JOWETT MOTOR GROUP OPENS THIRD BMW DEALERSHIP - Autotalk

THE AUSTRALIAN VEHICLE DEALER'S

NEWS SOURCE

MARCH 2021

JOWETT MOTOR GROUP OPENS THIRD BMW DEALERSHIP

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.COM.AU

THORNTON TAKES THE WHEEL AT EAGERS AUTOMOTIVE

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THE DEALERSHIP OF THE FUTURE?

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Australia MARCH 2021

EDITORIALTALK

HELLO THERE,

ROBERT BARRY

EDITOR AUTOTALK

ANCAP's decision to crash test the Mitsubishi Express Van and release a zero-star rating has created friction in the Australian automotive industry.

This vehicle started life as the 2014 Renault Trafic, and it was also marketed as the Opel/ Vauxhall Vivaro (2014-2018), the Fiat Talento (2016-2020), and the Nissan NV300 in Europe as well as more recently the Mitsubishi Express.

The Renault/Nissan/Mitsubishi models are built at the Sandouville plant in France, and the Opel/ Vauxhall models were built in the UK at Luton before those brands were acquired by PSA and are now part of Stellantis.

The Federal Chamber of Automotive Industries (FCAI) was the first body to come out and question why ANCAP had spent so much time and effort on retesting a vehicle which it's partner Euro NCAP had given a three-star rating in 2015.

FCAI boss Tony Weber says Euro NCAP and ANCAP supposedly work in harmony and he felt that two different results for essentially the same van is going to place confusion in the marketplace and was not a good use of taxpayer dollars.

That's one argument, but its 2021 and the level of the playing field has changed, and what was relevant in 2015 is no longer.

Earlier this year Euro NCAP reassessed all light commercial vans in its marketplace by developing dedicated test and assessment protocols looking into the safety assist performance of these vans.

The Ford Transit, the Mercedes-Benz Vito, and the Volkswagen Transporter all received a Gold rating for safety assist performance. The Ford Transit Custom, the Mercedes-Benz Sprinter, the Volkswagen Crafter and the Peugeot Expert all received a Silver rating for safety assist performance. A Bronze rating went to the Fiat Ducato, and the Iveco Daily, but the Renault Master and Trafic received a safety assist performance rating of Not Recommended from Euro NCAP. The facts speak for themselves, while the brand claims to be Europe's most popular light commercial vehicle range, Renault has got some work to do on making these vans safer or replace them with new models that will meet or better the standards set down by Euro NCAP. It is going to be interesting to watch how the market reacts to this new zero-star rating and how it affects the performance of the Renault Trafic and Mitsubishi Express in the new and used vehicle sectors. Enjoy your reading this month.

Best regards

Robert Barry

EDITOR AUTOTALK

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NEWSTALK

EAGERS APPOINTS THORNTON AS CHIEF EXECUTIVE OFFICER

Eagers Automotive Limited has appointed Keith Thornton as its new chief executive officer taking the reins from Martin Ward who held the position for more than 16 years

Thornton has been with the company for 18 years and became Eagers' chief operating officer in 2017.

Ward will transition to a new role as advisor to the board and chief executive officer.

In his new role, Ward will have responsibility for the company's $470m portfolio of owned properties, its substantial portfolio of leased real estate and strategic investments such as the Brisbane Airport Auto Mall development.

Eagers Automotive says Ward will continue to play a valuable role advising the board and providing counsel to Thornton, ensuring a smooth handover, while retaining a major shareholding.

"The board places the utmost importance on managing succession, particularly at the CEO level, and has great confidence that this model will protect the interests of shareholders and support the continued trajectory of the business over the long term," Eagers Automotive chairman Tim Crommelin says.

"In Keith we have appointed a proven leader with an unrivalled understanding of the business, its strategy and a clear vision for the future. He is incredibly well respected

across both the company and industry alike, and importantly, has played a pivotal role in shaping and executing the company's strategy over many years," Crommelin says.

"On behalf of the board, I would like to sincerely thank Martin Ward for his outstanding contribution as both CEO and managing director over 16 years. Under Martin's exemplary leadership, he has built Eagers Automotive into a true powerhouse of automotive retail.

" In the last 18 months alone, Martin has led a transformational merger, navigated a once in 100-year pandemic and steered the company through major structural and cyclical headwinds, all while delivering remarkable shareholder returns. As demonstrated by today's financial results, he leaves the CEO role with our business in a formidable position and with a highly experienced leadership team," he says.

"I am honoured to have the opportunity to lead this iconic 108-year-old Queensland company. I've had the privilege of working closely with Martin since 2005 ? he is someone I admire enormously as a leader, mentor and colleague and we are fortunate that he will continue with Eagers in an advisory capacity," Thornton says.

