News - General News
Car buyers ‘changing rapidly’
Winds of change: Car retailers are headed into uncharted waters as new-generation vehicle buyers look to other modes of transport.
Motor industry warned of shakeout as new-gen car buyers change habits
22 July 2015
THE new car market is about to undergo dramatic changes due to urban congestion
and an indifferent attitude to car ownership by younger generations, according
to a Victorian automotive industry leader.
Victorian Automobile Chamber of Commerce chief executive Geoff Gwilym said the
dealer network was already contracting.
Mr Gwilym also said dealers needed to be aware of the need to band together to
present a united front on political matters.
Addressing a Victorian Automobile Dealers Association meeting of leading
dealers from many brands, Mr Gwilym said the automotive industry was facing the
same sort of revolution that had convulsed the printing industry over recent
“If, in 1960, someone would have told the printing industry that the basic
principles of setting movable type using the principles established by
Gutenberg five centuries before were no longer relevant, no one would have
believed them,” he said.
He said the automotive sector was facing a similar wave of change.
“Changes to the drive capacity of vehicles, safety technologies and increased
performance for less money are incremental changes that we can see coming,” he
“These changes, of course, will change buying behaviors and attitudes that
people have to cars.”
The modern vehicle is no longer a reflection of a person’s wealth or social
standing, he said. For people in Generation X (1960s to 1980s) and Generation Y
(1980s to early 2000s), cars are more a necessity for travel and a means to an
“These are the generations who live with cracked mobile phone screens,
expensive clothing with no labels and a general disrespect for the middle
classes – even though most of them come from there.”
Left: VACC chief executive Geoff Gwilym
Mr Gwilym warned dealers that Gen X and Gen Y would be buying the next
generation of new cars.
“They buy almost everything on line, have poor brand loyalty and are likely to
get most of their car buying advice via a blog, Facebook, LinkedIn, Twitter or
Mr Gwilym said car ownership would become less attractive as more people opt to
live in high-rise apartments in metropolitan and outer metropolitan areas.
“These are mainly close to shopping centres and public transport and have
limited infrastructure for parking and car use.”
Pressure on new car sales was also coming from the burgeoning car-share sector.
Mr Gwilym said the Go-Get company was growing at a rate of 45 per cent a year
and already had 65,000 members and 2000 vehicles.
The negative factors were increasing, although Mr Gwilym said no one knew for
sure when urban concentration and transport congestion would see new car sales
flatten out and then decline.
Industry data indicated that the number of vehicle sales outlets across the
country had declined from 4745 in 2012 to 4602 in 2014.
This reflected a need to achieve economies of scale through larger premises and
operations, as well as buying power and marketing efficiencies.
And, while dealerships still were heavily reliant on skilled labour, that would
change in coming decades.
”The way we sell, manage and service vehicles will be constantly under
analysis, with every measure applied to removing labor costs while remaining
relevant and profitable.”
Mr Gwilym said the increasing concentration of the new vehicle industry meant
that dealers had to work more closely together when presenting to governments.
The VACC and VADA had invited the newly appointed chief of the Australian
Automobile Dealer Association (AADA), Mr Bruce McDonald, to the lunch.
“VACC is very keen to work with the new AADA,” Mr Gwilym said.
He said almost half of all new and used car dealers were members of the VACC
and around 80 per cent of new car dealers were members.
“The two organisations share many of the same goals.
“Having separate national organisations with competing messages is bad for all
stakeholders and will not help government in setting industry policy.
“We can do more, working together and ensuring we have coherent industry
“VACC looks forward to sharing resources with AADA for the greater good of the