Ignition Magazine Australia | December 2021

DECEMBER 2021 - JANUARY MARCH 2022 2021

FUTURE RIDE THE MORPHOZ

Have a Cracker Christmas

LAST CHANCE: WIN A $500 HOLIDAY HAMPER! ARE YOU WORKING ON YOUR BUSINESS? Or just in it?

THE BIG PARTS SHAKE-UP! How EVs will hit your profits.

DRIVING LESSONS And car care these school holidays.

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Have a Cracker Christmas Win a $500 Holiday Hamper

Stuff more than your stockings with a hamper full of goodies from Woolworths at Work.

Simply shop with Woolworths at Work in November and December to receive 1 x entry for every $50 spent.

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capricorn.coop/shop | (AU) 1800 327 437 Competition prizes include 2 x $500 Woolworths at Work Hampers to be given away in separate draws taking place in December and January. Eligible Capricorn Members will receive 1 x entry into the December draw for every $50 spent with Woolworths at Work on a Capricorn trade account between 1 – 30 November. Eligible Capricorn Members will receive 1 x entry into the January draw for every $50 spent with Woolworths at Work on a Capricorn trade account between 1 – 31 December. Hampers will be delivered within 4 weeks of each prize draw. Products displayed in this advertisement are included for demonstrative purposes only and may not be included in the hampers. For full competition terms and conditions please visit capricorn.coop/tc.

CONTENTS DEC 21/JAN 22

David Fraser Group CEO

4 Event Calendar

CEO’s message

Events are starting to kick off!

4 Your new NSW/

Have you ever looked at the world’s most successful brands and wondered what made them so great? As someone leading an amazing organisation focused on supporting you in your business, I do this all the time. And I’ve come to some conclusions.

While I don’t think there’s a specific recipe for success, I do think there are a number of essential ingredients that are common to great leaders and great companies. I firmly believe that anyone in business, no matter the size of their enterprise, can enjoy real success if they embrace these ingredients—and that includes you and your business.

The example I’m going to use is Apple, because it really provides the modern template.

When a couple of twenty-something college dropouts started working out of Steve Jobs’ family garage in 1976, they had no idea what Apple would go on to become.

What’s made them such a success? A lot of things. Here are four of those ingredients, and how you can leverage them in your own business: Constantly innovate and appeal to a wide range of people.

Keeping up with innovative new vehicle technology requires constant investment in equipment and skills development. Customers expect us to be able to solve their problems, and there’s not always a textbook available. We need to be able to think creatively. And we need to develop the people skills that allow us to attract and retain customers (and employees), so we can interact positively with whomever comes through the door.

Become a brand in and of yourself.

Steve Jobs, as the face of Apple, was a brand in his own right—and his leadership was integral to the success of the company. You are your own brand; be the face of your business in your community. Be recognisable. Research also shows people who choose independent workshops like talking to the person who is working on their car, so get to know your customers.

Have a clear plan to make a difference.

Success doesn’t happen overnight or by accident. Apple had clear aims to make a difference. What distinguishes them is they’re not afraid come up with innovative solutions and then make them better and make them better. So, look around, see what others are doing, come up with ideas, and then execute them better than anyone else, and do it better.

ACT Director

5 Capricorn Risk Services

Has been awarded 5 star service by LMI Group

6 Capricorn Rewards Not over the Christmas treats? Get your wishlist in order

10 Future Ride 12 Driving Lessons The Renault Morphoz

And car care these school holidays

14 Member Ride 15 Next Gen Manufacturing For a sustainable future

16 2022 is Coming 18 Working On Your

How to plan for the year ahead Have a relentless focus on customer service.

While it’s obviously the products that drive Apple’s success, the company is also really focused on providing great customer service. That helps them get buy-in from their customers, winning them a customer for life. Provide your customers with warm, friendly, exceptional customer service every single time and they’ll keep coming back.

Business ...or just in it?

You don’t have to be a company the size of Apple to enjoy the success of Apple. You can take the ingredients of their success and create your own recipe. Success won’t be instant. Don’t forget, Apple started in a garage. The secret is to constantly work at becoming better. It’s okay to take incremental steps towards improving your systems, processes, time-management, skills, and customer service. Every step forward is progress.

20 7 Tips 22 Employing an

Yours in cooperation,

The information and incentives you need

David Fraser Group CEO

For running a financially efficient workshop

Apprentice

26 The Big Parts

Shake-up:

How EVs will hit your profits CAPRICORN IGNITION DECEMBER 2021 JANUARY 2022 3

NEWS

CALENDAR of events Western Australia South Australia KADINA TRADESHOW 17 February 2022 SOUTH AUSTRALIA GOLF DAY 4 March 2022

20 January 2022

Queensland TOOWOOMBA TRADESHOW 23 February 2022

ESPERANCE MEMBER NIGHT 23 February 2022

Login to capricorn.coop today and select Events to register your attendance. For further information please call our Events team on 1800 327 437 or email events@capricorn.coop

Let us introduce your new NSW/ACT Director, Lydia Stjepanovic had the opportunity to vote for their next Member Director. All Members have one vote when deciding their new Director, so every vote is equally important.

Now the tallies are complete, Capricorn is proud to announce the next Member Director for NSW/ACT is Lydia Stjepanovic.

Lydia is a second-generation automotive services business owner with a Bachelor of Business and Commerce (Management) from the University of Western Sydney and an Advanced Diploma in Business (Marketing) from Macleay College.

Capricorn is proud to introduce our new NSW/ACT Member-elected Director after Russell Becker’s retirement in October 2021.

Capricorn is a member-based organisation and Member representation on the board helps ensure Members’ interests are safeguarded. Member Directors use their skills, knowledge and expertise in the industry to help ensure Capricorn is delivering for Members, reflecting Members’ interests and living up to Capricorn’s promises and values.

Between 15 September 2021 and 15 October 2021, NSW and ACT Members

Eight years ago, Lydia left a corporate career to “pursue a childhood passion” and return to the family business — Barrie Auto Electrics in Hornsby, NSW — as Service and Operations Manager.

“With me, I brought a wide skill set including marketing planning and implementation, strategic analysis and development, experience-driven customer and stakeholder engagement, and procedural development,” she said.

In 2019, Lydia and husband, Igor, bought Barr Automotive (formerly Denis Barr Automotive, and just around the corner from the family business). The business achieved a 20% turnover increase in its first year and looks set to beat that milestone this year, having also grown the customer

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base by some 60%. The workshop has now won or been a finalist in numerous automotive and small-business awards.

Lydia said she fell in love with the industry at a young age and from 12 had “consciously attended every AAAE, VASA, MTA, Capricorn, and AAAA convention, gala and trade event with the family business, taking holidays from other employment to be there”, which she said demonstrated a long-term commitment to the industry.

“My history, education and experiences provide me with a unique set of skills and perspectives that has seen rapid success in my business, and I am passionate about contributing to the betterment of our industry and Capricorn Society Members,” she said.

“It is my unique viewpoint, set of skills, and ability to take swift and decisive action, analyse and adapt to new situations quickly that have led to success in my own business, as it will in a directorship position.”

On behalf of the team at Capricorn, we welcome Lydia to her new role, and look forward to working with her in the future.

Every year elections are held in a different Capricorn zone throughout Australia and New Zealand. Keep an eye on Ignition to see which zones are holding elections in the coming years.

TM

5 stars for Capricorn Risk Services Capricorn Risk Services is proud to announce new service awards recognising the quality of their claims service.

When buying insurance or mutual protection, what you’re really buying is a promise. A promise that you’ll get the support you need when things go wrong. Well, it must be comforting to know that Capricorn Mutual’s promise has been given a 5-star rating by independent claims and risk management consultants, LMI Group.

Capricorn Mutual handles over 4,000 claims each year across a range of products such as commercial property, commercial motor, liability and motor vehicle. The liability and private motor sections received 5-star ratings, with 4.5-star ratings for commercial property and motor claims.

LMI Group rates the quality of claims services provided by Australian insurers, including mutuals, recognising outstanding performance and driving positive change within the industry. In its assessments, LMI Group evaluates publicly available complaints resolution statistics, supplier surveys and the quality of claims-related product benefits.

“This is a fantastic achievement and I’m so pleased to receive external recognition for our hard work”, said Michael White, Capricorn’s Claims Manager. “Claims is a tough job and it’s nice to know how we compare against our competitors. It also gives us great satisfaction that our Members are receiving the service they deserve.”

commitment to keeping their Members at the heart of their business. With more than 40% of Capricorn Members now with Capricorn Risk Services, more Members than ever are now receiving a 4.5- to 5-star claims service.

