Australian Automotive Dealer Association’s (AADA’s) Chief Executive David Blackhall says the year ahead should prove an interesting one, referencing the identified franchisee power imbalance present in Australia coupled with big questions for “automotive disruptor” Tesla.

Also on the AADA’s 2019 agenda is the revision of dealer franchise agreement conditions under which dealerships are required to run their businesses.

Allied with the North American Dealer Association (NADA), the AADA says NADA President Peter Welch makes a pertinent argument that reflects industry changes that may become reality here in Australia.

“Welch asks some highly relevant questions and the AADA looks forward to learning more about NADA’s view when we meet with them in January in San Francisco,” he says.

Welch expresses strong disapproval towards unfair stair-step incentive programs, stating “overly complicated and short-term programs that favour larger and urban dealers, continue to erode brand loyalty, brand value, residual values and the consumer experience.”

With over 50 million warranty and recall repair orders logged in 2018 and many dealers running their service bays at near full capacity, Welch believes Original Equipment Manufacturers (OEMs) should compensate dealers fairly on warranty and recall work carried out.

The AADA also raises important questions for a major industry disruptor, declaring the ADDA will keep a close eye on Tesla’s movements throughout 2019.

“Will Tesla finally achieve commercial scale this year?” Blackhall questions.

“Will the Initial Vehicle Quality/JD Power APEAL scores for Tesla vehicles achieve parity with the mainstream OEMs?” he wonders.

“How will Tesla’s tactical pricing response to the 50% reduction in the Federal Tax Credit impact sales forecasts?”

Additionally, Blackhall questions if it is “morally acceptable for the Federal and State governments in the US to continue to hand around US$8000 in taxpayer-funded incentives to wealthy purchasers of Tesla vehicles?”

Finally, the AADA calls to action anybody in the automotive industry who has firm answers to these questions, “We’d like to borrow your crystal ball,” Blackhall concludes.

Source: Dealer association looks forward
9 Jan 2019