Opinion

How the Holden boss got dealers off-side | comment
By Joshua Dowling · 28 Oct 2014
The industry does not know what to make of Gerry Dorizas' sudden departure but time will reveal all.Time will tell us why Gerry Dorizas left the top job at Holden suddenly.In the meantime the dealers that have carried the brand with outdated cars will need to do even more heavy lifting.Mr Dorizas had barely been in the top job at Holden for more than a month when he boldly declared that the once proud brand would return to Number One and topple Toyota by 2020.It was a big call because Holden sales had just hit a 20-year low, and it hadn’t been at the top of the charts for 11 years.Behind the scenes, Mr Dorizas began blaming dealers for the company’s woes.In one of his so-called motivational speeches to the dealer network, he told them to sell more cars. If only it were that simple.The dealers quickly got off-side, but they continued to slave away selling a model line-up that has been left largely unchanged over the past few years.Sure, Holden sales are up 1.3 per cent year-to-date in a market that is down 2 per cent. But most of that growth has been disguised by the Commodore’s bounce back from the previous year’s record low.Holden has a handful of ‘new’ cars coming next year; but they’re simply rebadged versions of selected Opel models that were withdrawn from sale last year after just 11 months. Another monumental General Motors misstep.Holden won’t have any all-new-from-the-ground-up cars until early 2016. That’s when the new Captiva is due to arrive, ahead of the imported version of the second-generation Cruze sedan.In the meantime, Holden dealers will be pushing out the same metal it has been trying to move for the past few years — against competition with newer models and a more diverse range.Holden dealers don’t deserve the blame for the company’s current predicament. They deserve a medal, because without their tireless efforts with an ageing product range Holden would be in much worse shape than it is today.
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Why Australia is set for record vehicle recalls in 2014 | comment
By Joshua Dowling · 24 Oct 2014
Some car brands are more open than others; some owners are in the dark. Australia is on track to post a record number of vehicle recalls this year. It has already eclipsed a 10-year high.In 2004, about 776,000 cars were recalled - so far this year, the figure is more than 800,000 and looks certain to surpass the 855,000 in 2001.So are cars becoming less reliable or are manufacturers more concerned about being sued for negligence, and so being more open about problems with their vehicles?The answer to both questions is yes.As car companies drive down costs, they outsource more parts that can be bought more cheaply due to global economies of scale.For example Japanese company Takata makes airbags for most leading car brands. But when something goes wrong, it's monumental.There is currently a global recall of 16 million cars from nine brands - including about 100,000 in Australia - because Takata airbags could inflate with excessive force and potentially spray shrapnel at occupants. So far, the fault has been linked to at least four deaths in the US.General Motors, meanwhile, recalled 2.6 million cars in North America because of a faulty ignition switch that could turn off the engine and disable the airbags. So far the fault has been linked to at least 27 deaths in the US, according to Reuters.US authorities found General Motors executives hid the fault for almost 10 years. Senior staff involved in the scandal have since been sacked.Recalls are in the spotlight in Australia because Holden - possibly spurred by the investigation into the parent company's handling of the ignition switch recall - has been more open than it might have been in the past. Holden's 13 recalls so far this year is more than any other car brand in a calendar year and more than half of these relate to Australian-made cars.Would you rather buy a car from a company that is more open about its faults and more likely to fix them quickly?The next highest on the local list are Jeep (nine recalls) and Toyota (seven). Some Holden recalls, such as a faulty windscreen wiper, may seem overcautious. Some, however, are disturbing.One of the latest recalls was issued because manual transmission versions of the Holden Trax compact SUV and Barina small car can unintentionally 'bunny hop' and then stall if the driver bumps the key when it is in the ignition - even in the off position.Authorities argue that safety is safety, though the definition of 'safety' is open to interpretation. Despite the tough wording, recalls in Australia are still voluntary.This is why some brands don't issue a recall and instead divert the repair work to a 'dealer service campaign'.For example, Hyundai Australia last year voluntarily called 227,000 cars to dealerships to replace a faulty brake light switch in eight models, representing most of its range. News Corp Australia exclusively unearthed the fault the year before.But the company stopped short of calling it a safety recall because the Federal Department of Transport advised the consumer watchdog that the brake light switch fault was "not a safety issue".Hyundai has previously shown a reluctance to recall.In November 1998 it refused to recall 46,000 examples of the Excel even though several were found to have a welding defect that could lead to the collapse of the front suspension.In words