Capricorn Mutual is an exclusive risk protection mutual for Members, that is designed specifically for automotive businesses. Not currently with Capricorn Risk Services? To request a quote for protection, call your Risk Account Manager today, or visit capricorn.coop/risk.

Receiving such recognition is not only an outstanding achievement for Capricorn Mutual but recognition of Capricorn Risk’s

Contact Capricorn Risk Services 1800 007 022 I info@capricornrisk.com I capricorn.coop/risk Products sold through Capricorn Risk Services Pty Ltd (ABN 93 111 632 789) are: (i) discretionary risk protection products issued by Capricorn Mutual Ltd; and (ii) general insurance products issued by a range of insurers and brokered through Capricorn Insurance Services Pty Ltd. Before deciding to acquire any product you should consider the Product Disclosure Statement available from Capricorn Risk Services Pty Ltd to see if the product is appropriate for you. Capricorn Risk Services Pty Ltd is a Corporate Authorised Representative (No. 460893) of Capricorn Mutual Ltd (AFSL 230038) and Capricorn Insurance Services Pty Ltd (AFSL 435197).

Go for goals What’s on your wishlist?

WISHLIST SPENDING!

Setting a Capricorn Rewards goal is an easy way to see how many points you are saving.

Simply browse capricorn.coop/rewards and click the target icon when you find something you might want.

You can then see the real value of the points you’re earning as you get closer and closer to your savings target.

Some great goal ideas include: Womens REVA 11 Piece Set

Sony Cyber-shot 20.1MP Digital Camera

M7 Remote Eletric Trolley

iPhone 13

Unagi Scooter Model One E500

Simply click the target icon to set your Capricorn Rewards goal

Seiko Men's Astron GPS Dual Time Watch

LG Gram EVO 17' WQXGA Laptop

Products subject to availability.

capricorn.coop/rewards

Australian Auto Aftermarket Expo The Future is Here

The Australian Automotive Aftermarket Association (AAAA) is excited to officially launch the 2022 Australian Auto Aftermarket Expo (AAAE).

Taking place at the Melbourne Convention & Exhibition Centre (MCEC), and co-located with the Collison Repair Expo, the Expo is the nation’s only comprehensive exhibition for Australia’s $25B aftermarket industry. The show will bring together the industry’s best and brightest, and showcase hundreds of the country’s leading companies, all under one roof 7 – 9 April 2022.

With the theme ‘The Workshop of the Future is Here’, and debuting a range of fantastic new initiatives and features, the Expo is an unmissable event. The Expo showcases the latest vehicle repair and servicing equipment, parts, tools and accessories, new technology and trends, an Awards evening, plus a comprehensive training and education program.

“We are excited to be able to move forward with our preparations for the Expo – an event run by the industry, for the industry. After a challenging couple of years for everyone, our industry is more excited than ever to come together to celebrate, learn, conduct business and network,” said Stuart Charity, CEO of the AAAA. “The automotive industry in Australia is undergoing unprecedented change driven by the complexity of the car parc, changes in vehicle technology and the changing capabilities and needs of our workforce and customers.

Vehicles with advanced driver assistance systems, pass through technology, embedded telematics (‘connected car’), and hybrid and electric powertrains are on Australian roads today. These vehicles will need to be safely repaired and maintained for their useful life, anywhere in Australia.

“AAAE 2022 will bring together experts from across the industry to provide the very latest information and practical tips on how and when businesses will need to adapt to these changes. The Expo aims to help visitors prepare for the future, to embrace and capitalise on the evolution of the industry, and the trends and technology that are rapidly developing.”

display of state-of-the-art equipment and technology as well as regular presentations from industry experts covering the very latest information on Workshop Management Systems, EV repair techniques, ADAS calibration, and diagnostics and tooling, including J2534 pass through technology.

The launch of the all-new 4WD Innovation Zone is a massive addition for the Expo and has been welcomed by the booming 4WD sector. This dedicated area provides a unique opportunity for companies involved in 4WD modification, accessories and tuning to promote their company through a trade-only B2B platform.

For the first time, the Expo will incorporate a standalone seminar stage on the show floor, which will deliver a free comprehensive training and education program and enable exhibitors to showcase their latest products, technology and service offerings to a targeted trade audience.

Other exciting components of the 2022 Auto Aftermarket Expo include a modified and classic vehicle display area in the show concourse, celebrity appearances, interactive displays and competitions.

“We are very excited to announce that Repco has thrown their support behind the show, taking out the Major Sponsor package for AAAE 2022, and we’d like to thank them for their outstanding support,” Stuart said.

“We can’t wait for April, to open the doors and finally welcome our industry back together. We know visitors will have a fantastic time and arm themselves with the knowledge to thrive, ready for the exciting future that awaits.”

The 2022 AAAE is gearing up to be the best ever. With huge exhibitor demand, expect over 250 of Australia’s leading brands to proudly display across 19,500 sqm of floor space at the MCEC. With free entry available to all members of the automotive trade, the Expo is expected to see 10,000 visitors attend over the 3-day event.

For more information and to register, head to autoaftermarketexpo.com.au or collisionrepair.com.au

The Expo continues to evolve, and the launch of a number of exciting new initiatives will build further value for exhibitors and attendees visiting the show. This year’s Expo will feature a ‘Workshop of the Future Pavilion’ which will include a CAPRICORN IGNITION DECEMBER 2021 JANUARY 2022 7

TM

What you can do to ensure a painless claim No-one wants to have to make a claim against their protection policy. But, when you do, you want it to be as painless as possible.

Yet many policy holders do not take the simplest of steps required to do just that — and it can blow out the time taken to get things back to normal from perhaps as short as a week, to many months.

So, what are the secrets to ensuring a painless claims process? We asked Auckland based Loss Adjuster Debra Young to comment. She is part of the team at Mainland Claims Management who are independent Loss Adjusters engaged by providers such as Capricorn Mutual to manage claims.

A Loss Adjuster’s role is to assess and manage claims ensuring the Member receives their entitlements as per the protection wording and to validate the loss.

Take out the right protection Debra’s first tip to ensure a painless claim starts at the time you take out the protection, ensuring you have taken out the correct coverage.

It’s important you are honest with your Risk Account Manager and correctly value your assets or you may find you are under protected at claim time.

“One example is the employee’s tools of trade,” Debra said. The standard coverage is $5,000 per employee, and up to $10,000 per event. However, $5,000 to replace tools and equipment is not very much and if there are more than two employees you will likely require a higher limit of protection.”

Keep an up-to-date asset list Next, make sure you have a comprehensive asset list which you update every time you

make a new purchase for home or your business.

“Capricorn Mutual requires the original proof of purchase receipts for the damaged or lost items,” Debra explained. “If you cannot provide original receipts, we’re going to have a challenge validating the claim.”

Not having an asset list is the major reason for delays in processing claims. Debra gave an example of one business owner who had to photograph the tools he found amongst the ashes in his burned-out premises, to try to prove ownership after a fire.

Debra recommends using a secure web-based service to store copies of all your receipts and photos of your assets. Some services will even allow you to add serial numbers, photographs, and other information.

At the very least, Debra suggests storing electronic copies of all your receipts in the cloud — not just for your business, but for anything you buy for your home, too.

Every time you buy a new tool or piece of equipment, update your asset list and store the receipt electronically. Do it as soon as you buy the item, so you don’t forget.

Photograph or video everything What if you don’t have receipts?

“If you don’t have the original purchase receipts, we suggest you photograph all your tools and equipment including serial numbers where present and open drawers and cabinets and either video or photograph all your belongings both commercial and domestic” Debra said. “That is a starting point and upload the data to a cloud-based asset register.”

ownership.”

Debra said it is important the photos or videos clearly show exactly what an item is, including any serial numbers, brand names and model information.

Read your SOP and PDS It might not be the most fun you’ll ever have, but carefully read both your Schedule of Protection (SOP) and your Product Disclosure Statement (PDS).

The SOP sets out the cost of and level of any protections granted to you. It also details the applicable excesses and government charges as well as any special conditions applicable to your protection. The PDS is an important legal document that contains information and details of the protection, including for Members with Capricorn Mutual. It is designed to help you understand all you need to know about your protection provider, for example, Capricorn Mutual so that you can make an informed choice about whether or not to join a protection provider like Capricorn Mutual and apply for protection.

“It’s really important that you read the two documents together and understand them,” Debra said. If you don’t understand them, talk to your Risk Account Manager .

Painless claims are possible By following Debra’s advice it’s possible to get your claim processed quickly and painlessly.

Unfortunately, it’s advice many people don’t take seriously enough until it’s too late.

That can needlessly turn a process that should take days or weeks into one that can take months.

What you do next is up to you!

