Australian 4WD Parts & Accessory Manufacturing

In this article, ACA Research takes a deeper look at the learnings gathered from the AAAA 4WD Industry Council Market Study

The popularity of 4WD utes and SUVs has risen steadily over the past decade. This trend only accelerated in 2020, with restrictions on overseas travel making the prospect of local road trips more appealing than ever, and leading to SUVs making up seven of the ten most popular new vehicles. It is natural then, for this growth to carry through to the 4WD parts and accessories market, which is well illustrated by ARB’s recently released halfyearly financial results. The company posted an after-tax profit of $54m, more than doubling its profit from the same period in FY20. Based on this, it is safe to say the 4WD aftermarket is big business, but just how big is it? According to our latest study on the 4WD market, conducted on behalf of the AAAA, the manufacturing, sale, and distribution of 4WD parts and accessories generates annual revenues within Australia of $6bn. This is direct revenue, with manufacturers then also sourcing two thirds of their raw materials from local suppliers, which sits outside of this figure. Additionally, these 2,100 businesses employ more than 70,000 staff within their Australian operations, further highlighting the scale of their impact on the broader community. While the current results already position 4WD as a key component within the Australian automotive aftermarket, the industry is predicting a 17.5 percent increase in 4WD revenue over the next two to three years. Should this growth be realised, it will naturally have flow-on effects to other aspects of the economy. While many businesses are already sourcing parts locally, the research identified an increasing appetite to distribute, sell, or fit Australian made parts and accessories. Businesses do however recognise that this growth will not be achieved by resting on their laurels, with a range of strategies in place to drive change. These are grounded in a combination of innovation in terms of their product offering, increased operational efficiency, and improved sales and marketing activities. Ultimately though, the positivity and level of activity both speak to the confidence manufacturers have around the growing demand for these parts in years ahead.

Despite this confidence, a number of challenges do exist. In particular, uncertainty regarding the regulatory environment and potential future legislation (eg. relating to post-sale modifications) is creating a level of uncertainty for manufacturers, and others within the 4WD supply chain. While they are willing to invest in the development of new products, they recognise that unexpected changes could legislate them out of a market, despite high levels of unmet consumer demand. Beyond regulatory issues, the sector also recognises the work required to stay up to date with advances in vehicle technology, and the risk of poor-quality copies or counterfeit products (although this could be an opportunity to further leverage the good name of ‘Australian-made.’) In the broader context of an increasing market for 4WD vehicles both within Australia and overseas, this latest study shows the Australian aftermarket is well positioned to capitalise on the growing demand for parts and accessories, including opportunities to grow local production and further support the Australian economy. For further insights from the AAAA 4WD Industry Council Market Study, or to access your copy of the report, get in touch with info@aaaa.com.au This column was prepared for AAA Magazine by ACA Research, our partners in the AAAA Aftermarket Dashboard which is delivered to AAAA members each quarter.

For more information, visit www.acaresearch.com.au or contact Ben Selwyn on bselwyn@acaresearch.com.au

Chart one: The business landscape for Australian 4WD aftermarket parts.

Source: 2020 AAAA 4WD Industry Council Market Study

Chart two: Top 5 strategies for revenue growth.

Source: 2020 AAAA 4WD Industry Council Market Study

Chart three: Top concerns impacting the future of the 4WD parts and accessories market

