Advance Auto Zone

The Australian Auto Market was steady for 2006 and continued its strong run of 10 years by achieving its second best year on record. A stable Government, strong economy and a general feeling of wealth all contributed to the strong sales result.

Looking at the numbers closely and we start to see some changes that occurred in several market segments as the impact from the fuel crisis took its toll on the more fuel inefficient large passenger vehicles and raised the sales volume of smaller cars.

Domestic sales volume now makes up about 20% of all sales and will possibly diminish more as the consumers buy more imported fuel efficient cars and turn away from the Australian Designed ‘family cars’.

Much development effort over the past several years has gone into producing high performance vehicles that handle to ‘European standards’ to attract the fast money. Cars that today are less relevant than a few years ago as fuel prices bite the boy racers wallet. This has possibly been at the expense of developing a locally built diesel engine. It is hard to believe that Ford or GMH have not seen fit to offer a diesel alternative to their line up of petrol engines. Once again they are caught flat footed as the market changes are moving away from their offer.

Future risks are the actual break even point for annual production. Common knowledge suggests that an OEM needs to produce 60,000 vehicles of one model per annum to make money. Certainly Mitsubishi are a long way from that target. Without an export strategy how can the South Australian Government sensibly call for assistance from the Federal Government by getting them to delay the lowering of the import duty?

The lowering of import duties combined with the strong dollar will increase the availability of leading edge imported products. Add to this the desire for fuel efficient and high performance diesel engines from the higher quality diesel fuel and the local OEM’s are likely to suffer more. We see that the automotive retail landscape will continue to evolve with the consumers being the winners.

Perhaps the argument for a lowering of the National fuel consumption will take on more weight due to environmental concerns than protecting a few thousand jobs. Sounds like a problem for environmental evangelists like Peter Garrett.

The opportunity for Chinese OEM’s to enter the market is clear. Their investment needed to meet or exceed the emission standards is the same as their European export push. The only road block is their ability to produce a right hand drive vehicle and several have already built these vehicles.

Passenger Market – 598,394 units sold or 62.2 % of the total market.

Overall down - 10,410 or – 1.7%.

Off from a previous record year.

Up - Light Passenger 21.1%

Down – Large Passenger – 18.4%

SUV Market – 170,847 units sold or 17.7% of the total market.

Overall down - 9,445 or - 5.2%.

Move into more expensive SUV’s

Down – Medium & Large SUV’s – 14,246.

Light Commercial Market – 161,791 units sold or 16.8% of the total market.

Overall down - 6,087 or – 3.6%.

Heavy Commercial Market – 31,489 units sold or 3.3% of the total market.

Overall down - 174 or – 0.1%.

SWOT ANALYSIS

Strengths:

Domestic sales volume steady at / - 1 million units sold per annum.

Mature market makes subtle changes due to environmental differences such as fuel reaching # $1.50 per gallon.

Weaknesses:

Domestic sales volume is 20% of the 1 million units sold per annum.

Domestic vehicles have no diesel offer.

Domestically produced vehicles require higher volumes to break even.

Opportunity:

For importers the timing is good for inexpensive and fuel efficient diesel vehicles.

Export sales are upside growth for Mitsubishi, GM & Ford.

EG: Toyota planning 90,000 units per annum for export.

The strength of the Australian dollar because of our exports makes imports cheaper.

Threat:

80% of cars sold are imported currency sensitive.

Cheaper imports could break smaller manufacturer’s ability to compete.

What is the ‘break even’ volume for local manufacturers?

EG: Mitsubishi sold less than 20,000 of the 380 model in 2006.

Chinese imported vehicles where a low COGS and margin requirement will re-rate the industry as the Koreans did in the late 1980’s.

Cost of fuel staying at or rising above #$1.50 per liter.

Domestic OEM’s will have to compete with a lower import duty from 10% to 5%.

Robert Lane has over 20 years experience in the retail automotive industry and 10 years of automotive business consulting. He is currently a partner and senior consultant for comengine.com/ Comengine Automotive Consulting China in Shanghai. For more article like this one visit comengine.com/auto-china-news/signup.asp Automotive Industry China News.

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You’re excited! You’ve made the decision to purchase a new car. Follow the tips below and you can save thousands of dollars on your new car purchase.

Shop around before you buy. One of the most common mistakes people make is not shopping around before they make that big purchase. The first thing you should do is check the automotive advertisements in your local newspaper before you buy. Many dealerships offer great deals in these advertisements but when you look more closely at the advertisement they will add the words “only 2 available at this price”. The dealerships add these words because they could not make a profit if they sold every car at the special ad prices. Usually, the few cars they offer at the great prices listed in the advertisement may not be in the color or style you like but you will definitely save thousands by purchasing one of these specially priced cars. Don’t wait! If you see an advertisement in your local paper for cars that say “Only 2 available at this price then act quickly. These cars sell fast! Dealerships offer great prices on only a few cars to entice you to visit their dealership. A common response by dealerships when you visit and ask about these cars is: I’m sorry… those cars have been sold already. So act fast! If the cars have been sold then ask the dealership to call you when more cars are available at the price listed in their advertisements.

NEVER negotiate based on monthly payments. One of the most common questions a car salesmen will ask you is: “How much do you want to spend per month?” If you answer incorrectly… that salesman is going to know he has a sucker in his hands! The proper response to that question should be: “The monthly payments are not important - the sale price of the car is what is most important to me.” Never enter a dealership and ask: “Can you get me this car for $XXX per month?”