eerily similar to the brake light issue, Hyundai claimed at the time it was "not a safety issue".An NRMA technical report said of the Excel's suspension: "In extreme cases the right front wheel and drive shaft can become detached and jam the wheel in the housing." The Federal Government threatened to issue a compulsory recall - which it had never done - if Hyundai did not take action. Despite the seriousness of the fault, and the tough talk from government, Hyundai issued a dealer service campaign.Holden may be more transparent now but it too has recently avoided at least one serious recall. It insists there is no local recall required for a faulty ignition switch despite 46,000 export versions of the Australian-made Commodore and Caprice being recalled in the US earlier this month. In doing so Holden has avoided what would become the biggest recall in Australian automotive history as it would involve approximately 432,000 Commodores made since 2006.Holden engineers insist the GM ignition fault in the US does not affect Commodores in Australia because the position of the key is different.The risk of faults increases as cars become more complex and incorporate more parts from outside suppliers. Furthermore, the handling of recalls differs from brand to brand.Would you rather buy a car from a company that is more open about its faults and more likely to fix them quickly?The alternative is to hope for repair work under the guise of a 'dealer service campaign' - but that is contingent on taking the car back to the selling dealer rather than an independent mechanic.Federal authorities need to provide a clearer definition of what constitutes a safety recall to make the response more consistent across all brands.For now, some car brands are more open than others in this respect and some car owners are none the wiser.
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Beware of ambush marketing | comment
By Paul Gover · 20 Oct 2014
Comparing the contenders has always been a great way to bag a new-car bargain. So you might be looking at a Holden Commodore but, after watching the Bathurst win last weekend by Paul Morris and Chaz Mostert, decide instead a Ford Falcon is more your style.Or you could be convinced you need a new Toyota HiLux, until you check the prices for rivals such as the Nissan Navara and Mitsubishi Triton. But there is a new twist in the tale.It's all about brands stopping rivals gain ground. And stealing their customers. It's called ambush marketing and it's becoming more common.Earlier this year, on the same day BMW was ripping the covers off its hot rod M3 sedan and M4 coupe, Mercedes-Benz boosted power and cut the price for its belter C63 AMG.As Ford continues the build-up to its FG X, which goes on sale in early December, Holden has just done a 2015 update on its excellent VF Commodore."Ambush marketing is all about stealing someone else's glory," says John Startari, who heads Peugeot and Citroen in Australia. They're challenger brands and he's always looking for a way to lure people from the mainstream. "Remember the Holden blimp? The day it accidentally got blown towards the MCG in a Toyota-sponsored ALF game? Ambush marketing."Even Toyota's AFL sponsorship is a way to one-up companies, like Mazda and Renault and Fiat that support individual teams." There are no boundaries in ambush marketing, with Kia doing a job on half-brother Hyundai in a people-mover stoush this week.As Hyundai previews its updated 2015 seven-seater Santa Fe, Kia has done a value-added package for its rival Sorento. Kia says the "Family Pack" is a $3400 value boost, which is sure to tickle shoppers who put value at the top of their priorities.
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Why Ford needs to stay in Australian motorsport | comment
By Joshua Dowling · 17 Oct 2014
Ford fans might not want to believe it, but the exclusive story by News Corp Australia’s James Phelps in the lead-up to last weekend’s Bathurst 1000 is true.Ford is planning to pull out of V8 Supercars once it stops making cars in Australia at the end of 2016.It has already cut funding and will trim the budgets even further over the next two years -- even though the last official Ford-funded team just delivered the company back-to-back wins on the mountain, in an unprecedented last-to-first victoryPlease, Ford. Rethink this decision.But emotion carries little weight in such heavy boardroom decisions. Ford won’t say this publicly, but privately it thinks motor racing is bad for its image. It wants to reposition as a technology leader, and move upmarket.I have one word for Ford on this: Toyota.The Japanese giant sells more blokey four-wheel-drives and utes than any other brand in Australia. Toyota also sells a tonne of hybrid cars globally (it just passed the 7 million mark this week). In other words: you can market both. Successfully.I completely understand why Ford wants to move its brand upmarket. Even Ford dealers admit the cars are better than the brand’s image.But to walk away from the core V8 audience is madness. Ford walked away from motorsport and V8s before. And the fans forgave them when they came back. I’m not so sure fans will be so forgiving a second time around.One more thought: if the V8 Supercar audience isn’t worth talking to, why did Ford have so many advertisements all through the telecast on Sunday?Please, Ford. Rethink this decision. Ford race teams need genuine financial support to remain competitive, not a few body panels donated in kind.