“That way at least you have evidence of

Contact Capricorn Risk Services 1800 007 022 I info@capricornrisk.com I capricorn.coop/risk Products sold through Capricorn Risk Services Pty Ltd (ABN 93 111 632 789) are: (i) discretionary risk protection products issued by Capricorn Mutual Ltd; and (ii) general insurance products issued by a range of insurers and brokered through Capricorn Insurance Services Pty Ltd. Before deciding to acquire any product you should consider the Product Disclosure Statement available from Capricorn Risk Services Pty Ltd to see if the product is appropriate for you. Capricorn Risk Services Pty Ltd is a Corporate Authorised Representative (No. 460893) of Capricorn Mutual Ltd (AFSL 230038) and Capricorn Insurance Services Pty Ltd (AFSL 435197).

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TM

Stars RETURNING FEBRUARY 2022

FUTURE RIDE

SHAPESHIFTING MORPHOZ GETS LONGER, GOES FURTHER What do you do if you need to make a 700 km trip but your electric car only has a range of 400 km and there’s nowhere to charge up en route?

It’s exactly the kind of scenario people often use as a reason electric vehicles will never work in a country like Australia, with vast distances that are sometimes devoid of service stations. After all, you can’t just throw a bit of extra fuel in a jerry can and take it with you.

Or can you?

Renault has tackled the range issue in its Morphoz by giving the vehicle the ability to extend its length by 40 cm (from 4.4 m to 4.8 m) to fit in an extra 50 kWh battery.

Hence the “morph” in the car’s name: it can literally transform itself to accommodate the battery. The car gets a little bit more length, and you can get nearly twice as far.

It’s a clever solution: a shapeshifting SUV crossover. But will it ever become reality?

Well, so far this particular concept from the Morphoz concept car hasn’t made it into production. Indeed, the whole idea might even have already been surpassed by technology. Renault’s new Megane E-Tech SUV, unveiled at the Munich Motor Show in September 2021, has two charging options. The second option takes 30 minutes longer to charge, but gets you an extra 300 km. (Interestingly, the electric Megane is shorter than the Morphoz, at 4.2 m in length.)

But that doesn’t mean morphing cars aren’t on the horizon. In August Audi unveiled its (very cool) concept for an electric roadster called Skysphere. It extends its wheelbase by 25 cm (to 5.2 m) when it switches from sports to grand touring mode.

Let’s get back to the Morphoz.

Renault says Morphoz is “a 100 per cent electric adaptable crossover concept car which charges by induction even as it is

being driven”. It is connected and equipped with Level 3 autonomous driving functions.

“The driver is free to move their eyes and hands once delegation has been made,” Renault says. “(The driver) can use the car’s multimedia system to dictate emails, text messages or play multimedia content, for example.

“The vehicle can handle the distance from the vehicle in front, staying in lane even on bends, and moving in traffic jams. However, the driver must be able to take back control very quickly (a few seconds) upon request of the system. It may occur in bad weather conditions or in the absence of road markings, for example.”

So, that’s the drive, what about the bling?

“At the driver’s approach, the Morphoz runs a light sequence to show that the driver has been detected and recognised by the vehicle’s sensors,” Renault says. “A wave is all that is needed to unlock the vehicle and open its doors. Their reverse-hinged opening, combined with the absence of a B-pillar, makes it easier for passengers to get into the welcoming passenger compartment, which is illuminated by the yellow of the seat fabric and centre console.”

There’s a futuristic steering wheel with a 26 cm screen in the centre, that displays driving and safety information. Behind this steering wheel there is a surround dashboard and multimedia screen. And what’s a concept car these days without a crazy seat concept? No chaise lounge or marble magazine rack for Renault, they’ve chosen a swivelling passenger seat instead.

Then there’s the sustainability aspect. The Morphoz uses a lot of recycled materials, including wood for the dashboard, plastics for the inner doors, and fabric for the seats.

Hopefully they’ll find a way to recycle all those old jerry cans, too—because it looks like we’re not going to be needing them anymore.

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FACT BOX • • • • • • • • • • •

Length: 4.40 m (City version) / 4.80 m (Travel version) Width: 2 m Height: 1.55 m Wheelbase: 2.73 m (City version) / 2.93 m (Travel version) Engine: 1 electric traction engine Batteries: 40 kWh (City version) / 90 kWh (Travel version) Power: 100 kW (City version) / 160 kW (Travel version) Charging: Static and dynamic induction Drive wheels: Front Onboard connectivity: 5G Infrastructure connectivity: 5 GHz Wi-Fi

CAPRICORN IGNITION DECEMBER 2021 JANUARY 2022 1 1

ADD SOME CAR CARE TO THE

DRIVING LESSONS THESE HOLIDAYS

by Paul Marinelli

The summer school holidays for older teenagers allow many opportunities for driving lessons as they hone their motoring skills and develop more confidence behind the wheel.

The better weather generally allows for longer drives and more experience with highway driving, which is very important for young drivers to practice in both the day and the night in wet and dry weather conditions.

Something that tends to be overlooked throughout the lengthy Learner Driver period is for our newest drivers to be taught some car care and safety check fundamentals prior to taking to the road on their own.

Even though modern cars from the lowest cost economy models upwards are equipped with reliable engine and electronic system monitoring when there are potential issues, this should not detract from teaching our newest drivers the car care basics. This ensures that they have the ability to check and deal with relatively minor mechanical issues if necessary.

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Things like regularly checking water, oil, tyre pressures (and how to refer to the optimum manufacturer specified levels) along with the correct function of all vehicle lighting. More importantly, the ability to remove and replace a flat tyre - or to refill a tyre in the case of there being no factory spare, is also a relatively easy skill that is totally neglected these days.

Sadly many of our younger drivers these days have no idea if their car even has a spare tyre! People all too often say “How long has it been since you had a flat tyre?” but even if it has been years, none of us want to see a young driver stranded due to an issue which can be so easily fixed without the need for outside assistance.

Even with roadside emergency services now being abundantly available for new and for older cars, having some background knowledge in relation to how a car operates, along with some fundamentals of the easier automotive maintenance items is never a bad thing for young drivers.

"Many new drivers have expensively become unstuck by placing the wrong fuel into a car."

Basic knowledge like this reduces panic during times of mechanical or electronic failures, enabling our newest drivers to have more of an understanding of the issues that can bring these computers on wheels to an abrupt stop.

In the case of older cars, things like checking battery terminals are clean and tight, air filters clean and air hoses tightly attached without cracks or other wear damage, ensuring the vehicle jack and wheel spanners are in the boot and all are in working order. Checking fuses should an electrical problem take place – and a major doosie for young drivers with older cars is to ensure that the spare tyre in the boot is actually full of air! This is something that is discovered far too often when it is needed the most!

Tyre pressure maintenance is important for brake and steering response and it even reduces fuel consumption and tyre wear. Teaching your child to read the tyre pressure sticker located on the inside door panel (or inside the fuel cover) to identify the optimum air pressure for the front and rear tyres and to learn how to easily do this at service stations is more than worthwhile.

Teaching new drivers that waiting too long to refuel not only runs the risk of running out, but this practice can also cause fuel filters to become blocked with all the gunk and particles that inevitably accumulate at the bottom of a fuel tank. If they are driving a diesel engined car, teaching them to use the same diesel pump at the same fuel station during their first months of driving to avoid putting in the wrong fuel is also a good tip - many new drivers have expensively become unstuck by placing the wrong fuel into a car.

Ensuring that all vehicle windows, headlights and tail lights are clean and operating correctly is also easy and important to do. Taking a look underneath the car to ensure that all is in place and there are no oil or water leaks is important, while topping up oil and water is also a very simple process.

Happy driver training and here’s to a safe summer holiday period on our roads, made safer by patient young driver training with some car care basics thrown in.

CAPRICORN IGNITION DECEMBER 2021 JANUARY 2022 1 3

MEMBER RIDE

Lucky Kelvin’s Mustang win

a dream come true...

One of the most fascinating parts of any Member Ride is finding out how the person and the car came together.

Over the years, we’ve heard every kind of wonderful story: Members who’ve restored a car they grew up with, Members who’ve driven across the country to collect a wreck in a paddock and lovingly restored it, Members who’ve trawled car ads for years to find the exact make and model they’ve always loved — and everything in between.

But the “how did you meet” story between Kelvin Parker and his 2021 Ford Mustang GT is a new one on us.

And it might just make you a little bit jealous. “I won it at the Crown Casino, in a competition with Coke,” Kelvin said.

“It is a Limited Edition, race red Mustang GT with a black shadow roof and black stripes, valued at $80,000 — which is not a bad deal for buying a $5.90 bottle of Coke with dinner at the Junction Grill.”