Source: 2020 AAAA 4WD Industry Council Market Study

RECOGNISE, REWARD AND RETAIN YOUR APPRENTICES

Nominations for the 2021 Capricorn Rising Stars close April 30

Nominations are now open for Capricorn Members across Australia and New Zealand to recognise the efforts of their star apprentices by nominating them in the 2021 Capricorn Rising Stars competition. A quick and easy visit to www.capricornrisingstars. com will secure your star apprentice a nomination for this automotive aftermarket industry renowned accolade. A finalist placement or the overall win will not only earn the apprentice and the Capricorn Member some outstanding prizes, but will also serve to encourage apprentices to continue their chosen vocation for several years to come. Capricorn Rising Stars is unique compared to other apprentice of the year competitions as it does not focus solely on the technical proficiency of each nominee. Capricorn Rising Stars prioritises rewarding apprentices who demonstrate a passion for automotive, a positive can-do attitude and a strong commitment to forging a long and rewarding career in the service and repair industry. This unique judging criteria creates a level playing field for first to fourth year apprentices across all automotive service and repair disciplines. This also means that Capricorn Members can nominate any of their apprentices who demonstrate outstanding character and potential as they continue to learn their craft and display eagerness to further develop their skills. Capricorn Chief Executive Officer Automotive and judging panel member, Brad Gannon, said Capricorn Rising Stars continues to be an important initiative to help stop the loss of apprentices to other industries. “The shortage of mechanics remains a challenge faced by our industry. We also know that completing an auto repair apprenticeship is no easy undertaking,” Brad said. “Through Capricorn Rising Stars we are providing an opportunity for our Members to acknowledge their apprentice’s efforts and reward them for their hard work. By showing our apprentices that they have a bright future ahead of them, we can help keep them committed to their workshops and the auto repair industry more broadly.” Highfields Mechanical owner Craig Baills, who nominated 2020 Capricorn Rising Star winner Gabrielle Clift, said it was important to recognise apprentices’ good work. “Gabby has a work ethic that is rare, and she never expects to be rewarded for what she considers normal effort. But to us, she is an integral part of our team and an employee who improves the performance of those around her,” Craig said. “Our industry will only benefit by the calibre of her attitude, desire to learn and willingness to be the best she can.” Every Capricorn Rising Stars nominee will receive a certificate that is sent to their workshop. An additional $20,000 in cash and prizes will be shared by the overall winner, the top five finalists and the Capricorn Member workshops that nominated them. The 2021 Capricorn Rising Stars prize pool once again makes nominating your star apprentice very rewarding. The overall winner will receive $5,000 from Castrol, a Capricorn Rising Stars trophy, along with all of the prizes that the top five finalists receive. These include $1,000 from Castrol, a $1,000 Repco voucher and tickets to two Repco Training Masterclasses. The prizes don’t stop there – the Capricorn Member workshops who nominate the top five finalists will also be rewarded with a 12-month Repco Autopedia subscription. Additionally, the overall winner’s workshop will receive enrolment in the Workshop Whisperer’s Service Advisor Pro online program, which is valued at over $3,000. Capricorn thanks long-term Capricorn Rising Stars program sponsors Castrol, Repco and the Workshop Whisperer who have donated these fantastic prizes.

For more information, visit www.capricornrisingstars.com

JOBMAKER HIRING CREDIT SCHEME

To participate, you will need to check your eligibility, register, and nominate eligible employees

The JobMaker Hiring Credit scheme is an incentive for businesses to employ additional young job seekers aged 16–35 years. Eligible employers can access a JobMaker Hiring Credit of up to $10,400 for each eligible additional employee they hire between 7 October 2020 and 6 October 2021. If you and your new employees are eligible, you can register and then claim JobMaker Hiring Credit payments for 12 months for each new job filled with an eligible additional employee. To be eligible to receive JobMaker Hiring Credit payments for a JobMaker period, you must: • check you are an eligible employer. • employ eligible additional employees. • register for the JobMaker Hiring Credit before your first claim. • satisfy the headcount increase condition. • satisfy the payroll increase condition. Detailed information including a step-by-step guide for employers is available at www.ato.gov.au/General/JobMaker-Hiring-Credit Employers that are not eligible to claim the JobMaker Hiring Credit may be able to claim other support payments from the Department of Education, Skills and Employment. For more information on available options from this Department, please visit www.dese.gov.au

For more information on the Job Maker Hiring Credit Scheme, please visit www.ato.gov.au/General/JobMaker-Hiring-Credit

BURSON AUTO PARTS LAUNCHES $50K TRADE PROMOTION

The new promotion is part of the celebrations for Burson Auto Parts’ 50th anniversary