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Bathurst 1000 blitz proves why Ford needs to remain in V8s | Comment
By James Phelps · 14 Oct 2014
Toyota Peformance Racing star Chaz … Wait. That doesn't sound right. Let's start again. Hyundai charger Chaz Mostert … Nup. That doesn't work either.Beginning any story about Bathurst's newest champion with anything other than Ford would just not be right. But sadly we may soon be calling the kid who shocked Mount Panorama a Toyota top gun, a Hyundai hero, or maybe even - and God forbid - a Holden driver.As revealed by News Corp Australia last week, Ford have told high-ranking V8 officials that they do not have a future in the sport.They may elect to give Ford Performance Racing - the one and only team they sponsor this year - some help next year, with the team committed to racing the new model Falcon. But after that they are out.They want to kill off the famous Ford v Holden rivalry; the great Australian sporting war. It's the war they just happen to be winning despite their apparent lack of interest as Mostert helped them to back-to-back Bathurst titles on Sunday following Mark Winterbottom's epic win last year. They won't commit to Ford Performance Racing despite the team proving they are not just one of Australia's best sporting teams, but also brands.They are fast, popular and right now facing an uncertain future because Ford can't see the value in taking $2 million a year from a $60 million marketing budget and spending it on … wait for it …cars.Sure, we all know the car market is changing. Apparently the only people buying cars are 22-year-old, latte-sipping, poodle-walking girls. But even if this is true, isn't it still the father that ultimately takes his daughter to the dealer to have the final say?A bloke called Bruce, who hates poodles, drinks Nescafe and has watched every Bathurst 1000 since he was born? Let's take the emotion of a car company using cars to sell cars (yeah, stupid right?) and look at the pure advertising.Ford need to be as visible as possible. Since announcing they are shutting down their Australian operations at the end of 2016 and axing the Falcon, people think the company is in decline. Some people even think that Ford will not exist in Australia soon. The company needs to be as visible as possible, so what can FPR do?Well how about the 3.7 million people who sat in their homes watching a 300km/h advertising board win Bathurst? And the 193,647 that were at Bathurst watching the Ford poster beat Nissan, Holden and Mercedes.There is that. And then there are the other 14 rounds of the championship. The ones that hundreds of thousands of fans go to and spend $60 to become mobile advertising boards themselves by buying the shirts, hats, and flags. Wait … they pay to advertise your brand? Yep.They do much more than that. They buy cars, too. Sure, maybe there won't be any V8s on the road soon, but these people will still be driving something. Ford, do you still want them to be driving a Ford?Chaz Mostert's Bathurst win could not have come at a better time. Surely it will make Ford see what they will lose if they go. Wake up Ford. You have been warned.