Before you start preparing your voodoo doll, Kelvin is well aware he’s the luckiest man in Australia. It’s hard to imagine talking to someone more stoked about his good fortune than Kelvin.

“I’ve been in love with Mustangs for a long time,” he said. “Every time I go to the United States, I hire one. I’ve been doing that since 1970.

“It’s the roar, the sound, the power: you just can’t beat a V8. I just love a muscle car.

“But I’ve never owned one, and I would probably never have bought one, either, because it was never a family car and, economically, they’re not really that viable.” But the big fuel bills are now Kelvin’s to enjoy — and he’s not complaining.

Kelvin owns Prestige Sunroofs in the southern suburbs of Perth. He and partner, Someekhae, went to the casino just after New Year’s Day this year. Someekhae enjoys a flutter and Kelvin enjoys the restaurant – and both of them were in luck that day.

“We had the meal and my partner went down to play on the machines, while I stayed for dessert,” he said. “No rush, I said, but 15 minutes later she came back and slapped a ticket on the counter.

She’d just won a mini jackpot on one of the machines — $860. “I thought, well that’s a good start to 2021.”

It was as Kelvin was paying the bill the waiter pointed out he’d had a Coke and was therefore eligible to enter a competition. He shoved the information in his pocket and went home. The next day he was at the office doing some paperwork when he found the competition slip in his jacket pocket. Noticing the prize was a red Mustang, he decided to enter.

“I looked at the terms and conditions on the page and it said the competition closed on the Sunday, that Sunday. So, I thought, ‘Oh well, at least I don’t have to wait long’.

“Then on the Monday afternoon the phone rings, and it’s Crown Casino.”

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The rest, as they say, is history.

It took a few months for the Mustang to arrive in WA but Kelvin said the agonising wait was worth it (it actually arrived on his birthday — an amazing coincidence). “It’s amazing to drive,” he said. “It’s so good to handle; it grips the road.”

Kelvin said the Mustang was going to be a weekend and special occasion drive. “It’s not the sort of car I’m going to park in the street,” he said.

A five-litre V8, 10-speed automatic, the Mustang has a full-width LED dashboard.

“It means you can change all the gauges around to exactly where you want them,” Kelvin said. “It’s got a full LED lighting system in the headlights and sidelights.” The leather seats have heating and cooling.

What it doesn’t have is a sunroof and, unfortunately because of the shape, one can’t be installed. Still, you can’t win ’em all, can you?

While the story of how Kelvin finally came to own his own Mustang might not have followed the usual path, we reckon it’s a pretty good yarn. It’s also a good reminder that you’ve got to be in it to win it — and you just never know your luck!

THE NEXT GENERATION OF VEHICLE MANUFACTURING As the automotive industry looks towards a more sustainable future, major manufacturers across Asia, Europe and North America are embracing the brave new world of industry 4.0. Here is a snapshot of some of the current activities and future plans.

Nissan Motor Corporation has unveiled its “intelligent factory” initiative to use artificial intelligence (AI), the internet of things (IoT) and robotics to manufacture next-generation vehicles utilising a zero-emission production system in Japan. With the intelligent factory, Nissan is moving in the direction where most of the major car manufacturers have. Either already taken significant steps or preparing to in the near future, according to GlobalData, a leading data and analytics company. Nissan has invested US$290m on its Tochigi plant, north of Tokyo. Bakar Sadik Agwan, senior automotive analyst at GlobalData, said: “The Tochigi plant will begin Nissan’s transition into the fourth industrial revolution and will make its vehicle manufacturing more flexible and efficient.” The production line replaces labour with robots for a range of processes that ensure high quality of production with reduced lead time.

Mercedes-Benz is already in the game with its “Factory 56”; a flexible, digital, and green production line based on Industry 4.0 principles. Markus Schäfer, a board member at Mercedes-Benz Cars explains the concept and the basic operating principles of one of the most state-of-the-art automobile production halls in the world: “In Factory 56, we are consistently implementing innovative technologies and processes across the board according to the key terms ‘digital, flexible, green’. We have created a modern workspace with greater attention to the individual requirements of our employees. All in all, in Factory 56 we have significantly increased flexibility and efficiency in comparison to our current vehicle assembly halls – and of course, without sacrificing our premium quality. In this way, we are setting a new benchmark in the global automotive industry.”

Ford’s “Blue Oval City” also aims to use “always-on” cloud-

connected technologies for quality manufacturing and will become a vertically integrated ecosystem for Ford to assemble an expanded line-up of electric F-Series vehicles.

This will include a BlueOval SK battery plant, commitment from key suppliers, and full recycling, with the new Tennessee assembly plant designed to be carbon neutral with zero waste to landfill when fully operational. “This is a transformative moment where Ford will lead America’s transition to electric vehicles and usher in a new era of clean, carbon neutral manufacturing,” said Ford Executive Chair Bill Ford. “With this investment and a spirit of innovation we can achieve goals once thought mutually exclusive – protect our planet, build great electric vehicles that Americans will love and contribute to our nation’s prosperity.”

rely entirely on renewable sources such as geothermal, solar and wind for all its energy needs, which would be developed internally. “Global automakers’ race to net-zero has been picking up the pace. The shift in focus from ‘green cars’ to complete ‘green manufacturing’ has been disrupting the traditional automotive manufacturing. The disruptions are also aimed at utilising advanced manufacturing technologies to enhance manufacturing quality, reduce lead time and combat certain other challenges faced by the auto industry, such as the labourintensive nature of the business and the unavailability of a skilled workforce. Not to forget the operational challenges and long production shutdowns that automakers faced due to COVID-19 recently,” said Agwan.

“Disruption in manufacturing and the seriousness placed on net-zero targets by Nissan and other OEMs signals a loud and clear message that car manufacturers are flexible and ready to transform. This is important in the aspect of growing electrification and the invasion of technology players aiming to disrupt automotive manufacturing and breaking the conventional labour-intensive and heavily supplier-reliant manufacturing,” he concluded.

Returning to Nissan, the intelligent factory aims to achieve carbon neutrality across the life cycle of its vehicles and become carbon neutral by 2050 by improving energy and material efficiency across processes. The company aims for 100% electrification of its manufacturing by 2030 and will

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Planning for the year ahead

by Geoff Mutton

The lifting of COVID lockdowns may have come at the right time for many businesses, but there is no denying that for most, 2021 will go down as an extremely tough year. Hopefully, the end-of-year rush might make up for some of the year’s losses.

The end of any year is such an important time for the auto repair industry, allowing owners and staff to switch off from work, catch up with family and recharge the batteries.

The end of the year is also a time of reflection on the wins and losses of the past year, and is the right time to plan for the year ahead. This planning doesn’t need to be a complex 20-page business plan. It can be as simple as sitting down for a couple of hours with pen and paper and evaluating your business.

Write down all your thoughts and ideas. If you don't write them down, they will remain just a thought, and thoughts are too easily forgotten.

Here’s a list of subjects to get you started.

Human resources

Ask yourself these questions: • What training might you and your staff need?

• Are there tasks or services that only the owner can perform?

• If business expansion or diversification is on your agenda, what training will be needed?

• Are any staff members underperforming?

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• • • • • •

Do any staff need a pay review?

Are staffing changes needed?

Are any of your staff a flight risk and if so, what impact will that have on the business?

Do staff job agreements or job descriptions need updating?

Should team meetings take place more frequently than in the past?

Have you performed an appraisal or review with all staff in the past year?

Tools, equipment, and information • • • •

Are any new tools or equipment needed in the workshop or office?

Does anything need updating, repairing or replacing?

Do you have access to adequate technical data and information?

Should better use be made of any tool or piece of equipment?

Building and location • • • • • •

Does your office or workshop need a face lift?

Is new business signage needed?

Should a cleaning roster be established?

Do the staff lunchroom and amenities need cleaning or replacing?

Does the workshop need decluttering?

Are personal items taking up valuable space?

Marketing • • • • • • • • • •

Do you regularly contact your existing customer database?

Are your customers aware of everything you do?

Do you need to reconnect with old customers?

Are you proactively asking for online reviews?

Do you have a modern and up-to-date website that is mobile friendly?

Do you rank on Google's first page based on key terms within your area?

Is investment in some Google ads needed?

Are any of your sponsorships or advertising campaigns not working?

Does any of your branded literature need updating?

Do you need to introduce yourself to any local businesses?

•

Does your business need to be more active on social media?

Financial management • • • • • • • • •

Is a meeting with your accountant overdue, or perhaps you need a new accountant?

Do sales targets or other key performance indicators (KPIs) need to be reset?

