AUSTRALIAS NO1 AUTOMOTIVE INDUSTR OURNAL EDITION · PDF file 40 car brands in Australia said...
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AUSTRALIA’S NO.1 AUTOMOTIVE INDUSTRY JOURNAL EDITION 1033 – AUG 5, 2020
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‘Positive future’ Australian car industry’s sales recovery hinges on the health crisis but FCAI chief sees long-awaited return to growth on road ahead
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By TERRY MARTIN
THE Australian car industry is bracing for its lowest annual sales result in two decades due to the deepening coronavirus pandemic but the head of its peak representative body remains confident of a relatively quick turnaround once a vaccine becomes available and consumer confidence returns.
In an interview with GoAuto last week, ahead of Melbourne’s move to tighter restrictions that will lead to car showroom closures, Federal Chamber of Automotive Industries (FCAI) chief executive Tony Weber said there was no way of accurately forecasting sales across the second half of the year as the health crisis continues in Australia, meaning the 20 per cent downturn recorded in the first half might continue to worsen.
Even a 25 per cent fall that many car company executives were anticipating – and now looks to be a conservative estimate given the situation in Victoria – would send the Australian new-vehicle market below
800,000 units for the first time since 2001, from a peak of 1.19 million in 2017 and 1.06 million last year.
But Mr Weber emphasised “there is a positive future” and that a return to longer-term growth that has eluded the industry every month for more than two years was expected based on the underlying structure of the economy and specific issues being addressed like consumer access to finance.
There are caveats, of course, such as more catastrophic floods, bushfires and drought.
But the Canberra-based industry chief who represents more than 40 car brands in Australia said the fundamentals were good, that market saturation was not apparent given strong population growth in recent years, and that government stimulus measures specifically targeting the auto sector – subsidies to boost sales of electric cars, for example – would be welcome but were not essential.
Continued next page
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Melbourne traffic during Stage 3 restrictions
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Continued from previous page The top priority is to push the
federal government to ease the current stringent lending practices introduced in the wake of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
“The most important thing that the government can do for this industry is get the right regulatory balance around the financing of vehicles,” Mr Weber said.
“We accept the recommendations, and support the thrust of the recommendations, coming out of the banking royal commission.
“But we need a balanced approach that protects consumers, but also promotes growth and sales in the market and that is the most important thing at the moment – and it was prior to COVID – that needs to be addressed in terms of the vehicle market.”
And is he confident it will be? “The answer to that is yes because I
know that people within government, senior people within government,
understand this and think it is also an important issue,” he said.
“This is not about the industry itself. This is about the economic health of the nation. Access to finance is just absolutely fundamental to the health of the economy.”
Health is the topic dominating all conversations at every level across the nation, and for the car industry Mr Weber said any market turnaround in the second half of this year and into 2021 naturally hinged on the how the COVID-19 crisis plays out.
“When we entered the health crisis, the fundamental economic infrastructure in this country and the market conditions were good. So the first question that needs to be answered is: What is going to happen with the health crisis?” he said.
“There are multiple scenarios in my mind. One scenario is we go into great decline in terms of the infection rate. One is we hold steady. The best outcome is we get a vaccine. Those three scenarios have
very different outcomes to them. “Australian governments have
responded very well relative to other countries in the world, and part of the consequence of that has been the decline in the market. (But) where we go to from here also reflects the fact that we still have a health crisis
that needs to be addressed. “It’s hard to know where things
will go.” Mr Weber said consumer
confidence was fundamental to Australia’s economic recovery and the car industry was no different to others in that once a vaccine becomes
available “you then have a look at the underlying structure of the economy and consumer sentiment”.
“There’s a lot of issues that underly this,” he said.
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PUBLISHER: John Mellor EDITOR: Terry Martin JOURNALISTS: Robbie Wallis, Callum Hunter, Byron Mathioudakis, Haitham Razagui, Neil Dowling, Nathan Ponchard PRODUCTION: Luc Britten
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By TERRY MARTIN
THE Australian automotive industry has suffered another major setback at the hands of the worsening coronavirus crisis in Victoria as Stage 4 restrictions announced this week will force the closure of motor vehicle showrooms and a variety of other retail, wholesale and manufacturing businesses in Melbourne.
All retail premises will close for the next six weeks in metropolitan Melbourne, starting midnight on Wednesday, August 5, which means dealers can still operate a ‘click and collect’ type of service in which consumers can purchase a car online or over the phone and only attend the dealership to complete the transaction where strict safety protocols are in place
and providing it is no more than 5km away from their home.
Details provided by the Victorian Automobile Chamber of Commerce (VACC) and the state government’s industry guidelines on Stage 4 restrictions show that on-site work at automotive operations across a range of areas must be closed.
As well as vehicle sales, these include motor vehicle and parts retailing and wholesaling, auction houses and transport equipment manufacturing where it is not deemed “critical to public transport service (or) spare parts manufacturing critical to continuity of service”.
While the front end of dealerships will not have their doors open, service departments are allowed under the state government’s
transport sector provisions to perform vehicle repairs, servicing, maintenance and, where applicable, towing services.
However, this will only be allowed “where providing support to a permitted service or industry or where required to maintain the health and safety of Victorians at home or at work”.
Ports remain open and road transport and support services can
all continue to operate. Warehousing and distribution
centres will also not be forced to close, but will be limited to no more than two thirds of the normal workforce allowed on-site at any one time.
According to the VACC, exemptions will be made for businesses conducted by a sole operator and at the discretion of Victoria’s chief health officer where manufactured goods or services
would, if forced to shut down, “otherwise permanently close and create a major supply chain gap in the state’s industrial capability that would unlikely to be filled after a return to normal conditions”.
The same applies where a business is “critical to global supply chains in the local and international manufacture of essential products overseas, such as medical equipment and supplies”.
Heavy truck manufacturers can remain open, as can component manufacturers th