Dealers mull independent peak group

THE future of the Australian Automobile Dealers Association (AADA) will be discussed over the next few weeks to decide if it becomes a separate industry association dedicated to pressing dealer issues to governments and car-makers.

The breakdown of the Motor Trades Association of Australia (MTAA) and the formation of the break-away Australian Automotive Industry Association (AAIA) in May threw open the future of representation of dealers.

Many of Australia’s largest dealership groups have taken the view that their interests were poorly served by the now all-but-neutered MTAA and are considering the possibility of starting their own organisation from scratch.

Their view is that a totally focused dealer secretariat would not be distracted by all the issues that beset the wider retail motor industry, which ranges from service stations, body repairers, recyclers, independent service operators and independent used car dealers, whose best interests are often at odds with those of car dealers.

The member states of the new AAIA (New South Wales, Victoria/Tasmania and Queensland) met a week ago to discuss the future of the AADA and where it would sit in the new AAIA structure.

A proposal for a new AADA has been developed and it will be put to a meeting of dealers within weeks.

Left: VACC executive director David Purchase.

VACC executive director David Purchase told GoAuto the AAIA would recommend a new dealer association that would become a member of the AAIA in its own right just as the VACC was a member of AAIA.

“But the issue (for the dealers to decide) is whether they become completely divorced from AAIA or not,” he said. “That is what we are considering.

“There are certainly some advantages in AADA being a stand-alone association with little connection to AAIA and there are certainly some advantages for the opposite.

“Each state has been talking to some of their big dealers. We have a good feel for how they think they should be organised and we have taken all that into account in the proposal we will be putting to them.

“I am sure that proposal will involve a separate association that will be a member of AAIA in its own right but the remaining question will be whether it will become completely divorced from AAIA or not.”

Mr Purchase said that if the dealers chose to set up independently of the AAIA, the move would be expensive from scratch.

“It would be a waste of resources,” he said.

“On the other hand, being completely subsumed within AAIA, as dealers were in MTAA, would not always work to their advantage either.

“So I think there is a compromise here where there is a hybrid model where they will have their own identity and be able to pursue their own issues without being totally divorced from AAIA.”

Mr Purchase said the AAIA would also be reluctant to lose the value that the dealers brought to the table as highly experienced businesspeople.

“They certainly add value to the debate and the consideration of issues and I don’t want to lose that value-add,” he said.

Mr Purchase said that having their own secretariat would not guarantee success for dealers.

“In fact it may be that some governments will look at their association which will obviously not be as substantial (as the AAIA or each of its state affiliates) and take less notice of them,” he said.

“There are advantages in numbers and size and I think governments tend to listen to the bigger organisations more than the smaller organisations.

“So if they are part of us that makes us bigger and governments tend to listen to us.”

He said that organisations such as the VACC, which is a $28 million-a-year business in Victoria, could offer significant resources that the dealers would have to fund on their own from scratch if they were to go it alone.

He added that the strong networking with political leaders, local politicians, members of the bureaucracy and other government bodies which had taken years to develop would be missed by dealers at both a state level and a federal level if they chose to tread totally separate pathways.

Mr Purchase said he believed that AAIA could do “a much better job” of focusing on dealer issues than MTAA because there would be “someone totally dedicated to dealer issues within AAIA with dedicated support staff”.

“There is value for both of us to work together, but I do accept that there has to be a much greater focus on their important issues, one of which is franchising, which is something the MTAA did not do for them and the AAIA will do.”

Meanwhile, Mr Purchase scotched suggestions that the breakaway AAIA motor industry group would re-form under the MTAA banner now that the executive director Michael Delaney has stood down from the body.

“That is most unlikely. I would say highly improbable. We believe that that brand is no longer appropriate," he said.

“The notion that we are a whole lot of motors trades bodies is an old fashioned view that no longer reflects what is a very sophisticated industry.

“That is why we have called the new body the Australian Automotive Industry Association.”

Mr Purchase said he was still talking with Western Australia and South Australia which have yet to join the AAIA, and he said he “remained hopeful that they will join the new body”.

A key reason for the breakaway was that it was felt that Mr Delaney could not hold dual roles – one representing employers through the association and the other representing employee interests through the MTAA Super fund. Mr Delaney has since resigned from the association but retains his role in MTAA Super.