Should KPIs be reviewed every month from now on?

Should the labour rate be increased?

Are your stock mark-ups sufficient?

Does the business need a better system for tracking and charging technician time?

Are diagnostics being properly charged out?

Do any suppliers need changing?

Are there any ongoing general expenses that are no longer needed?

Internal processes • • • • •

Is the phone system adequate and can everyone in the business answer the phone correctly?

Do any customer service concerns need addressing?

Are your technicians adequately reporting additional items that need to be brought to a customer’s attention?

Do any core processes need reviewing and updating?

Do any members of the workshop team need retraining?

SWOT Analysis List the business’s strengths, weaknesses, threats and opportunities. Describe how you plan to address any weaknesses or threats, and how you plan to capitalise on strengths and opportunities.

The above list is intended to get you thinking about your business and excite you about the future. When you've completed it, keep it handy, preferably in a private place in your office, so it’s not easily forgotten.

Now set a monthly reminder in your diary for a list review, when you can tick the completed tasks and ideas, and select which business improvement job comes next.

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BUSINESS BUILDING

Are you working on your business, or just in it?

No-one else is going to do it. As the leader of your workshop, you need to make time to think about the direction you want your business to go in, and put plans in place to make it happen.

How much time do you spend planning, developing, learning and growing your business, as opposed to working on customers’ cars, ordering parts, and fighting with your apprentice?

If the answer is “not that much”, and you want to have a prosperous business, it might be time to set a new course for success.

If you’re spending a lot of time working in your business – working on cars, doing admin, and keeping suppliers, customers and staff happy – then you’re not working on your business.

Working on your business means thinking about and setting goals and tackling the problems that hold you back in the long-term.

Your job as the owner, or manager, of your business is not only to oversee daily operations, but it’s to set the standard and know where you’re trying to go between now, next year and the period after that.

Setting goals for growth, customer experience and profitability is a powerful way to focus the mind and remind you daily why you’re doing what you’re doing.

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We know from the State of the Nation Report 2021 that 69% of Members have plans in place to grow their business in the next 12 months. Over 60% of those Members are planning to improve business efficiency, 48% plan to increase profit margins and 41% plan to employ more staff.

And whilst 75% of Members told us they are confident on the tools; only 42% of Members told us they were confident growing and developing the business and, likewise, only 39% were confident planning for the future.

The skills you need to plan for the future and grow and develop the business come with practice.

They probably aren’t taught as part of your apprenticeship, so if you’re not confident, don’t panic.

Working on the business takes time, so make time for it It will be a conscious decision you make. You need to carve out time in your calendar for annual planning, quarterly check-ins and regular times in between to think about the difficult problems facing your business. This can be time you spend alone, with your entire team or with a business coach.

An annual cycle for setting objectives works well for most businesses, when you decide where you’re going: • •

Are you setting the scene to open a new location in future?

Are you setting a target for the average star rating you receive on Google Reviews?

•

Are you adding electric vehicles to your service offering?

Whatever it is, set the course, determine your measure of success (“how will we know we are there?”) and write down your goals somewhere visible for regular reference.

No matter the task, if it is repetitive and common, you can bet there is a cost-effective software tool out there that can help you do it faster or from your phone.

Saving five minutes three times every day might not sound like much, but it allows you to think about, and do, something more valuable for your business.

Set aside one to two days for annual planning to give yourself enough time to do it right.

Delegate or outsource to save time

Quarterly goal setting is the next level down that gives your team a manageable horizon to focus on. A quarter, just 13 weeks, is long enough that you can achieve a lot but short enough that you don’t lose focus.

To help you make time for strategic thinking and planning that will help you achieve your goals, you should delegate tasks that don’t directly contribute to the services your customers pay for.

You can choose a quarterly goal to focus on that contributes to your long-term objectives, like asking customers to leave reviews so that your ranking in Google improves.

Two obvious examples of things to delegate are: •

Bookkeeping: you need to know this is being done right, but you don’t have to be the one doing it. Hire an experienced bookkeeper and free up time.

Marketing: understanding your marketing strategy is your job, but enacting it can be better done by someone else who is more savvy with the required tools and techniques.

Spend half a day each quarter planning the next goal and celebrating the wins of the previous period.

•

During the quarter, whether you do it monthly, fortnightly or weekly, you should form a rhythm where you take time out from the workshop floor to review your quarterly and annual goals and see how you’re tracking against them.

Don’t delegate the fundamentals

By coming back to them regularly, they will be top of mind and you will find a way to make them happen.

Are you manually writing down when customers need to come in to get their oil changed next? Get a low-cost or free customer relationship management tool (CRM) that can help you store and manage your customer interactions.

You mustn’t give away control of everything; it is your business: • Quality Control: the buck stops with you and you set the standard for the work that gets done for your customers. Always keep an eye on what work is being delivered, to avoid a poor experience for customers.

• Team Culture (including hiring): the people in your business are your business. They interact with your customers and you need to make sure they are aligned with where you need to go and have the right personalities and skill sets.

• Strategy and planning: never delegate this, even if you find it difficult or uncomfortable. Your business is led by you, so keep this one under your control.

Are you trudging through Microsoft Excel to produce an invoice or a purchase order? Subscribe to some low-cost accounting software and have your bookkeeper set up your templates and accounts. It will save you time and prevent mistakes.

Working on your business, not just in it, is crucial to the long-term success and growth of your business. It might be difficult to find the time to do it, but you’ll never regret it. It’s an investment as important as any new scan tool or employee.

But we know what you’re thinking. Finding time is a real struggle. You need to put a few things in place to free yourself up so you have planning and thinking time.

Use tools to help you automate tasks

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7 tips for running a financially efficient workshop

When Capricorn’s 2021 State of the Nation asked Members about the biggest challenges they face in business, 19% said they struggled with efficiency and 54% said they still measured efficiency by their capacity to pay their accounts at month-end.

So, we asked some of our team of automotive industry experts for their hacks for running an efficient business.

We particularly wanted advice to help Members run more financially efficient workshops, because 20% of Members told us financial concerns were among their biggest challenges.

Here’s what they said.

Start measuring your efficiency Workshop Whisperer Rachael Evans said when a workshop owner recognises they don’t have an efficient business, the number one thing they’re usually not doing is measuring efficiency.

“That’s where there’s this separation between blue-collar and white-collar thinking,” she said.

“There’s a distinct lack of recognition in the aftermarket of the fact that our workshops are essentially factories, and in those factories the product we’re producing is units of labour.

“If we were a Toyota factory or a Coca-Cola bottling plant, the metrics that would come out of that factory in a day would be how many units were manufactured, what time they were manufactured in, and what waste there was. But often workshop owners don’t know even if they have the ability to track that in their software.

“So, the way to start to turn that around is actually to pay attention to the things that you should be paying attention to. At any one time, I should be able to ask a business owner, what’s your shop’s proficiency today? What was it yesterday? What was it last month? And what are you tracking out for the quarter? They should be looking at those numbers so often that they don’t need to go and look at a report. They know where they’re at.”

Invest in a good management tool Good management tools aren’t just for tracking your efficiency; they’re the way to unlock that efficiency. Jeff Smit, Technical

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Editor at The Automotive Technician, urges Members to invest in good workshop management tools.

These tools should include: • Finance and invoicing • Rosters and time sheets • Work scheduling and technician management • Inventory management • A customer booking portal • A customer database and customer relationship management • Reporting and business intelligence.

Learn how to read financial statements

your

Financial statements and financial management tools can be confusing and difficult to understand. As a business owner, you need to overcome that challenge if you want to become more efficient.

Rachael recommends talking to your accountant and getting coached through how to read financial statements and reports. It’s a skill you’ll never regret learning.

Look at your financial statements regularly Further to the above, Rachael said it’s vital to look at your financial statements regularly (and not just at the end of the month or at tax time).

Looking at your statements helps you understand your cash flow, helps you plan, and allows you to identify problems and inefficiencies early.

Only take on debt for assets that make profits

Workshop equipment is an important asset which can help improve productivity in your workshop. Make sure to consider where you are investing and including those investment costs when setting your charges. As David Fraser notes, 'Members need to reinvest in diagnostic equipment every 16 months or so, so Members need to be considering the costs for this equipment when determining their charges.'

Efficient workshops do not accrue debts that don’t have an appreciable asset attached to them. You shouldn’t be putting your jet ski through the business!

Putting purchases through the business that aren’t going to contribute to your

business profits puts unnecessary stress on the business.

If you are looking for fast and easy finance to acquire equipment to contribute to your business profits, Capricorn Finance can help. Capricorn Finance offer convenient finance options for new equipment, with repayment terms up to 60 months on finance over $2,500. * Visit capricorn.coop/finance for more information.

