Search

The Australian motor vehicle industry is faced with uncertainty because of the year 2000 implementation of the goods and services tax (GST), falling used-car prices, and possible changes in consumer buying habits. In July 1999, sales were down 8136 units from July 1998. In 1999, the passenger car market was down 5.3% from 1998. A new car in July 2000 will cost 8.3% less than it does in 1999, but used values will fall 10-12%, affecting trade-in value. However, Toyota Australia plans in 2000 to launch a new six-cylinder vehicle, despite declining market share for such vehicles.

The Asian financial crisis has altered the economic landscape for South Korea's chaebols, or conglomerates. Most chaebols have built their market share on governmental favoritism, protectionist policies, debt and expansion. The country's new government seeks to convert to a free market, including foreign investment and debt reduction programs, over the chaebols' protests.

The diverse policies of the four major car makers in Australia following the introduction of the goods and services in 2000 is discussed, with focus on the difficulties of gaining market share, particularly for Mitsubishi.

Many luxury cars made by various companies are briefly evaluated and priced. Luxury automobile prices in Australia are not expected to change due to the federal election. Only automobiles with prices over $40,000 (Australian) are considered. Companies represented include Alfa Romeo, Audi, BMW, Holden, Honda, Lamborghini, Lotus, Maserati, and Volkswagen, among others.

Ford Motor Company of Australia hopes to reclaim market share with the introduction of the six-cylinder AU Falcon for government and private automobile fleets. Holden's VT Commodore outsold the Falcon during the first six months of 1998, 45,783 to 29,376 cars. One threat to recapturing fleet sales is the forthcoming introduction of the Holden Vectra. With the discontinued production of Toyota's Corolla, Australian fleet buyers are expected to stay with tradition and buy Australian cars.

Australian fleet managers find they have a variety of choices in determining which car make and model will serve a company's employees. Increasingly popular are 4WD vehicles over V6 models. While they are more expensive to buy and maintain, they do carry excellent resale value. Outsourcing to fleet management companies, such as Fleet Systems, is one way of holding back costs while insuring that all maintenance is necessary and legitimate. Fleet managers, also, need to challenge current standards of residual value as published in Glass's Guide to protect the resale value of cars.

Ford Australia's discount pricing of automobiles could cause greater problems for the company's market share. The Vectra will now be built in Australia, rather than imported, and could become a popular fleet car if the price is right. There will be problems exporting the Vectra due to the Asian economic crisis.

Automobile manufacturers face two primary difficulties in the market that are compounded by the Asian financial crisis. Most of them have made large investments in Asian car factories and have now been forced to scale back. Manufacturers also face increased competition from Asian producers who are expected to weather the financial crisis by increasing exports.

Australia's National Motor Vehicle Theft Task Force has been tasked by the National Anti-Crime Initiative with developing a national program for reducing motor vehicle theft. In 1995-96, Australia had a reported 126,000 motor vehicle thefts, which represented a 12.7% increase since 1993. Professional motor vehicle thieves are responsible for an estimated 25,000 motor vehicles annually.

The dealer franchise in the Australian motor industry is undergoing major changes at a time when the country's vehicle retail business is in a very volatile state. The motor industry has many choices in 2001, including conventional factory franchise retailing, e-commerce sites, and joint ventures between car makers and dealers.

A review of Australia's 500 largest private companies is presented.

The prospects for the Australian car market in 2000 are discussed. Particular attention is given to Holden, which began 2000 as the market leader for the first time since 1981.

Malaysian-based car maker Proton Australia is drastically restructuring its market efforts, which to date have been comparatively subdued, in response to low brand recognition and sales. It will sell Protons at set prices from new showcases, reduce its dealerships by half, offer car sales via the Internet, and adjust warranties. Additionally, a national tour of Proton cars accompanied by Malaysian cultural events took place this fall.

