent of the total market,” Mr Weber said.

“Off-road bikes are also on fire, with an increase of 42.4 per cent, and claiming 39.5 per cent of the total market.”

He said the popularity of these two segments was believed to be a direct result of the COVID-19 pandemic.

“People can’t go for overseas holidays, and for quite some time,

they couldn’t even go for holidays within Australia,” he said.

“So, we believe that, instead of spending up big on expensive family vacations, people are treating themselves in different ways – and this could mean they are taking up new sports like trailbike riding.

“ATVs and SSVs are also popular, and we understand this is due to the government’s instant asset write-off program which makes the purchase of farm machinery and equipment

very attractive at the present time.”GoAutoNews Premium has also

been told that ATVs and SSVs (side-by-side vehicles, indicating two seats and sometimes termed SXS) jumped more than 50 per cent as the federal government moves to implement safety standard upgrades, including rollover protection standards (ROPS) from vehicles sold after October 11, 2021.

FULL STORY: CLICK HERE

Off-road bikes and ATVs big winners while road bikes and scooter half-year sales slide

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By NEIL DOWLING

MAINTAINING apprentice training during a lockdown hasn’t affected dealers of brands such as Renault thanks to the use of online delivery platforms to create a seamless transition from workshop to classroom.

Renault Australia aftersales director Matt Wright said apprentices had not missed any blocks of training during COVID-19 and said the online attendance was well above 90 per cent. He said feedback from dealers and apprentices was very good.

“Feedback showed that apprentices were engaged and are enjoying the training programs,” he told GoAutoNews Premium.

The program is organised by Melbourne-based Kangan Institute’s

Automotive Centre of Excellence, which is the biggest auto training centre in the southern hemisphere with more than 3000 apprentices on its books.

Kangan Institute’s manager of commercial vehicle and engine

technology, Gavin Cribb, said the program with Renault is delivered nationally to the apprentices of the brand’s dealerships.

“The move to online made in March was done without any change to our

timetable,” Mr Cribb said.“For a number of our programs,

we now have practical training through our campus at Docklands and still deliver nationally with virtual classrooms that maintain engagement with apprentices who work to blocks of training.

“This means the apprentices are completing their training at home or at the dealership, without any interruption to the program and with substantial benefits to time and cost.”

Mr Cribb said apprentices don’t have the expenses and time needed to travel from their workplace to receive the professional training level.

“There’s no costs for accommodation, flights, meals and so on, however training has remained as scheduled,” he said.

He said that one benefit for the employer is that rather than the apprentice not being in the workplace for a week, they may get to work a couple of hours a week at the dealership.

“I think that’s one reason why the support from employers is so strong,” he said.

The Renault Academy traditionally holds eight blocks of training a year – that is eight weeks – and so with the current change to online, there’s

a massive saving in time.Mr Cribb said the digital platform

program also means no-one is disadvantaged or left behind with the training program.

“Apprentices have to meet milestones in their training and working online can make it easier to revisit sections of the program to ensure the apprentice fully understands any problem area,” he said.

FULL STORY: CLICK HERE

Kangan online training saves time, maintains apprentice engagement during COVID-19

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