Friction-free access technical information

to

We know from State of the Nation that a quarter of Members struggle to get the technical information and diagnostics they require — leaving technicians Googling for answers or calling dealerships for advice.

Not having easy access to the technical information your technicians need to do their jobs is a massive opportunity for inefficiency. It can waste a lot of time.

(And it’s completely unnecessary — Members can access Capricorn Service Data for FREE. It gives you instant access to a comprehensive range of online service information covering thousands of vehicles, including manufacturers’ service schedules, service illustrations,

repair times and an estimate calculator.)

Check your progress against clear goals and benchmarks

The most efficient workshop owners are clear about their goals for their business.

They know how much money they need to make and how many customers and products need to come in and out the door each day to reach that threshold.

It’s also important to have benchmark metrics for your gross profit, net profit, effective labour rate and daily car count, to measure your progress against.

You should be able to see, at a glance, how you’re tracking in any particular week, Rachael said. Going above or being below those benchmarks may have a detrimental impact on your efficiency.

To read more about the challenges and opportunities facing automotive workshop owners across Australia and New Zealand, download your free copy of State of the Nation. *Capricorn Finance offers business equipment finance through Capricorn Society Limited (ACN 008 347 313). Fees & charges, terms & conditions and lending criteria apply.

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Employing an apprentice: the information and incentives you need If you’re thinking about taking on an apprentice, congratulations!

Apprenticeships are the way most of us got our start in the industry. Taking on an apprentice of your own is an excellent way to share all your knowledge and experience, give back to the industry, and play a part in training the next generation of technicians. In fact, over 60% of Capricorn Members told our 2021 State of the Nation survey that training the next generation was the main reason they took on an apprentice.

But it’s a big commitment. It takes time, effort and dedication. The good news is you don’t have to do it alone — there’s a lot of support out there for mechanical workshop owners who employ apprentices.

In this article you’ll find links to the information you need to know in your home country or state, including information about the various incentives you can leverage to your advantage, to make taking on an apprentice even more worthwhile.

National resources for workshops taking on apprentices

Across Australia and New Zealand, governments are offering incentives to help get new talent into apprenticeships.

New Zealand

The New Zealand Government is currently offering business owners an incentive to take on apprentices, called Apprenticeship Boost, which subsidises wages for first- and second-year apprentices. It’s a response to the economic impacts of Covid-19 and is available until August 2022.

2 2 CAPRICORN IGNITION DECEMBER 2021 JANUARY 2022

Australia

The Australian Federal Government also offers a range of incentives to help businesses employ apprentices. A simplified and streamlined incentives program was due to be launched in mid-2021, but that was delayed by the pandemic and was expected to launch in October 2021. You can find information about the original (and now extended) incentive program and a range of other employer incentives at australianapprenticeships. gov.au.

State-by-state information for employers of apprentices

In Australia the various state governments also offer a range of support services for employers of apprentices. These include everything from helplines, to lists of available financial assistance, to all the regulatory information you need to know, to help actually finding an apprentice.

Taking advantage of the support and incentives on offer from your government should make it that little bit easier to employ a new team member.

To recognise, reward and retain the apprentices you already have, look out for Capricorn Rising Stars coming soon in February 2022.

Why not scan the QR code and begin your journey towards employing an apprentice?

You’ll find a lot of the information you need to employ an apprentice in your state by scanning the QR codes.

Why taking on an apprentice is a great opportunity

We know from State of the Nation that finding good staff is one of the big challenges Members face. There’s a real shortage of qualified technicians out there. The apprentices of today are the qualified technicians of tomorrow. They’re our industry’s pipeline of talent. Yes, training an apprentice takes time, money and effort, but it’s an investment not just in the future of your business but in the future of our industry, too.

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6 steps to get your workshop ready for EVs

If you’re operating a business in the automotive aftermarket, you’ll no doubt have one eye on the horizon and be aware that electric vehicles (EVs) are about to be the next big thing.

You’ll also understand that while EVs might look like an ordinary car from the outside, they’re a completely different machine under the bonnet—and that’s going to mean a lot of change for you, your business, your investment decisions, and your team.

A quarter of Capricorn Members told State of the Nation 2021 the switch to electric was a top five challenge for our industry, yet only 17% said their businesses would soon be ready to service EVs. So, what does it take to get your workshop ready for EVs? Here are 6 changes and investments you can start to make now.

Get your workshop electrics sorted

EVs operate at a very high voltage—up to 650 volts (DC). That’s well in excess of a level that might be considered a hazard to your technicians. Anything above 150 volts is dangerous; an incident at 650 volts is likely to be fatal.

Clearly, having the correct electrical infrastructure—including all the appropriate safety features—is going to be critical.

You’re also going to need charging systems and specialist plugs and sockets. It’ll be worth speaking to a specialist electrician about what you’ll need.

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Investing in training is critical

A lot of technicians are the kind of people who, if they’re not quite sure how to fix something, will have to tinker about for a little while until they’ve worked out what’s gone wrong and how to solve it. That’s not possible when you’re dealing with 650 volts.

Jason Trewin, Chief Operating Officer at i-CAR Training Academy, said workshops are likely to need technicians trained to several levels of expertise. European standards, for example, have three levels: • • •

EIP: an “electrically instructed person”, who has a basic awareness of the system and can deactivate and activate it HVT: a “high-voltage technician”, who can work on electrical components, wiring, and so on HVE: a “high-voltage expert”, who can work on the internals of the battery.

“Fortunately, there are various places, including RTOs (registered training organisations) where you can get that training, but it may well be that a branded OEM will say they require you to do a certain baseline level of training,” It’s not just in handling high-voltage batteries that training’s important. There’s plenty of training for other complex systems, like blind-spot detection, emergency braking systems and even ADAS (advanced driver assistance systems), that is going to be essential.

"You’re going to need things like a designated area, an isolation bay, for when a vehicle comes in"

Making space for EVs

It won’t be a surprise that EVs require a lot of specialist equipment (we’ll get to tools in a minute), but what you might not expect is just how much space that equipment is going to require.

EVs are 20% to 30% heavier than traditional cars, due mostly to the weight of the batteries. That means you’ll require special lifting equipment. You also need extra space clear around the vehicle for safety purposes and, crucially, immediate access to the outdoors in case it becomes necessary to remove the vehicle from the workshop for fire safety or due to the risk of explosion from stored electrical energy or gases.

Prepare to invest in the right tools

Unsurprisingly, there’s a raft of new tools and equipment that comes with the switch to servicing EVs. For example, you’ll need an insulation meter (a Megohmmeter) and resistance meter (a milliohmmeter) to help you diagnose faults. You’ll also need to replace a number of tools with insulated versions designed to protect the user from potential electrocution.

brands of EVs are simply going to be beyond the reach of many workshops. Hard choices may have to be made around which makes of EVs you want to specialise in.

Workshop practices and protocols must prioritise safety

The risk to technicians from EVs is far greater than from traditional cars. Trewin said safety had to be taken incredibly seriously.

“You’re going to need things like a designated area, an isolation bay, for when a vehicle comes in,” he said. “So, it comes into an area of the floor that’s colour coded and it’s got bollards around it, and signs hanging from the roof and on the windows, so everyone in the workshop knows what the car is. You just don’t go up and open the bonnet and go ‘what’s this?’ ” Creating a safe EV workshop means technicians must wear appropriate PPE, including 1000V-rated insulated gloves and insulated boots, and your workshop must have insulated matting on the floor and defibrillators installed.

Understand you may need to specialise

Currently, EV manufacturers tend to have their own ranges of tools and their own training. Tooling up, training, and paying for OEM diagnostics software subscriptions in order to service all CAPRICORN IGNITION DECEMBER 2021 JANUARY 2022 2 5

The big parts shake-up: How EVs will hit your profits

There’s a big shake-up coming our way, and you and your workshop need to be ready. That’s the key take-home message from a major report into the next decade of the global automotive aftermarket industry by the expert analysts at McKinsey and Company—and there are lots of opportunities for those preparing now.

Called Making Every Part Count, the report looks at disruptions in the automotive aftermarket for light vehicles—specifically the parts market—until 2030. It uses an analysis of the technological trends impacting 100 key vehicle components to forecast probable effects on workshop revenues. It incorporates some of the major shifts in the industry abroad, including digitisation, electrification, autonomous driving and shared mobility.

While the report used the US, European (UK, Germany, Italy and France) and Chinese markets to calculate its results, and did not include Australia and New Zealand, it does at least give us a clear indication of the trends we’re likely to see here, too.