Ford Motor Co, which has favored independent dealership networks since Henry Ford first started the company, plans to form joint ventures with dealers in the US. The company would hold a minority share, and retail outlets would become larger in size but fewer in number. Ford hopes to set fixed prices for cars by distribution savings including putting salespersons on salary.

Automobile dealers must decide which cars they will order well before the cars are released into the market, and it is helpful for them to plan in advance. Major new releases into the Australian market are chronicled in each month from October 1998 to May 1999. Products include a new BMW coupe and roadster in November 1998 and Toyota's Lexus IS200 in April 1999.

Automobile manufacturers Toyota and Honda have developed earth-friendly cars that exceed world emission standards. Huge research and development outlays have kept the costs of these vehicles high. Consumers in countries with lower gas prices are unwilling to pay $55,000 for cars like the Saturn EV-1 electric vehicle. Mass production is not feasible mainly due to the lack of an inexpensive yet efficient storage battery.

Australia's Federal Chamber of Automotive Industries is forecasting a record number of 1998 car sales that could reach 750,000. The industry sold 722,427 in 1997. The luxury car market has increased 22.3% during the first six months of 1998. The 4WD rate has soared 51.3% during the same period. Disposable income is an unwavering factor as shown by the two-year waiting list for the Benz SLK roadster coupe.

Lease Plan Australia is one Australian fleet management company that believes it is worthwhile to pursue contracts with smaller companies whose fleet demands are under 100 cars. Lease Plan has benefitted from poor resale value of six-cylinder cars since 1997 to build up an inventory that has quality but practical value. It offers other choices and enhances its services to company car drivers by helping them with registration, insurance, planning their automobile tax liability and other car management needs.

Internationally-owned fleet management companies are gaining market share in traditional Australian business arenas. JMJ Fleet Services, which is owned by GE Capital Fleet Services, has secured a contract with BHP. Another fleet company, ORIX Australia, is owned by ORIX Corporation of Japan and it acquired Ranger Truck Rental and Leasing as part of its goal to triple its business by 2003. Lease Plan is owned by the Dutch financial services company ABN AMRO. Domestic fleet managers and automobile financial services are countering these invaders with expanded operations and new contracts.

Ecotrans invented an engine which runs on liquefied petroleum gas and works in diesel vehicles. The engine creates much less pollution than traditional diesel units, far below international environmental standards in 1998. If tests of the engine remain encouraging, it will be implemented in bus fleets in Brisbane and Melbourne. Ecotrans' development was supported by the Gogas division of Shell and by the National Bus Company of Australia.

The Driver Education Centre of Australia (DECA) has targeted 100 of the country's top companies for a special chauffeur and senior management driver retraining program. DECA officials claim the program enables firms to save on insurance premiums, maintenance and fuel costs, and on lost work hours. The program also advertises lower accident rates and improved self-esteem.

The Australian motor vehicle industry has had a excellent 1997. Final sales figures for 1998 could reach 720,000 vehicles, according to Ford Australia president David Morgan, compared to the 630,000-650,000 expected. Two major new models, the Toyota Camry and the Holden Commodore, were introduced, and the country's auto exports are hitting full steam. An overview of various automakers' new product plans for 1998 is presented.

The new tax agreement reached between the Australian Taxation Office (ATO) and the motor vehicle industry introduces a new tax calculation formula that dealers believe is a thinly-veiled revenue drive. The tax applies to upgrades and modifications to new vehicles. The ATO insists that the new formula clarifies existing law and provides taxation consistency.

Garry Yost heads Australia Power Industries Pty Ltd (API), which he describes as the country's largest fiber-optic cabling company. API's turnover for fiscal 1997 totaled A$16.5 million, with A$24 million forecast for 1998. Biographical information on Yost is included. He grew up in Tasmania and has traveled widely. He abandoned his South African fortune in 1994 and bought into API.

