AROUND THE REGION
Bringing power to the people By Keith Platt WHILE Australia’s two-speed economy is becoming one of the most overused phrases, brothers Brett and Stuart Davies are running a $250 million turnover company that is staking part of its future profits on the stop-start principle. But rather than lurching from one financial imperative to another, their focus on “stop-start” is all about vehicle engines: ones that turn themselves off at red lights and become active again when the lights go green. The Davies brothers head the Club Assist Corporation, a global company that is 80 per cent owned by Australian motoring clubs, principally the RACV in Victoria and the NRMA in New South Wales. Brett Davies is chairman and group chief executive; Stuart is chief executive officer and executive president. Their rise to prominence in the motoring world comes from what now seems a very simple idea – offering to help members of motoring clubs fix the most common fault that brings cars to a standstill – flat batteries. While car clubs had mobile mechanics (or agents) to send to emergency breakdowns, callouts to merely restart a car or fit and supply a battery were costly and time-consuming. An 18-month study of emergency callouts identified for the Davies brothers a niche where they could step in and help out. Already running a family-owned battery sales company, they were ideally situated to fill the obvious gap in services offered to members by the
RACV. This was in 1992. Club Assist now boasts being “the largest mobile battery service product and service provider in the world today”. In the past year the company sold more than 1.2 million batteries. The advent of all-electric cars holds little fear for Brett Davies, who says Club Assist believes EVs (electric vehicles) and stop-start technology can only increase the company’s customer base. Studies show internal combustion engines powered by petrol, diesel or gas operate up to 12.5 per cent more efficiently if they are not left to idle at traffic lights. However, turning them off and then turning them on, without any loss of momentum, requires a new electrical system with two batteries, not one. So there will be more batteries breaking down and going flat – and Club Assist will be there to help. This is the theory propelling the company’s thrust into the ever-changing world of motorised transport. “We think start-stop technology will slow the transition to EVs,” Brett Davies says, sitting in the boardroom of the company’s headquarters in Dandenong. “Start-stop is here already, but you don’t know when you see them on the road.” Davies says the start-stop technology is “flying under the radar, it’s been here eight years”. BMW, Kia and Mazda are already selling cars equipped with the fuel-saving systems. Club Assist also has provided for broken down electric vehicles with a
lithium-based emergency charging unit that will provide enough power for five or six kilometres. The compnay’s product and technical development vice-president Al Bradshaw believes 60 per cent of new cars will be stop-start by 2015. “The do-it-yourself battery charger will become a thing of the past,” Bradshaw says, while explaining the three different battery technologies needed to power the change. He says lithium batteries, suited to electric vehicles because of their lightness, are 10 times more expensive than heavy lead acid batteries. Davies believes United States authorities will next year recognise the fuel efficiencies of stop-start technology, leading the way for it to be adopted in fleet vehicles that have governmentregulated fuel efficiency targets. With no end in sight for batteries – which have a life of about 42 months – and by gearing up services for electric cars, Club Assist’s future seems assured. The gradual sale of a large chunk of the company to car clubs was always something the Davies family planned “but it has happened probably quicker than we anticipated”, says Brett Davies. One of four brothers who all went to Frankston High School, the Davies family links to car batteries go back to when his late father, Ian, owned Dandenong Batteries. Club Assist was launched by the brothers in 1991 after they spent 18 months assessing breakdowns reported by RACV members. The statistics
showed that 40 per cent of breakdowns were battery-related and 16 per cent of all breakdowns needed a new battery. “We approached the RACV and proposed offering a fully integrated service to its members. We were effectively sub-contracting to them,” Brett Davies says. “They couldn’t offer the solution on the roadside that we could.” A third brother, Scott, became part of the business in 1996, but has since been bought out by Brett and Stuart. The family remains close, with Brett and Stuart living in Mt Eliza, Scott at Red Hill and Russell about to return to Victoria. Control of Club Assist has effectively passed to motoring clubs through the Davies brothers “selling down” in three tranches, although they hold the most senior positions on the board of directors (Brett) and in the senior management team (Stuart). Sixty per cent of Club Assist is owned jointly by the RACV and NRMA, with four other clubs holding 20 per cent and the two Davies brothers 20 per cent. There are 600 employees and 3000 contractors involved in roadside service, which has been extended to include windscreens, alternators and starter motors. Its services are provided to motoring clubs in New Zealand, Europe, the United States and Canada. Brett Davies says no other roadside car repairers can respond as quickly or effectively. “There’s no direct competitor to what we do,” he says.
Batteries are all made overseas, mainly in South Korea, with some coming from China and the US. While running Dandenong Batteries the Davies family also owned the Australian Battery Company with a manufacturing plant in Western Australia, but this was eventually sold to Fiji. A decision to adopt a “cradle to the grave” approach to their products led them to set a target of recycling one battery for every one sold. “Ninety-six per cent of a battery can be recycled,” Brett Davies says, “including the lead, polypropylene casing and, to some extent, the acid. “The world is reliant on this ‘aboveground mining’ and for us it is another income stream. “We made recycling part of our first proposal to the motoring clubs. We saw the environment would be important to them and their members.” Club Assist has this year made big inroads in France, which had no motoring clubs of its own. Motorists from other countries stranded in the Gallic countryside had limited roadside assistance, but 50 per cent of vehicles were unable to be made mobile because they belonged to motoring clubs in other countries. “We went on a rescue mission to get their members moving and we’ve now got 60 vehicles on the road in France and the number of club members being made mobile again in their own vehicles has jumped from 50 to 80 per cent.” Reprinted courtesy BusinessTimes www.businesstimes.net.au
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www.mpnews.com.au Highly charged: Brothers Stuart, left, and Brett Davies at their Dandenong headquarters.
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Chelsea – Mordialloc News 14 November 2012