It’s all about your bottom dollar Let’s start with some good news. McKinsey forecasts a 15% growth in the size of the car parc between now and 2030. That’s a slower pace than in the past decade but still a healthy pipeline for workshop owners.

What workshop owners may not be quite so prepared for is what McKinsey called “a very significant paradigm shift”—the increasing electrification of that car parc.

“Despite regional differences in the adoption of electric vehicles (EVs), globally the share of EVs is expected to rise from approximately 2% in 2019 to 17.8% in 2030,” the report says. That’s according to McKinsey’s base case (or least disruptive) scenario.

Anecdotally, there’s a reluctance among workshop owners and others in the automotive aftermarket in Australia and New Zealand 2 6 CAPRICORN IGNITION DECEMBER 2021 JANUARY 2022

to believe EVs will be a part of our future. State of the Nation 2021 found less than 20% of Members would be ready to service EVs any time soon.

But a separate report from the Automotive Aftermarket Suppliers Association (AASA), released in 2021, warned workshops and suppliers to expect “accelerated adoption” of EVs as soon as the total cost of ownership reached parity with traditional internal combustion engine vehicles (ICEs). The AASA expected that to happen “in about five years”, if not sooner “if ambitious battery cost targets are achieved by key OEMs”.

The other potential major accelerator of EV adoption could be government regulation. Although the Australian Government, in particular, isn’t leaping towards regulating against ICEs in favour of EVs, there’s no guarantee that won’t change in the future— especially as governments try to reach the carbon emissions targets agreed to as part of their climate change commitments.

How the experts see the disruption to come The switch to EVs brings with it a wide range of problems, not least of which is tooling up your workshop and training your workforce.

But beyond those obvious challenges, the McKinsey report points out that the market for conventional parts is set to transition to meet the demand for EV parts.

“Overall battery EVs (BEVs) have fewer moving parts, less wear and tear and, thus, significantly lower maintenance costs,” the report authors state.

“The reduced wear and tear of BEVs is also applicable to plug-in hybrids (PHEVs) and hybrids (HEVs), albeit to a lesser extent.

This is because these hybrids are more complex, due to having both an electric motor and a combustion engine, as well as a sophisticated transmission system.

“The aftermarket is expected to benefit from this trend and the complexity of hybrids. Besides, given the recent emergence of powertrain electrification, it will take several years until (fully electric) EVs enter the relevant age segment of the aftermarket.”

Ultimately, however, electrification is set to have a negative impact on the sale volumes of accessories, brakes, starter batteries, alternators, fluids and traditional ICE powertrain parts.

“However, other chassis components, electric powertrain parts, thermal parts and tyres will benefit from the volume effect and technical layout of (fully electric) EVs,” the report states.

Th e i m p e n d i n g i m p a c t autonomous driving

of

Electrification isn’t the only challenge McKinsey sees impacting parts and partsbased revenues for workshop owners.

The other great technological advance is advanced driving assistance systems (ADAS). The report predicts up to 60% of passenger vehicles sold in 2030 could be equipped with L3 ADAS and perhaps another 14% with L4—although the report authors admit this is “an aggressive scenario”.

“Autonomous driving will reduce the number and severity of collisions but increase product complexity and the cost of parts,” the report states. “More sensitive components are always needed to secure autonomous vehicles’ full functionality, leading to shorter maintenance intervals (such as frequent diagnostic checks).”

That could change the way your business looks and our industry operates, with more specialisation on the way as few workshops invest in specific training, equipment and software.

What does all this mean for your business come 2030?

Less wear and tear, fewer collisions to repair—are EVs a disaster for the aftermarket business model? Not necessarily, but the way we do business has to change.

McKinsey calculates the yearly aftermarket spend for each battery (fully electric) EV on

parts alone is 40% lower than it is on ICE vehicles, which means workshop owners are going to have to compensate their income levels with additional services.

“Various industry experts assume, however, that despite the large decrease in component spend, service hours for EVs will increase compared with ICE vehicles (due to the higher complexity),” the report states.

“ADAS components are less likely to be replaced (unless a collision happens) but they can be expected to require a significant number of service hours for maintenance and recalibration.

“In other words, from a consumer’s point of view, this analysis does not imply a 40% decrease in overall spend in the automotive aftermarket, but a shift from component spend toward service-hour spend.”

What should you be doing right now?

McKinsey warns the coming decade will be characterised “by change and uncertainty”, and current revenue pools and business models will shift significantly.

“Moreover, with the new players and intermediaries entering the automotive aftermarket, OEMs might be able to gain control of the entire lifetime of the vehicle and subsequently increase their share of the aftermarket,” the report states.

The good news for workshop owners is there’s still plenty of time to develop a strategy and prepare for the changes and challenges ahead. Here’s what McKinsey recommends:

Understand it’s not only a service; it’s also a relationship While the aftermarket has historically been seen as providing maintenance and repair, “the future of the aftermarket will require connecting with customers in addition to providing parts,” McKinsey says.

“In fact, due to the connectivity paradigm, the initial vehicle purchase becomes less important and the connection and offers made during the customer lifecycle and recurring revenues will be the true driver of value to aftermarket players’ profit pools.”

“keep their current business afloat while preparing for the future”.

Start preparing for transition now “Transformations do not happen overnight,” McKinsey says. “The stepwise adaptation across all organisational levels, and with the adequate industry perspective, is key to the long-term survival of traditional organisations.”

In other words, start planning for your transition now, but only make the move when the time is right—as you would with any other business decision.

Find your own pace for change And when will the time be right for transition? McKinsey argues that’s up to you and your position in the market. If you’re a market leader, you may choose to go early. If you’re not, then consider whether it’s better to hold back while the market leaders set the new standards, cope with incoming regulations and spend their capital developing the market.

So, what’s your strategy going to be?

McKinsey recommends workshops focus on capability building to identify vehicle components generating high growth and portfolio impact.

The report authors also recommend ensuring you've got the relationships you need in place to inform your decisionmaking and investments as you manage the big shake-up to come.

“The automotive aftermarket industry is at the precipice of a technology-driven disruption,” McKinsey says. “Even though change might not be immediately evident in the everyday operations of aftermarket players, the disruption is already apparent in new car sales and will ultimately be felt in the aftermarket.

“With this disruption certainly comes risk that needs to be managed, but the business opportunity is significant.

“We recommend companies start with thoughtful preparation now, in order to be able to fully capture the aftermarket’s future value.”

Keep getting the basics right New business models require significant investment, which should be financed through traditional profit streams.

McKinsey points out that the size of the car parc will remain relatively stable leading up to 2030 and workshop owners need to

CAPRICORN IGNITION DECEMBER 2021 JANUARY 2022 2 7

PREFERRED SUPPLIER PROFILES PRECISION AUTOMOTIVE EQUIPMENT QUEENSLAND precisionautomotive.com.au

4

YEARS PREFERRED SUPPLIER

Precision Automotive has been a workshop equipment leader for over 25 years.

Precision Automotive has been a workshop equipment leader for over 25 years. They design, supply, install and service the world’s leading brands including Rotary Lift, Hunter Engineering, Jaltest and Autel scan tools.

With their own fully trained service technicians they are able to provide Australia-wide service and support.

Contact Precision Automotive for your automotive workshop equipment, hoists, tyre balancers, tyre changers, wheel balancers, wheel aligners, brake lathes, compressors, presses, and diagnostic scan tools, as well as a full range of ancillary workshop tools.

GWS AUTOMOTIVE GROUP VIC/TAS gws.com.au

20+

YEARS PREFERRED SUPPLIER

Founded in 1930, GWS Automotive Group is a third-generation family-owned business.

They pride themselves on their excellent customer service standards and providing the most competitive prices.

GWS Automotive Group brands include Holden, HSV, Honda, Kia, Mitsubishi and Suzuki. GWS always ask for the VIN number to assist them to supply the right part, first time, every time.

Ring GWS to speak to their dedicated team of friendly and experienced parts interpreters.

2 8 CAPRICORN IGNITION DECEMBER 2021 JANUARY 2022

MEMBER PROFILES

Customer communication key to success for Maryborough Service Centre Daryn, Petrina and Dana Brims own six automotive businesses between Brisbane and Bundaberg in Queensland, including a Pedders outlet and the Repco-authorised Maryborough Service Centre. of the year in 2009 and 2012 and more recently has taken on three additional staff and invested in a range of new computer scan tools and other equipment. The workshop has seen 18% growth in the last 12 months.

The Maryborough team have been Capricorn Members since they opened the doors 12 years ago. Daryn said he enjoys the easy access to Preferred Suppliers through the Purple Pages and being able to view transactions via the Capricorn Portal. He also finds value in knowing he can contact his Area Manager whenever required.