Australia’s Burson Auto Parts achieves a major milestone in 2021 with the trade supplier of parts, tools, equipment and accessories celebrating its 50th Anniversary. Burson Auto Parts trade customers across the country can look forward to being a major part of the company’s celebrations through a number of major promotions and events throughout 2021. The year of celebration is already underway with the exciting Burson Auto Parts 50th Anniversary $50,000 giveaway. All Burson Auto Parts trade account customers who purchase specific supplier product as promoted during the year (no minimum spend value) will be automatically entered into the draw to win a randomly selected $1,000 Visa Gift Card every week through to December 20, 2021. In addition to this year-long cash giveaway there are more exciting promotions coming your way in 2021. Making Burson Auto Parts’ Golden Anniversary even more exciting is a $50,000 trade customer cash giveaway which forms another exciting part of the festivities. All trade account customers are eligible to take part with one entry gained for every $50K worth of purchases made all year to December 2021. One of Burson Auto Parts’ many loyal trade customers will have 50,000 reasons to celebrate the Aussie company’s 50th Anniversary at the end of 2021. To ensure that the hard working and dedicated Burson Auto Parts team members are rewarded for their efforts during 2021, a special 50th Anniversary Team Member of the Month Award will be presented to the highest performing staff member located in each of the 12 regions nationwide. A $500 cash prize and a memento certificate will be presented to the winner each month. According to Anthony Hughes, Burson Auto Parts General Manager – Marketing, no stone has been left unturned to make 2021 a year of celebration and continued growth. “We wanted to ensure that we could celebrate our 50th Anniversary together with our loyal trade customers and all of our team members throughout the entire year,” Anthony said. “These promotions will ensure that this is exactly what we will be doing. “It is particularly good to emerge from the challenges of 2020 and head straight into a major year of celebration all the way through to December to mark such a major milestone for our company. “We look forward to our customers, team members and suppliers making the most of what is sure to be a fantastic year.” Burson Auto Parts says it is Australia’s preferred trade supplier of parts, tools, equipment and accessories and explains it was established in 1971 by company founders Garry Johnson and Ron Burgoine, who initially sold parts from their car boots and cash vans to service stations and automotive workshops across Melbourne. The first Burson Auto Parts store was opened in Braybrook (Victoria) in 1978. The company grew gradually to 25 stores across Victoria and New South Wales by 1996 and to 50 stores by 2004. Burson Auto Parts expanded into South Australia by 2006 and Queensland by 2008. Existing store acquisitions and greenfield establishments followed across the Australian Eastern Seaboard, Western Australia and in Tasmania during the following years. Burson Auto Parts reached the milestone of 100 company owned and operated stores in 2012. Burson Auto Parts now has 194 stores operating across every state and territory in Australia and will reach 200 strategically located stores during its 50th Anniversary year in 2021. Parent company, BAPCOR Limited, was listed on the Australian Stock Exchange (ASX) in 2014. BAPCOR Limited is the Asia-Pacific’s largest automotive aftermarket specialised company with an unparalleled footprint of locations across Australia, New Zealand and Thailand covering all facets of the industry from wholesale and trade to retail and service.

For more information, visit www.burson.com.au

HYBRID BATTERY REMANUFACTURING EXCHANGE PROGRAM LAUNCHED

The new program has been introduced to the market by Injectronics

Injectronics’ new hybrid battery remanufacturing exchange project will deliver a scalable component re-use and resource recovery program of retired battery packs from hybrid-electric vehicles. Part of IM Group, Injectronics says it is Australasia’s leading supplier of quality new and remanufactured automotive electronic components, as well as the preferred repairer of electronic and mechatronic parts. A hybrid battery has often been seen as a single use part, but Injectronics says its ability to remanufacture battery packs that are faulty, slow to charge or no longer performing at an effective level has created a circular economy that will maintain battery life long after manufacturer warranties have lapsed. Supported by the Federal Government’s Automotive Innovation Lab Access Grants program – a key element of the Government’s $100million Advanced Manufacturing Fund – the initiative prevents batteries, plus its toxic materials, from being discarded into landfill. Once available to market, Injectronics says it is envisaged that the cost of a remanufactured battery for the end consumer will be between 60 and 80 percent less than a new unit – with the company saying its project will offer considerable environmental advantages as well as cost savings down the line. In preparation for the project start – which is expected in the next several months – Injectronics will have a bank of remanufactured hybrid battery packs ready for exchange as required. The hybrid battery exchange project works in conjunction with automotive workshops. For the full story, see page 59 of this magazine.