"I look forward to building on the strong relationships we have with our stakeholders and accelerating our current momentum in executing our Next100 strategy. We remain

MARTIN WARD

KEITH THORNTON

committed to leading the industry during a time of great transformation and utilising our unique size, scale and position to ensure we can continue to outperform for all of our stakeholders in a sustainable way." "Keith has played a pivotal role in Eagers' growth over almost two decades, joining in 2002. As COO he has been one of the key architects and drivers of our Next100 strategy and I am delighted to pass over the reins to such a hard-working and capable leader whom I respect greatly. I look forward to continuing to unlock value for our shareholders, especially within the Eagers property portfolio and in my new advisory role," Ward says.

MARCH 2021 Australia

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DEALERTALK

THE DEALERSHIP OF THE FUTURE?

Dealer Sales Director - Gumtree Cars and Autotrader Richard Dicello says while digitalisation and direct online sales have changed the way Australian consumers buy new vehicles, people still want the experience of visiting a physical dealership.

According to Richard Dicello the challenges of 2020 drove Australian automotive dealers to be more nimble in conducting business, in particular, how they approach customers now and in the future.

Dicello says the digitalisation of dealer listings, resources and test drive offerings accelerated more quickly as COVID-19 impacted Australia.

"We believe that dealerships are really in a good place, particularly the rise of the virtual showroom, which we support them through both of our sites, utilising our online marketplace, for listings, engaging with customers through SMS, and the ability to use email, phone calls, and map reveals," Dicello says.

"Customers are really keen to understand where dealers are located. That's a really key part of the buying process. And we believe the dealers with these strategies in place are well set up for the future," he says.

In spite of rapid digitalisation Dicello believes that the physical dealership still has an important role to play in the car buying process.

"Any period of change and disruption gives dealers a chance to relook at their own business model. We've seen two OEMs introducing the agency model, but from the 'Connect with the New Digital Car Buyer' research that we've conducted both before and during the pandemic, the one thing that comes out really loudly is the customer's expectation around being able to still touch and feel the car, and also to have an experience when they enter the dealership," he says.

"I think that's still a really critical part of the buying process. And of course, we play a significant role there, whether it be through education, to the ability to see the stock that's available.

"I've got no doubt dealers would be looking at every opportunity they can to rationalise. But I still think there's a need for that physical dealership presence in this country, particularly in the immediate future, and even looking into the medium term," he says.

Dicello also points out that research shows that while customers are more inclined to drive further to get a good deal on a new car, they are however less inclined to travel any significant distance to get their car serviced.

"It's really important that dealers still have a physical presence available for the customers to be able to service their cars. The more sites dealers have within their prime marketing areas, the more chance they've got of capturing that servicing market," he says.

Dicello says the convenience factor is important to customers who need a car serviced at least once a year, maybe twice. They want to drop it off on the way to work, and pick it up after work, particularly in the major cities where traffic congestion can be a problem.

Another disruption to the future dealership model are direct online sales from manufacturer to consumer, such as the arrival in Australia of .au which will sell the Chinese brand of BYD electric vehicles directly to new car buyers from July onwards.

RICHARD DICELLO - SALES DIRECTOR, GUMTREE AUSTRALIA AND AUTOTRADER.

Dicello says other car manufacturers are also trialling such initiatives but he reckons the human touch is still needed.

"It is an opportunity to trial a new sales model and there might be some learnings for dealers. Any time we can learn and adapt and move forward is a good thing for the industry and I think we should embrace it and take the learnings," he says.

But Dicello says research still shows that that interaction between the consumer and the dealer, particularly the sales person, is vitally important.

"From a dealership perspective in this country, the one thing they can continue to focus on is making sure that first point of contact when the consumer walks into the dealership is at or above expectation.

"The research that we conducted in 2019 shows consumers are still concerned about making the right choice when they walk into a dealership, and up to 20% of them still change their mind, right at the front at that decision point.

"So there's still a significant role for the dealer, in particular, the salesperson, making sure the consumer feels comfortable making their decision," he says.

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MARCH 2021 Australia

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DEALERTALK

JOWETT MOTOR GROUP OPENS THIRD BMW

DEALERSHIP IN BERWICK

The 44th dealership in the BMW Group Australian national retail network, Berwick BMW opened in late December 2020 after construction began in May.

Operated by Jowett Motor Group (JMG), Berwick is the group's third BMW dealership, joining Waverley BMW which it opened in 2013, and South Yarra BMW which it acquired from the Autopact Group last year.

JMG says in spite of construction taking place during Melbourne's lockdown, the tireless work by the dealer principal, general manager and the dealership team meant that the sales, service and parts departments at Berwick BMW were open to customers on its first day of operation, December 21.

Waverley BMW dealer principal Brett Jakes is also overseeing Berwick BMW and last year JMG appointed another experienced industry executive Neil Phillips as the new dealership's general manager.

Jakes has more than 25 years of experience in the automotive industry and more than eight years as a BMW dealer principal.

Phillips previously worked for Inchcape Australia for more than 15 years, starting in used vehicle sales management, moving up to new

vehicle sales management, and was formerly the general manager of three Subaru dealerships as well as a member of the group's F&I leadership team.

The Berwick dealership's footprint has space for up to 80 new and used vehicles with a substantial servicing department, and more than 30 staff ? which is another figure expected to grow.