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Why you shouldn't be spooked by the currency's impact on new-car prices. Yet | comment
By Joshua Dowling · 19 Sep 2014
The value of the Australian dollar against the US dollar fell to a six-month low this week, but don't expect to see a kneejerk rise in new-car prices. There are several compelling reasons for this. For starters, every car already on dealer lots was imported by the car company and paid for by the dealer when the currency was stronger. Secondly, most brands do not buy in US dollars. And thirdly, most companies buy their foreign currency up to six and nine months in advance, to protect customers (and the price of cars) from such fluctuations. The value of the Australian dollar versus the Japanese Yen, the Thai Baht (Thailand is now our second biggest source of cars ahead of South Korea), and the Euro are all relatively steady. Furthermore, economists are predicting that the value of the Australian dollar will remain above 90 US cents for at least the next 12 to 18 months. Any guessing beyond then is exactly that: a guess. So while the latest car sales figures don't reflect it, as we've now seen eight months in a row of sales decline and the biggest dip since the Global Financial Crisis, the reality is new-car prices in the mass market (below $60,000) are the lowest they've been in 20 years and, thanks to low interest rates, car affordability is at a 38-year high, according to CommSec. New-car prices will only start to rise once the Australian dollar slumps across more currencies for a several months in a row. Then, we will need to worry. All that said, Australians still pay over the odds for luxury cars, but you can blame that on our relatively small market (less than 1 per cent of global vehicle sales) and a Luxury Car Tax that slugs buyers 33 per cent of the cost of most cars above $61,884.
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Why safer cars deserve credit for lower road toll | comment
By Joshua Dowling · 21 Aug 2014
Safer vehicles -- and car affordability at a 38-year high -- deserve at least some of the credit for the record-low road toll announced this week. Figures for July released by the Department of Infrastructure and Regional Development show 1157 people died on Australian roads over the past 12 months, down from the 2013 calendar-year tally of 1193 deaths. The latest 12-month tally is the lowest since 1935 when 1100 people died, and is down from a peak of 3978 deaths in 1970 when there were fewer cars on the road -- and the population stood at 12.2 million, a little more than half what it is today. Governments across Australia will no doubt take the credit for the latest reductions in the road toll as speed cameras continue to rake in the cash. But it is worth noting that five of the past six years have been records for new-car sales and most new models have six airbags and stability control (which can prevent a skid) these days. That means there is a greater chance the cars alongside you can avoid a crash in the first place and, if things do sadly go awry, you're more likely to be in a car that's better protected by airbags. The old adage that we don't make 'em like we used to is true when it comes to cars. Back in the Kingswood era, cars were designed to be strong -- and the human body took the brunt of the impact. Modern cars are in fact designed to crumple around you so that the forces on the body -- the rapid deceleration -- are minimised. We shouldn't pat ourselves on the back just yet, however. The average age of cars on our roads is getting younger but it is still not as good as other developed countries. The average age of all cars on Australian roads has dipped to below 10 years for the first time, but is still not as low as Japan, the UK and the USA whose vehicle fleets are an average of six to eight years old. Which is why the thought of opening the floodgates to imported used cars is disturbing. The Federal Government is still considering this flawed proposal. We need to find ways to continue to make new cars more affordable so they can filter onto the used market and be within reach of the masses. Today, you can have a brand-new Honda Jazz with six airbags, a five star safety rating and a rear-view camera for $14,990. Given that Australia's used-car prices are at 10-year lows, chances are near-new two- or three-year-old cars will soon be in the $8000-$9000 price bracket. Imagine how many more lives we can save as the nation's car fleet gets newer and safer -- and imagine the tragedy if a flood of older used cars led to an increase in the road toll. That would most certainly not be progress. Here's hoping common sense prevails. Fast facts Motorists need to give cyclists a bigger safety gap as the number of fatalities has risen by a staggering 44 per cent over the past year -- to 56 deaths in the 12 months to July 2014, or more than one fatality a week. The latest figures show Australia's road toll has fallen to a new low -- and deaths of 17-to-25-year-olds have dropped by 33 per cent over the past five years -- but fatalities among those aged over 65 have increased by 10 per cent over the same period. Five years ago, 307 drivers aged 17-to-25 died on the nation's roads compared to 235 road users over the age of 65. But in the 12 months to July, 204 young drivers died compared to 258 deaths of those aged over 65. Road deaths over the past five years are down in every state in Australia except Tasmania, where the road toll is up by 28 per cent (from 32 in the 12 months to July 2010, to 41 deaths in the 12 months to July 2014). The latest figures show motor vehicle fatalities in Australia have fallen to five deaths per 100,000 people for the first time since records were kept -- but our roads are still the 16th most dangerous among OECD countries, behind Turkey (4.99), Finland (4.71), Germany (4.39), Switzerland (4.26) and Spain (4.12). Figures from the World Health Organisation show China and India have much higher road fatality rates (approximately 20 deaths per 100,000 people according to 2010 data). The worst places on the planet for road deaths are the Dominican Republic (41.7 fatalities per 100,000 people), Thailand (38.1), Venezuela (37.2), South Africa (31.9), Iran (34.1), Iraq (31.5) and Oman (30.4), the WHO data showed.