For more from Injectronics, visit www.injectronics.com.au or www.im-group.com.au

MTAA SUPER AND TASPLAN TO BECOME SPIRIT SUPER

The Super funds will be known as Spirit Super after completion of their merger on 1 April 2021

To be born out of the much-anticipated merger of MTAA Super and Tasplan, Spirit Super will be Australia’s newest Industry Super Fund with approximately $23 billion in funds under management and approximately 326,000 members across Australia. The merger follows a successful year for MTAA Super and Tasplan, with both funds receiving Platinum ratings by SuperRatings and being named ‘Best Value for Money’ funds for 2020.

“That’s what makes this merger so exciting. This is not about a big fund absorbing a smaller fund. It is about two successful funds coming together to get even better,” MTAA Super Chief Executive Officer, Leeanne Turner, said. “It is a true partnership that will provide a better super experience and outcomes to members across the nation.” Leeanne was also pleased to announce a reduction in administration fees for all Spirit Super members. “The details are being worked through, but there will be a drop in administration fees when Spirit Super kicks off. So right off the bat, members will start seeing the benefits of the merger,” Leeanne said. Tasplan Chair Naomi Edwards said the new fund name was an important milestone to mark in the merger process. “Our name is our future, so it was important we embraced something our members could be proud of and inspired by. I think Spirit Super nails it,” Naomi said.

For more information, visit www.mtaasuper.com.au

ARB ACQUIRES AUTO STYLING TRUCKMAN GROUP

Truckman is an industry recognised brand leader in the UK

ARB has announced its acquisition of Auto Styling Truckman Group, which trades as Truckman. Truckman is a leading manufacturer and distributor of utility accessories in the United Kingdom. It is principally focused on rear of vehicle products such as canopies, bed liners and general utility vehicle products. The acquisition meets ARB’s aim of expanding international distribution and aligns with the company’s evolving product strategy. The Truckman business is based at its 4,860m2 head office and central distribution hub in Birmingham in the UK. It was founded in 2002 and currently employs around 80 staff. ARB will retain all existing staff and management and the Truckman business will continue to operate in the usual way with the added support of ARB’s expertise and resources. Michael Wheeler and Richard Langman, the long-term Chairman and Managing Director of Truckman respectively, will continue to manage the business. The maximum net cash purchase of AUD 39.44 million includes AUD 17.92 million payable upon completion, deferred payments of AUD 7.17 million and a further amount of up to AUD 14.16 million subject to performance hurdles over the next three years. The purchase includes the business operations of Truckman and a property from which the business operates. The purchase is being funded from ARB’s existing cash resources and ARB says the business is expected to operate profitability from the commencement of ARB ownership, effective 2 March 2021. The acquisition adds scale to ARB’s global business and provides a base for the Group in Europe’s largest utility vehicle market. In its announcement to the ASX regarding the acquisition, the ARB Board said it welcomes the employees and management of Truckman to the ARB Group and looks forward to working with them to grow the business.

For more from ARB, visit www.arb.com.au

VASA WIRE & GAS POSTPONED

The convention has been rescheduled to July 2022

VASA, Australasia’s peak trade association for specialists in auto air-conditioning, electrical and thermal management, has taken the tough decision to further postpone its flagship Wire & Gas conference until 2022 due to ongoing uncertainty caused by regular state border closures and snap lockdowns that it anticipates will likely continue well into this year. The rescheduled conference will run across 29-31 July 2022, with the venue remaining at the refurbished and rebranded JW Marriott Gold Coast Resort and Spa in Surfers Paradise (Queensland), which has been cooperative in VASA’s decision to again postpone. Light is visible at the end of the COVID-19 tunnel with the first shipment of vaccines rolling out this week, but VASA is well aware that until some stability returns, members and other potential delegates would be discouraged from making the substantial financial and time investment to attend Wire & Gas from all over Australia and New Zealand. To honour the commitment of its delegates, sponsors, exhibitors and speakers, VASA said it must do its very best to ensure this flagship event goes ahead without the additional stress and inconvenience of rolling the dice against the potential of further outbreaks. VASA says the majority of speakers and sponsors have already recommitted to the new dates, so the 2022 event promises to be as unmissable as originally planned. VASA continues to work on details of the rescheduled event and will make further announcements in due course.

For more information, visit www.vasa.org.au