JMG announced its intention to build the new dealership in late 2019 with company founder and chief executive officer Tony Jowett saying it would offer a first class experience for new

customers as well as an alternative location for current customers who live in and around Berwick.

Jowett says he was excited by the opportunity to build a substantial BMW presence in the south eastern corridor of greater Melbourne.

"We want to be heavily involved in the local community, supporting the people who we hope will be supporting us," Jowett says.

Located along the Princes Highway, the purpose-built Berwick BMW complex is found at 6 Coventry Road in the Narre Warren 3805 postcode.

to page 7...

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DEALERTALK

...from page 6 In the 2016 census, 35% of the working population of the local area did more than 40 hours per week, 72% of employed people drove a car to work, 52% of families had children, 47% of homes were mortgaged and 42% had two cars.

But nearly 10% of household income was more than $3000 gross per week, and 16% earned less than $650.

Inspite of what is commonly understood to be a lower socioeconomic region of Melbourne, there is still a strong potential customer base ready for some competition ? Mercedes-Benz is already in the same geographic pocket.

When plans for the new BMW Berwick dealership were announced in late 2019, dealer principal Brett Jakes told GoAuto that the launch timing of the new facility was perfect.

At the time Jakes said the BMW brand

was well positioned for growth and he was confident the company would get good business out of Berwick.

"We see the need for strong service and used car sales as the business builds its new car clientele," Jakes says.

Jakes said he estimated BMW Berwick will comfortably get 20 cars a day in for servicing and will eventually match the BMW Waverley workshop numbers of around 70 vehicles per day.

BMW Berwick sits in the same prime

marketing area as BMW Waverley but Jakes told GoAuto that it's not an open point.

He said when BMW Waverley was opened by the Group it was designed as the main dealership but JMG then saw the opportunity to expand the reach of its prime marketing area by opening a second BMW dealership in Berwick.

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NEWSTALK

CONSUMERS DETOUR TOWARDS TRADITIONAL PLATFORMS

As the long-term trend towards electric vehicles (EVs) continues to solidify, consumer anxiety amid the pandemic around the world may be shifting automotive priorities towards familiarity and affordability. According to Deloitte's 2021 Global Automotive Consumer Study (which covers 23 countries, including Australia), 70% of Australian consumers are still looking for a traditional internal combustion engine for their next vehicle. The report explores opinions regarding a variety of issues impacting the global automotive sector, including implications of the COVID-19 pandemic on consumer perceptions, the development of advanced technologies and impact of digital automotive retail platforms. Key points from the survey of more than 1000 Australian consumers include: ? 70% expect to focus on petrol/diesel for their next vehicle, compared to 18% for hybrid electric, and 4% for battery electric ? A cost/price premium (28%) and a lack of charging infrastructure (22%) are the greatest concerns regarding allbattery-powered electric vehicles ? 79% still expect to purchase their next vehicle the `traditional' way ? in-person, compared to virtually ? 61% would still prefer to interact with an authorised dealer ? 60% are also open to virtual servicing, as long as it free.

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CONSUMER INTEREST IN EVS

"There's not a shadow of a doubt that, particularly with stricter carbon emission regulations on the nearer horizon, the motor vehicle torch is slowly being passed from internal combustion to electric," Deloitte Australia Automotive Co-Leader Lee Peters says.

LEE PETERS

"Awareness amongst

Australian consumers

of, and interest in, all-

electric, or at the very

least hybrid, is certainly

there, and is growing.

DALE MCAULEY

But, no differently to

elsewhere around the

world, Australians still require greater assurance around

issues such as mileage, robust charging infrastructure

rollouts and affordability of the electric segment.

"Unlike in some other markets, COVID doesn't appear to have played a particular role in exacerbating apprehension around the purchase of EVs. Rather, in a country where we often need to travel long distances, we shouldn't be surprised that issues such as range, price and charging opportunities are front of mind, and influencing purchasing choices to largely stay with the technology we all know," Peters says.

THE FUTURE OF DIGITAL AUTO SERVICES

"Unlike many other retail sectors that have seen a wholesale shift to online buying, purchasing a vehicle remains a largely face-to-face experience for many consumers around the world, and certainly here in Australia, Deloitte Australia Automotive Co-Leader Dale McCauley says.

"However, some people are increasingly looking for a virtual sale experience to maximise convenience, speed and ease of use, and sometimes to avoid the dealer experience all together.

"Australian dealers have shown they are open to change on the sales experience front in recent years, but with so many consumer transactions now available online, it's a matter of time before this extends more and more into the auto space.

"Certain aspects of the buying process remain difficult to digitise, so the in-person experience will remain with us for some time. People still want to see, touch, and smell, and drive a vehicle before they buy it.

"Will there be virtual vehicle sales in the future? Absolutely, but we don't need to write off the in-person experience just yet, as most consumers still want it going forward. And as demand for virtual transactions grows, this will likely result in a more complicated, and potentially costly, set of consumer expectations for dealers to meet," McCauley says.

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Australia MARCH 2021

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