If you are planning on trading in a car then you should know what the resale value of that car is before you begin negotiations. Check the Kelly Blue book value of your used car - you’ll be glad you did.

Dealer Invoice - One the fastest ways you can show that car salesman that you are an intelligent car shopper is to ask them what the “dealer invoice” is on the automobile you are interested in purchasing. What’s a dealer invoice? It’s the price that the dealer pays for the car from the manufacturer and you should be negotiating the purchase price of your new car based on the dealer invoice price… not the sticker price on the car window. I recently leased a Mercedes 450GL and during the whole parking lot sales pitch the salesman assured me that I would be getting the best deal in town. By the time we were sitting in his office and he had drawn up all the papers to sign, he did not once mention how I was going to get “the best deal in town”. This is when I dropped the bomb. I said: “So where are the great deals you promised me? I see no deals at all in this contract and you just got done telling me for an hour in the parking lot what a great deal you were going to give me.” The salesman replied: “What are you looking for?” The first thing out of my mouth was: “What is the dealer invoice price on the car?” He showed me the dealer’s price on his computer and I offered him 1% above it. He reluctantly accepted the offer and I saved over $5,000.00 in less then 30 seconds!

When you first get on the dealer’s lot, do not immediately ask what the dealer’s invoice price is on the car you are interested in or you may scare the salesman away. The best thing to do is to wait until that salesman has spent a lot of time with you and has you sitting in his office ready for you to sign the sales agreement. That’s is the best time to spring the question. The salesman is much more likely to cut you a deal after he has just spent an hour or more of his time convincing you to buy a car from him.

Don’t be afraid to walk out of the salesman’s office if you do not get what you want. Be polite - stand up out of the chair you are sitting in and say: I’m sorry but I don’t think this is going to work out - I’m going to do a bit more shopping. I guarantee you that you will be offered a better price or some added extra options on your new car. Remember - that salesman has just spent a lot of his time trying to sell you a car and if you start to walk out on him at the end he will make an effort to stop you from leaving.

Good luck on negotiating your new car price.

Rob Miller is a freelance writer and product reviewer. Gunther Gifts is the perfect place to select a engraved gift for yourself or loved one: gunthergifts.com gunthergifts.com. Personalized gifts, groomsmen gifts, wedding favors, wedding invitations, sports theme gifts, Zippo lighters, Leatherman tools, Swiss Army Knives, custom barware and glassware, Cross pens and so much more are available for all your gift needs at Gunther Gifts. Get a custom license plate frame for that new or used car. Make a statement to the world.

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If you are towing a trailer for the first time you will want to have everything going for you. Changing from a single vehicle to what is essentially double that, is not a step to be taken casually. The hitch you use to link your tow vehicle to your trailer is a key element in your safety and the safety of other motorists on the road.

A great deal hinges on the choice of hitch in the world of towing. There are a number of factors that you need to take into consideration when making the decision. Before doing anything else, you will need to consult your vehicle owner’s manual. This comprehensive source of information will give you valuable information regarding the towing specifications of your vehicle.

You will want to stay well within the parameters outlined in the manual, being ever cautious not to place the rig under more pressure than it can safely handle. Remember that what you can tow under ideal towing conditions and what you can tow under challenging conditions are two completely different things.

The tow combination that you put together needs to have capacity to spare in order to handle these challenges when they arise. Both the tow vehicle and the hitching system have weight capacities that impact the safety of the whole rig.

Once you have determined the tow vehicle’s maximum towing capacity you will be able to choose the trailer and hitch that is the best fit. Tow hitches come in varying classes to match the weight capacities of the vehicle and the gross trailer weight, known as the GTW.

Trailer hitches are specific to each vehicle so you need to find the exact hitch for your vehicle model and year. Most online websites will have you key in these details before coming up with the hitch for your vehicle.

The most common hitches are receivers. They are the ones that you see on most SUVs, trucks, vans and RVs. They come in Classes specific to their weight carrying capacity. Class I hitches have a GTW of anything up to 2,000lbs. They are the best option for light duty tow vehicles and commonly allow for the towing of smaller loads like bike racks and utility trailers.

Class II hitches, with a GTW of 3,500lbs, are commonly used on passenger vans and the less powerful SUVs. Class II hitches are capable of towing smaller, lighter travel trailers safely. Some class II hitches can have their tow capacities expanded in combination with a good weight distribution system. Details on this option should be available in your vehicle owner’s manual.

Class III hitches have a more generous tow capacity of up to 5,000lbs. They are the most common hitch for the more powerful SUVs and trucks and allow for heavier duty towing and a broader range of weight distribution systems that balance out the trailer load between the wheels of the tow vehicle and those of the trailer. The addition of this kind of hitch system offers enhanced safety in the form of improved steering and brake control.

Once you have selected the correct hitch for your vehicle and trailer and you have had it shipped to your door you will be faced with a mysterious bundle of odds and ends that bolts onto your vehicle frame without welding. Installation times vary from 30 minutes to an hour so don’t rush. If you have doubts about the finished product of your work you might want to invest in a second opinion from a professional before heading out onto the highway.

Burke Jones is a frequent contributor to the trailer-hitch-depot.com Trailer Hitch Depot, an online resource for trailer-hitch-depot.com/trailer-jacks.htm Trailer Jacks and trailer-hitch-depot.com/hitch-accessories.htm Hitch Accessories.

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