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HSV trying to build more GTS Maloo utes | comment
By Joshua Dowling · 14 Aug 2014
Holden could be without a V8 in its showrooms in 2018 as Camaro still not confirmed.  Australians still can't get enough of their V8s. There was so much demand for the first and the last of the "final" edition Falcon GT that Ford had to auction them off for charity to avoid a backlash among buyers -- and dealers.If you want to make a sizeable donation to a worthy cause, the National Breast Cancer Foundation, and end up with either car 001 or car 500 of the GT-F, get onto e-Bay between August 17 and 24.Meanwhile, following our exclusive story last week about the epic new HSV GTS Maloo, our dealer sources tell us the initial allocation of 150 cars are sold out and Holden and HSV are scrambling to see if the factory can squeeze in another 50 to 100 cars.One dealer had an allocation of five cars but has 16 signed deposits. Other dealers we spoke to said they could sell twice as many as they were allotted.Collectors fear not, however. HSV and Holden are unlikely to flood the market. We suspect they will cap it at 250 maximum, if they can indeed get enough of the extra bits to put them together.Most of the heavy-duty parts (and, of course, the supercharged V8 engine) are carryover from the GTS sedan. But the lengthened tail-shaft is unique, as are some interior bits and pieces, we hear.Keep in mind that HSV and Holden have not even publicly confirmed the GTS Maloo even exists yet, which it makes it all the more remarkable that it's already a sellout.I hope Holden is watching this love of V8s closely (our guess is that Holden at least has some idea, given that it will introduce a Craig Lowndes special edition at Bathurst to mark 20 years since the V8 Supercar driver debuted in a Holden).Even though Holden's sales and marketing boss Philip Brook told dealers late last year there were plans to introduce a Camaro in 2018, we now hear that was not necessarily true.Apparently the comments were made to pump the dealers with confidence after last year's announcement about the factory closure in 2017.Reliable sources in Detroit say there is still no plan to build a right-hand-drive version of the Camaro.As incredible as it seems, Holden dealers could be without a V8 in their showrooms in 2018 for the first time since 1967.For the sake of Holden fans, here's hoping the arrival of the Ford Mustang next year will give General Motors all the incentive it needs to approve the Camaro for Australia.
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Euro NCAP closes safety loopholes | comment
By Joshua Dowling · 08 May 2014
There's been a nasty battle brewing for months between French car-maker Renault and the Australian crash test authority, ANCAP.The furore reached a new low last fortnight when the Renault Australia boss questioned whether Australian car buyers will even need an independent authority on car crash safety once local manufacturing ends in 2017. For the record, ANCAP isn't going anywhere, even though some brands wish it would.This change in attitude is surprising from the company that was the first manufacturer ever to be awarded five stars for safety -- and to promote the fact.So why has it all gone sour? A couple of new Renaults, when measured against current Australian criteria, would only earn four stars in Australia because they lack rear airbags.Australian authorities closed this loophole after Ford got a five star rating for the Falcon a couple of years ago without rear airbag protection on what it dubbed "a modern family car". But Euro NCAP was slow to close this loophole, and Renault (and Volkswagen) began introducing models without rear airbag protection.The sole purpose of Global NCAP is to improve vehicle safety and yet, right under Euro NCAP's nose, European car makers began offering less airbag protection to save money. Well, now the game is up.Euro NCAP has finally followed the lead of Australian NCAP and will close the rear airbag loophole. Unfortunately the requirements won't come into force in Europe until 2016.The tragedy here is that Euro NCAP assumed, perhaps naively, that car makers wouldn't dare take a backwards step when it comes to safety. But when it comes to saving money, car makers are masters at reading the rules.Which is why you should only ever judge cars sold in Australia by the Australian NCAP ratings (ancap.com.au) as they are the more robust standard. Australians like to think that something from Europe is automatically better. But on this occasion the opposite is true.Meanwhile, it will be interesting to see Renault and others change their attitudes to rear airbags once the European rules come into force. For the past few months, Renault has been trying to tell us that rear airbags aren't essential, and in some circumstances can even be dangerous. Don't make me laugh.This reporter is on Twitter: @JoshuaDowling 
