New dealer president wants franchise fix

THE incoming president of Australia’s motor dealer peak organisation wants to improve dealers’ security of tenure in franchise contracts.

Michael Tynan, who was elected president of the Australian Automotive Dealers Association (AADA) last month, also plans to work on lifting the public image of dealerships and defining the role of independent garages.

Mr Tynan, managing director of Sydney’s Tynan Motor Group, director of Mahindra Automotive Australia and president of the NSW Honda Dealer Council, said a key issue he wished to address in his new role was dealers’ franchise agreements, as some manufacturers were extremely demanding.

“It’s very expensive to set up as a franchise with their demands, and the biggest complaint for dealers is if they make the wrong decisions – if the product is wrong, the pricing is wrong – the dealers have no come-back,” he said.

“I’m not suggesting that dealers should have come-back. What we’re saying is we want to be recognised as [taking a financial risk]. We just can’t be there to flog their motor cars.”

Mr Tynan, who will preside over his first AADA national dealer convention at Melbourne’s Grand Hyatt Hotel on August 6-9, said dealers were concerned because many franchise contracts were for short periods, meaning they potentially could not recoup their investment in a brand.

“I think the big thing that worries dealers is that they’ve only got a one-year contract – some are three – but with no right to renewal,” he said.

“So consequently you go into this enormous capital expenditure and then you could lose the franchise at the whim of some person who really in fact has no personal money in the industry.

“It’s big money today – you don’t get much for two or three million [dollars, to establish a dealership franchise].”Mr Tynan said wholesale changes were not necessary – but consistency in franchise agreements was.

“The majority of franchisors are very good people,” he said.

“They work very well with the dealers. Then we’ve got a few that are probably not as dealer-conscious as we’d like them to be.

“Hopefully we can work with FCAI and build mutual respect, acknowledgement that they’ve sometimes got different agendas to what dealers have got."Independent service centres are also on Mr Tynan’s agenda, and while he says independent workshops have a place, he does not believe they can offer the level of service of an authorised franchise, as they simply don’t have the required investment in tools.

“No one seems to realise that when a new model comes out, it’s about a $100,000 investment, to make sure we’ve got all the right computer gear, all the training and so on,” he said.

“It’s impossible with the modern motorcar to just take it in and get it serviced – unless we’ve got all the gear.

“Do we want to go to war with the independents? No, they’ve got their place in the market – we don’t object to that – but I don’t think it’s fair them saying they can do log book services as long as they provide acceptable spare parts, and that retains the warranty.”Mr Tynan said he hopes to help improve dealer’s image in the community.

“[We need to] work on how we can build our profile as responsible people in the community, as employers,” he said.

Mr Tynan gives servicing as an example of where he believes dealers could improve.

“How can we improve our servicing, how can we improve our image, how can we present ourselves better to the public, where they feel like they’re getting a fair go in our service divisions?” he said.

Mr Tynan said that dissemination of dealer servicing costs surveys would show the public that dealer service charges were reasonable.

“I think we need to get surveys out to show we’re not a bunch of shonks.”www.aadaconvention.com.au