A record turnout of dealers has been confirmed for the Australian Automotive Dealers Association (AADA) Convention and Expo at the International Convention Centre in Sydney’s Darling Harbour.
The annual expo offers two days of dealer and industry discussion, as well as an expo featuring dealer services and products from floor pan products to power washers.
This year’s theme is ’the road ahead’, and AADA executive director James Voortman says while ‘change’ is an often quoted theme, it feels like now is really the time it is happening in the auto retail trade.
“It is a message we keep hearing, that the auto industry is on the edge of change,” Voortman said in his opening speech. “I really feel we are living that change.”
He broke those changes up into three areas – electrification, intensification of competition and regulation.
“If you scratch beneath the surface there a number of trends we need to take not off as an industry as they are going to have consequences,” Voortman said.
The first issue is electrification, with Voortman noting that Australia may have been seen as laggards in the past, but that is no longer the case.
“There really has been steep growth into Australians buy-in to electrification in the last 12 months,” he noted, explaining electric has gone from 2% of the market to 7% of the market, and hybrid close to 15%.
He notes there are the dedicated EV brands like Tesla, Polestar and BYD, but more interesting are those that have come from a traditional background.
“There are other brands who are skewing their model line up to go electric, the most striking of those is Volvo.”
“There are questions, when will we see affordable electric vehicles, and not just small electric vehicles. The utes, SUVs, that people like to buy.”
He notes the government’s moves on a fuel economy standard fall in this area as well.
“We are going to see the detail of that in coming months. That is going to see manufacturers bring down their emissions… and they will do that by adding electric vehicles to their range.”
On intensification of competition, Voortman notes there are a number of new entrants coming into the market – some off the back of electrification, and many Chinese – and they are bringing an interesting dynamic with them.
“We have now got a number of new entrants into this market, what does that mean for dealers,” Voortman said.
“You can ask Holden and Honda dealers about that. They are very thankful for these new entrants.”
He notes they have a preference for the franchise model, likely more appealing to dealers.
But it may not be all good news. With additional brands comes additional competition.
“What happens when we have an already competitive market, with these additional players wanting a piece of the pie,” he said. “Could reduced market share see brands exit or rationalise networks.”
Lastly, regulation is always going to be a big topic for the dealer association, and things only appear to be heating up.
There are ongoing emissions regulations expected, developments in consumer law and more.
Interestingly, Voortman noted state governments, emboldened by COVID, that are showing a willingness to step in to the automotive trade.
“We see state governments levying luxury cars at a state level,” he notes. There is a proposal in Queensland that only electricians will be allowed to work on electric vehicles.”
“The AADA is working hard to cover all these issues, but the best defence to all these issues covered today are our members.”