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Why transparent pricing sells cars | comment
By Joshua Dowling · 18 Apr 2014
Last week's story about the hassle of simply getting a price on a new car certainly hit a raw nerve.It seems we're not alone in our frustration, if the overwhelming feedback from readers is a guide. Some car dealers also weighed in on the debate.Reader Riki Waugh tried to buy for his daughter a brand-new Toyota Corolla off the showroom floor, but walked out after being bumped up through three layers of sales staff, none of whom would supply a price. Suffice to say, he bought elsewhere.Reader Hubert Breitenstein summed up the view of many buyers who struggle to obtain a price: "It seems like some crazy form of self sabotage." He added: "Everyone who has any sense does price comparisons, no matter what they buy. Why do car dealers think that they are sacrosanct? What do they think they gain by withholding prices?"Mr Breitenstein says he has walked away from three potential purchases because he could not get a price on a vehicle he was intending to buy.Incredibly, one dealer refused to reveal the "change-over" price from his trade-in to a new car until a deposit had been paid. This may sound fanciful but, sadly, it is not the first time we have heard of this practice.Reader David Toohey understood our point, too: "If dealers could just be transparent they would sell more cars". Mr Toohey says he experienced the same wall of silence when it came to a straight answer on the trade-in and drive-away prices."Surprisingly the salesman who was looking after us couldn't supply an answer and suddenly transformed into a school boy going to see the headmaster," wrote Mr Toohey. "He had to consult the dealer principal and he met us with the response ‘we will tell you that when you are ready to buy'."Some dealers accused us of trying to push car sales staff below the poverty line. Others understood our point: that an open negotiation can lead to more sales. Dealership employee John Bellizia wrote: "You're absolutely right, dealers are their own worst enemy at times and can make the experience somewhat draining."However, he said: "Not all dealers have a code of ethics but (some) customers come out punching harder than Mike Tyson!" Mr Bellizia said at his dealership it was policy to "treat every customer with honesty and integrity, every day, every time, without fail ... no exceptions." But, he lamented, "it seems that only the nice customers get to experience this".As we wrote last week, we were merely trying to highlight the point that if sales staff were more forthcoming with a price, they would sell more cars. No-one is paying full price for cars these days, so dealers who try to find the one customer a year who might pay full tilt actually end up losing countless other potential sales.The smart brands that are doing well have all moved to transaction pricing, with little to no wriggle room because the deal is already sharp -- and the customer can see that.For example, last week Honda put up the price of its Civic hatch by $1000 -- just as Volkswagen limboed to a staggering low of $22,990 drive-away for a new Golf (including metallic paint), $2000 off the launch price less than a year.The VW deal is so skinny that dealers apparently can't even afford to include free floormats -- but we suspect there would be room to move on the Honda pricing.Which is why customers go in fighting: it's hard for inexperienced buyers to pick the good deals from the bad. As we wrote last week, we don't begrudge dealers from making a profit. The cost to run a dealership and employ all the staff is massive, even before the lights are turned on. Indeed, showroom stock costs the dealership money just sitting there until it's sold.One industry insider revealed it costs an average of $1860 just to sell one car -- regardless of the cost of the vehicle -- when you include dealership rent, wages, advertising, demonstrator models, fuel and other expenses.Which is why it's so perplexing that many dealers don't move heaven and earth in order to move metal. Why don't more dealers break down the barriers, and reveal a fair drive-away price from the get-go?Understandably, not every car has a $12,000 discount in it, like the BMW X1 we mentioned last week, which went from $62,000 to $50,000 in 37 minutes.But surely it's better for consumers -- and the long term health of the dealership -- to charge everyone a fair but competitive price, rather than make no money on some deals and try to make up for the losses on others.This reporter is on Twitter: @JoshuaDowling
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