The Maryborough workshop has been operating since 2009, servicing the needs of the local district, including maintenance and repairs on all makes and models of vehicles.

Daryn said his team of 14 employees prides themselves on delivering quality customer service at all times. “Quality customer interaction and communication is the most valuable service we offer,” he said. Perhaps that has been the secret to the workshop’s ongoing success?

Maryborough won Repco Authorised Service Dealer

“Being a Member of Capricorn means we are part of a community,” he said. “Having one statement is a huge timesaver, plus the benefit of the rewards points program is also a bonus.”

Daryn, Petrina and Dana use their rewards points on gift cards for employee Christmas presents.

As Capricorn Members, they have also attended gala dinners and trade shows on the Gold Coast, golf days and other regional events.

Their workshop is across the road from Maryborough’s giant Ned Kelly statue!

l l a g n i l l a C

! s e Rid

If you have a story or a ride that could be published in Ignition, email it to ignition@capricorn.coop.

Ensure you include Member Ride in the subject line!

CAPRICORN CLASSIFIEDS Classifieds Advertising Guidelines • The Capricorn Classifieds are for Capricorn Members only to advertise. Payment is to be organised between advertiser and purchaser.

• Parts or equipment that relate to your business only may be advertised.

• Businesses for sale may be advertised.

• Cars for sale cannot be advertised.

• Classifieds are on a first come, first served basis.

Sunshine Coast 4WD Centre is a leading 4WD specialist on the Sunshine Coast.

Four hoists, six staff, and a huge customer base. Contact 0754433601 and talk to Sharon or Tim. Living & Working in Paradise $275,000 WIWO Mechanical Workshop,Tyres and Auto Spares Shop.Established 2006. Prime location situated on the main road into Mission Beach. Large plant and equipment inventory with approximatley $160,000 worth of stock and parts. Freehold also available. Enquiries 07)40687288 or casstyres@bigpond.com Mechanical Workshop, Port Macquarie Great opportunity to take successful business to the next level. One of town’s longest serving and best located workshops – four hoists, extremely well equipped, call Maca for more info. 0414 850 365.

• Depending on the number received, your classified may not appear immediately.

• No positions vacant.

• No pictures to be submitted.

• By submitting the Online Capricorn Classifieds Ad Form, you acknowledge that the price of any goods or services shown is inclusive of GST.

Auto Electrical Business For Sale Armidale Northern NSW Long lease or option to purchase strata premises. Currently two auto electricians very busy. Massive potential. $120k + stock.

Owner retiring but available for handover.

Phone Richard 0427 751 703 Auto Air Conditioning and Auto Electrical business in Central Bendigo area.

Established 30+years. High turnover, long lease available. Plant and Equipment. Owners retiring. Phone Dianne 0438020857 Jaguar/Landrover Wrecking Business for sale, in Outer Eastern Melbourne.

Established for 40 years. New and Used parts.

All equipment inc Hoists, Forklift, Ford Ute, Shelving/Racking, Tools, Office Computers. $75,000 plus stock Ph: 0427270542

Mechanical Workshop, Melbourne VIC Est. in 1962 with current owner for 12yrs, located in Bayside, mechanical service & sales, very prominent loc. Owner retiring. Ph: 0411 460 460

Mechanical Workshop, Woodford Qld Fully equip family business servicing the community since 1995. Well established customer base, large 4 bay shed (long lease available) 3 hoists, office, amenities and wash bay. Enquiries 0408767366 or dawnevandriver@hotmail.com

Mechanical & Tyre Service. 79 Woods Street DONALD VIC 3480 Established business of 29+ years. Prominent position in centre of town, covering large rural area. Plenty of area for growth. WIWO. Building not included.

Building Leased Owner Retiring. $145,000 plus stock Phone 03 54971 202

Auto Electrical business in Northern Victoria. Well established business with large customer base. Includes service vehicle, tools, air conditioning equipment. Freehold available. $190,000 plus SAV. Contact Lee 03 5452 1813.

Mechanical Workshop For Sale, Texas QLD Established family owned business since 1976, 3 bay fully equipped workshop, 3 brand new hoists, Freehold BP Service Station, RACQ Approved Repairer, Loyal customer base, Walk in Walk Out. Mechanical, Radiator Repair and Parts Supply Business For Sale Gold Coast. Long established, RACQ Approved, Strong Client Base, High Turnover with great potential to expand. Currently managed, also fantastic opportunity for owner operator. Call Alex 0459 424 777 Automotive Workshop Eastern Suburbs Melbourne. Established business of 35+ years.

Mechanical servicing and repairs. Prominent location close to major shopping centre. 4 Hoists & equipment Expression of interest Call Russell 0417339617 Fully Equipped Mechanical Workshop For Sale Established 30+ years. Specialising in Italian cars. Thomastown location. Strong customer base. Long lease available. Phone Sandra 0417392998 Business for sale Clermont Motors Central QLD. Includes commercial and 4wd parts, truck & trailer parts, tyres, windscreens, batteries. Growth potential within the region.

1400m purpose built workshop, includes pits, hoists, 3 offices, warehouse, retail display area.

Email: reception@clermontmotors.com.au

Publisher's General Disclaimer All information, material and content contained in this edition of Ignition is provided or sourced by Capricorn Society Limited (“Capricorn”) for general information only and is not intended to be advice or comment on any particular matter or subject.

Before acting on any information you should consider the relevance of it to your own circumstances and, if necessary, take professional advice.

Capricorn makes no representation or warranty as to the accuracy, completeness or reliability of any material (including, without limitation, any third party supplier advertisement in respect of which Capricorn merely acts as a conduit) included in this edition of Ignition. To the fullest extent permitted by law Capricorn, its officers, employees, agents and representatives disclaim any and all liability to you or any other person for any loss or damage whatsoever connected with: (i) reliance on material in Ignition; or (ii) inaccuracy, error or omission in material in Ignition.

Capricorn, Stronger With Capricorn, Ignition, Capricorn Travel, Capricorn Mutual and the boomerangs device are trademarks or registered trademarks of Capricorn.

If you have any news or information that you think would be of interest to your fellow members, please send the information to Capricorn via email ignition@capricorn.coop.

3 0 CAPRICORN IGNITION DECEMBER 2021 JANUARY 2022

Capricorn Society Limited ACN 008 347 313 Postal Address: Locked Bag 3003, West Perth WA 6872 Registered Office Australia: 28 Troode Street, West Perth WA 6005 Phone (08) 6250 9500 General Enquiries 1800 999 233 Members 1800 327 437 Suppliers 1800 005 322

N R O C I R P A C

LAST MONTH'S ANSWERS LAST MONTH'S WINNERS 1st Prize - 4,000 points AZNU Automotive 2nd Prize - 2,000 points Dores Bros Garage

Email your answers to ignition@capricorn.coop before the 25th of December. Winners will be selected by a lucky hat draw of correct entries. Please ensure you include your Member number and email address when submitting your entry.

WORD

Find the 15 words hidden in the jumble. They could be horizontal, vertical, diagonal or backwards. See if you can find them all!

DISRUPTION

DOLLAR

BENCHMARK

AFTERMARKET

INCENTIVES

GENERATION

OUTSOURCE

LESSON

EVENT

MAINTENANCE

CUSTOMER

TRADESHOW

CHRISTMAS

PROTOCOLS

MANUFACTURING

Congratulations to the following winners of our Capricorn 2021 Fuel Card Promotion. Masons Prestige has won “Free Fuel for a Year” which will be delivered as $3,500 in AmpolCash vouchers.

Bunbury Automotive Spraypainters has won 100,000 Capricorn Rewards points (valued at $1,000). Thanks to all Members who participated in the promotion. Of course Members win all year round whenever they use their Capricorn Fuel Cards to consolidate more business expenses and earn more reward points.

CAPRICORN IGNITION DECEMBER 2021 JANUARY 2022 3 1

ATTN: CAPRICORN FUEL CARD HOLDERS

DOWNLOAD THE WEX MOTORPASS DRIVERS APP TO GET A BETTER DEAL ON FUEL PURCHASES WITH:

Live fuel price updates to always get the best deal

Easily find stations enroute

See Capricorn Member offers

DOWNLOAD THE APP

SIMPLY DOWNLOAD THE APP AND ENTER YOUR CAPRICORN FUEL CARD NUMBER TO REGISTER AS A CAPRICORN MEMBER AND GET STARTED. Applications and use of the Capricorn WEX Motorpass Fuel Card are subject to the AU – Capricorn WEX Motorpass terms and conditions which can be found at www. capricorn.coop/terms-conditions. The WEX Motorpass app is offered by WEX Australia and is subject to separate terms and conditions and Wex’s privacy policy.