Unexpected financial twists have emerged in the automotive sector as it transits the COVID-19 lockdown through to the recovery phase, and it is our members who have experienced the twists – some surprisingly good and others grim. I share some insights provided to me.
On the positive side of the ledger, after a long period in the doldrums, our Automotive Remarketing Division (ARD) Chair Peter Dever reported the positive business conditions currently being experienced: ‘2020 has continued to be what has been unprecedented for the used car industry. Following the arrival of COVID-19 restrictions, our sector has gone from grinding to a halt, with auction houses forced to cancel auctions and used car stock drying up, to record sales in the space of a few months. Sales of used vehicles continue to be strong, with wholesale prices firming due to a lack of stock.’
Consistent with the strong used car market experienced by our ARD members, a popular selling website indicated that from April to June there was a 19 per cent increase in used car automotive searches amounting to 155 million. Department of Transport registration transfer data indicates there were 39,795 dealer-to-private used car sales for the quarter to 30 June 2020. Of interest too, was the almost 83,000 transfer units for the same period.
Household and worker interest in, or the purchase of, used cars and for other discretionary spending may stem from the Federal government’s stimulus measures. On the other hand, the purchase of a used car may be to upgrade to a newer model until an electric vehicle is purchased. A recent Electric Vehicle Council survey indicated of those who responded, 56 per cent would consider purchasing an electric vehicle as their next vehicle. This represented a steady increase from 48 per cent in 2018. In 2019 electric vehicle sales tripled from 2,216 to 6,718 units. So far in 2020, electric vehicle sales have proved to be resilient even through COVID-19, with 3,226 electric vehicles sold in the first half of the year.
In contrast to the positive used car and electric vehicle markets, our Australian Automotive Dealers’ Chair James Robertson reports of 28 months of declining new car sales amidst ongoing challenging conditions facing the market, including the COVID-19 pandemic. For the month of July, a total of 72,505 new vehicles were sold across Australia, almost 10,700 fewer than corresponding month last year. This suggests other complicating factors beyond COVID-19 restrictions are in play such as stock shortages and subdued consumer and business confidence.
The auto parts recycling industry is regarded in some sectors as the ‘ugly duckling’ of the automotive value chain. It will, in time, turn into the ‘swan’ the industry needs. It may not be as beautiful as the story says, but its value will emerge, providing a significant role in the automotive parts supply chain. It needs to be recognised as an integral part of the automotive value chain and appreciated for its environmental and financial value. The transition to electric vehicles from internal combustion engine vehicles will create an environmental issue for society which the parts and recycling sector will be at the forefront in resolving. Substantial increases in fees and red tape associated with the new environmental application and registration process are having a negative impact on this industry sector. We continue to work through members concerns.
Apprentice of the Year
Despite the year becoming filled with ‘cancel culture’ due to the very necessary restrictions placed on the community by COVID-19, we are pleased to be continuing with one of the highlights in our event calendar. Normally taking its place within the spectacular Industry Awards Gala night program, this year the Apprentice of the Year award will be presented at its own stand-alone event. Later in October, 12 outstanding candidates will be vying for the title of MTA Queensland Apprentice of the Year. The event will take on a new hybrid format, whereby some attendees will come along to celebrate in person while others will join online via a Zoom link. The Apprentice of the Year candidates come from a pool of winners of the preceding Apprentice of the Month award. The talent this year is quite outstanding, making the executive leadership decision very difficult. We would like to thank the event supporter MTAA Super who have for many years been aligned with this award. We look forward to celebrating this night along with family, friends, trainers, and employers of the apprentices and wish all the finalists the best of luck.
Elections and Annual General Meetings for Divisions
By way of keeping our members informed, we provide the following update. As the Australian Election Commission (AEC) continues to respond to the developing COVID-19 pandemic, Industrial Elections are on hold until the end of September 2020. Specific information has been provided to registered organisations, the Registered Organisations Commission, and the Fair Work Commission. However, where elections are essential to ensure the continuing governance of the organisation, the AEC will work with those organisations and the Registered Organisations Commission to ensure these critical positions proceed to election. We offer assurance to members that this does not affect our operations or governance. All elected members will remain in their current positions to represent the interests of your division.
As we finalise the outcome on our 2020 elections schedule, members would have seen some Annual General Meetings were cancelled. We hope to reschedule these to be held in October and remind all members that you are welcome to participate.
Our Industry Skills Advisor has been an important and regular feature in all our recent division meetings. Our members and committees can provide direct feedback essential to shape current and future policy. As advised previously, MTA Queensland has been selected as the Industry Skills Advisory organisation for the automotive industry, reporting directly to the Department of Employment, Small Business and Training.
Industry Skills Advisors will engage with employers, small business, and industry stakeholders to provide high quality, evidence-based industry advice and intelligence about current and emerging industry direction, regional skills needs and training solutions, job growth and employment opportunities.
At any time we welcome all feedback from members you can make contact, provide feedback or find out more here.
Member feedback opportunities
Thank you to all members who supported the written-off vehicle e-petition through Queensland Parliament. The purpose was to encourage the Government to consider and act on the recommendations of the review and fast track their implementation. The response from the Hon Mark Bailey MP Transport and Main Roads is due shortly.
We have also circulated a survey recently to our Engine Reconditioners Division on future member engagement and participation. Your Chairman and committee are very keen to welcome more participants to meetings and will be assessing some of the options that suit you best. Please check your inbox and complete the survey. If it has not come through, please do not hesitate to contact member services on [email protected].
Finally
Some trivia: Did you know that the legendary singer Johnny Cash was a car collector with his best-known car being a 1970 Rolls Royce Silver Shadow? It is now a Tesla-powered electric vehicle. Shift EV, a company in Oregon in the U.S., was given the task of turning it into an electric-powered vehicle. Not only is the ‘man in black’s vintage Roller now battery powered, it also features the Tesla infotainment screen in the boot to keep the interior appearing as original as possible.
Until next Viewpoint take care and stay safe.
15 September 2020