Car dealers blame Andrews for 'catastrophic' lack of clarity

Australian Financial Review

Paul Smith and Nila Sweeney - Aug 10, 2020 – 2.31pm

Victorian car dealers have been left guessing about how lockdown restrictions can be applied to their operations, saying a complete lack of consultation with the state government has led to a "catastrophic" situation where many are clinging on to survival.

James Voortman, chief executive of the Australian Automotive Dealers Association, which oversees the interests of 3500 car dealers, said the 25 per cent of its member base in Victoria were still struggling to cope with a lack of clarity from the government days after they came into force.

Dealers have shut their doors to walk-in customers, but are still trying to understand how they can provide other services and how much they can offer online.

"It's been incredibly confusing and distressing for members who have to make these decisions on how they structure their businesses during this lockdown," Mr Voortman said.

"So we're not happy with the situation and we're not confident that the situation won't change again because in the few days since the lockdown was announced, we've been given different interpretations and in many cases they're still no clearer in what what we should be doing and how we should be operating."

The Victorian Automobile Chamber of Commerce (VACC) has been told by the state government that only services covering essential and critical "vehicle repair and maintenance" are permitted to open for on-site work, and this does not include routine servicing.

The VACC has advised its members that assessments must take into account the conditions of vehicles when deciding whether to proceed.

"If a tyre has blown out, the windscreen is cracked or the brakes are ineffective, it is VACC’s interpretation that these scenarios constitute essential and critical circumstances and therefore work could be undertaken," the group said.

While many car showrooms are working via click and collect, Mr Voortman said this had limited use for some dealers, as customers were unwilling to make such a big purchase without doing test drives.

He said the industry needed more direct conversations with government to properly understand the strategy and plan for how dealerships could survive.

"We need specific guidelines, so everyone knows whether or which activities they can perform, because we really need clarity," Mr Voortman said.

"It's obviously incredibly difficult, we have been encouraged by the government revisiting the JobKeeper eligibility but the longer lockdown continues, the more distressing it will be for those businesses.

"Dealers are generally quite innovative, they seem to sort of find ways to adapt and we're hoping that they'll be able to find ways to get through this crisis."

'It is catastrophic'

Nick Strauss, managing director of Berwick Motor Group, which has six dealerships across Victoria, said he and his industry peers understood the need to protect public and employee safety, but were furious about the lack of clarity in the rules.

His operations are closed to the general public as he is only allowed to perform services for essential workers, which he is doing at a significant loss, despite JobKeeper payments.

"It is catastrophic, there is no other way to describe what's happening down in Victoria," Mr Strauss said.

"Obviously the pandemic is a terrible insidious disease, but so is the way that the Andrews government has handled this Victorian crisis, it has been just deplorable.

"COVID has been around for five months now, he's had all that time to spend to work out different strategies for different scenarios ... so to be continuing this policy on the run is diabolical, and it is having a terrible effect on businesses like mine."

Mr Strauss said he was keeping his service centres open out of a sense of civic duty, as he knew that doctors, police and other essential service workers would still need their vehicles fixed, but that he was losing a lot of money by doing so.

He has around 200 staff on his books and said 80 per cent are currently sat at home. While supportive of the need to keep workers safe, his anger towards the government stems from a total lack of consultation, and an inability to get explanations about what is and isn't allowed.

"Our whole industry is on a precipice and it's on this knife edge because of the way it has been handled," Mr Strauss said.

"Don't get me wrong, we're not looking for loopholes to try to work here, we understand the pandemic, but had it been handled better, would we be in this position? I dare say not.

"If Andrews spent more time around the table planning for this disaster, rather than going on television for hours every day ... That absolutely makes our blood boil."

​Construction sector

Elsewhere, other trades are trying to get a clear idea of how they can continue to operate under restrictions.

Master Builders Victoria chief executive Rebecca Casson confirmed they have received further clarifications from the state government on the essential types of work that were allowed during the lockdown.

These include critical maintenance and safety works to public infrastructure, public transport and telecommunications infrastructure as well as cladding rectification program.

Early childhood learning, school and TAFE capital projects to meet time-sensitive enrolment demands were also allowed, as well as critical ambulance station works, Victorian Heart Hospital and essential public housing infrastructure.

“The ability to have clients complete contract signings and final inspections will help many residential building projects progress, as will the classing of each dwelling being built on a subdivided block as one small construction site – meaning five workers can work on each dwelling,” Ms Casson said.

“Unfortunately, renovations for inhabited houses will not be allowed unless it's emergency repair work, and this will be a blow for clients that have projects planned.”