Auto dealers peddling luxury motor vehicles are spoiling their customers with great service, including 24-hour road assistance, which has become standard in the market niche. Other services for luxury motor vehicle buyers include free detailing and financial services, including insurance. Astre Finance has introduced its 'White Knights' loyalty program for luxury motor vehicle clients which gives them good financing rates and buyback guarantees.

The Australian luxury automobile and motor vehicle market is hot. Sales are on the upswing as prices decline, and industry analysts forecast sales exceeding 700,000 for 1997. Auto dealers love to peddle luxury automobiles and sport utility vehicles due to their high profit margins, which gives them ample room for discounting to attract buyers.

The Australian automobile insurance industry is seeking greater control over insured motor vehicle repairs in order to reduce insured losses by creating their own repair shops. Independent automobile repair shops, bristling at the insurance industry's characterization of them as corrupt and antiquated, are fighting back. The automobile repair industry is largely unregulated.

Speed cameras have been fitted in Australia since 1989 and as fatality figures drop, the police claim that they are effective. Not only are there fixed Gatso cameras at junctions, but mobile cameras are also fitted on police cars. The first cameras recovered their cost in fines collected within a few days and the government of Victoria are finding them a source of revenue. Reflective number plates are banned and those individuals or companies who cannot identify the driver of their cars are also fined. Australia now has the lowest death toll in its history but this could also be due to other safety factors.

Australia-based Select Design Technologies has been in discussions with General Motors and Ford Motor Co. about SDT's new transmission system. The company has raised about $1.25 million in investments and is looking to generate $5 million more to fund its expansion.

2001 has been a strange and unpredictable year for the automobile industry and 2002 looks to have the same kind of turbulence to it. They industry will see many challenges such as exchange rate fluctuations, uncertain oil prices, and increases in insurance premiums.

Issues concerning the launch of the Mini-Cooper car are discussed. In particular the marketing strategies based on a high profile Web site are examined.

Ford Australia usurped Holden's hold on the fleet market by signing a contract with Telstra in 2001. The 1.2 million Australian dollars contract over two years brings an end to Holden's ten year relationship with Telstra.

The automobile manufacturer Holden released its new Monaro coupe in October 2001 and its marketing strategy highlights the exclusivity of the car. The coupe only has a small production run and is expensive.

Issues are presented concerning the influence of Ric Hull, currently the managing director of Kia Australia, in turning around the fortunes of the Hyundai and Daewoo automobile companies in Australia. The automobile market is discussed.

Issues concerning the top management battle taking place at Ford Motor Company between the two chairman, Jac Nasser and William Clay Ford Junior is discussed.

Ford Australia is seeking to increase its 50% stake in its retail joint venture to 80%, buying out dissatisfied dealer shareholders at A$0.90 in the dollar. It would then split the venture into four large dealer groups headed by the top operators in Sydney, Australia.

The Australian car industry had forecast a record year in 2001, but the first half of the year has not lived up to promise. The effect of GST has not been so dramatic, but manufacturers are hopeful June will see good sales.

Volkswagen Group Australia is to invest around A$35 million in relaunching the brand in Australia. It aims to reach sales of 20,000 to 25,000 units by 2006, but is likely to face significant competition.

Issues concerning the introduction of input credit claiming on Australian Goods and Services Taxation and the impact on the struggling automobile industry are discussed.

Issues are presented concerning the return of two automobile manufacturers, Rover and Renault, to the automobile market in Australia. The large advertising and marketing campaigns launched by the companies are discussed.

Issues concerning the standards of customer treatment in the luxury car dealing industry are discussed. Particular attention is given to ways of funding extravagant customer services, such as showing films while waiting for car servicing.

Increased orders from the US is expected to increase Mitsubishi Motors Australia exports from 12,036 units in 2000 to 32,000 during 2001, helping improve profitability.

The challenges facing Ford Australia Pres Geoff Polites are discussed. The company's market share has dropped to 13.7%, and there have been problems with its retail joint venture in Sydney, Australia.