caanf meeting 3 presentation 23 08-2011

Automotive Accountants

Network Forum

Meeting 3

The Manningham

23rd August 2011

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This presentation has been prepared by Colledges for the general

information of its clients and forum attendees. While the

information herein has been prepared with all reasonable care and

derived from sources believed to be accurate, no responsibility or

liability is accepted by Colledges or any of its affiliations, for any

errors or omissions, including liability to any person of negligence or

otherwise.

Recommendations may not be appropriate in all circumstances and

clients must consider their own personal objectives and financial

advice before acting on recommendations in this presentation.

Colledges (ABN 52 439 950 641)

For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.auwww.colledges.com.au

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Feel free to ask questions

Show respect for presenters and colleagues

One discussion at a time

Please switch phones to “silent”

Enjoy the forum!

For more information, contact Angelo Sirianni on 03 9851 6500 or email angelosirianni@colledges.com.auwww.colledges.com.au

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House Rules

Quote for the day...

“The only thing to do with good

advice is pass it on.

It is never any use to oneself.”

Oscar Wilde (1854 – 1900)

Irish dramatist, novelist, & poet

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Agenda

Whiteboard Items

- Review Time & Attendance

Economic Update

Vertical Integration

Fixed Price Servicing

Personal Property Securities Register (PPSR)

Paid Parental Leave

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Whiteboard Items

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Whiteboard Items

1. Processing of deals.

- Is there an easier, quicker way of

doing it effectively?

2. What incentives are there for Service staff in

regard to generating extra revenue for the

dealership?

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Whiteboard Items

3. Pentana V8 Release loaded free of charge?

4. AADA Conference Feedback

5. Yearly Luxury Car Tax declarations

- Quoting ABN

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Luxury Car Tax – Quoting ABN

Quote ABN to defer Luxury Car Tax for:

- Trading Stock

- Research and development

- Export

Registered for GST

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Luxury Car Tax – Quoting ABN

When to quote

- At or before the vehicle is purchased

How to quote

- Approved format

- The quote to be:

* on the order for the vehicle

* any other document to the supplier

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Luxury Car Tax – Quoting ABN

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Luxury Car Tax – Quoting ABN

Quote to cover several purchases

- Purchase several vehicles over a period of time

- Provide the supplier a single quote to cover the

period

- Must be 12 months or less

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Luxury Car Tax – Quoting ABN

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Luxury Car Tax – Quoting ABN

Non Quotable purchases

- If a vehicle is purchased for non-quotable

purposes

- Must advise the supplier that the vehicle is to

be used for non-quotable purposes

- Must use the following format:

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Luxury Car Tax – Quoting ABN

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Review

Payroll Time and Attendance

- Providers

- Pros/Cons

Economic Update

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Economic Update

Where are we headed?

Who would really know?

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Economic Update

Interest rates 4.75% (RBA)

ANZ Westpac

Share market world melt down

Aussie market $40B wiped off

21,000 jobs in manufacturing going

Forecast to 100,000 March 2012

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Economic Update

Inflation 2.8%

GDP growth 2.7

Taste for champagne – Bollinger in Australia up 25%

last year

Unemployment up from 4.9% to 5.1%

Housing market clearance rates below 60%

Aussie dollar $103.91 to USD

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Economic Update

The good news:

- The new car market forecasts to 1M in 2011

(currently rate $989,000)

- Season of cheap stocks arrive – Housing – stock

market

- The Costello Future Fund may be our saviour

- Australian economy dominated by the service

sector – 68% of GDP

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Economic Update

The good news:

- China the way of the future – then India

- Both countries are investing heavily into Australia

- Growth for China 9.5% year to year – now 9.4%

- Chinese target 7% over next 5 years

- India growth 7.4%

- Aussie growth long term 3.1%

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Economic Update

The Automotive Industry

- New car buyers taken for a ride – no real price

changes since 2008

- Aussie dollar gained: 50% on Greenback

40% on Euro

30% on Yen

- Industry comment:

• reasons for not dropping prices

• factories still recovering from the GFC

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Economic Update

The Automotive Industry

- China, the way of the future:

•Car domestic market over 15M (2010)

•USA 12M

• Australia 1M

Vertical Integration

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Vertical Integration

The Chinese business plan:

OWN EVERYTHING

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Own, or plan to own:

- The dirt

- The mine

- The iron ore

- The train/train infrastructure

- The wharf

- The ships

- The smelter

- The product

- The distribution

- The end product

Vertical Integration

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A former Automotive CEO’s vision:

- Design

- Produce

- Distribute

- Finance

- Service the vehicle

- Own customer for life

- Panel Shops

West Farmers – Now selling insurance

Vertical Integration

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This vision also included:

- Aftermarket parts

- Tyres – batteries – fuel

- Insurance - computers - phones

- House insurance

- Home finance

Vertical Integration

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What does this mean for you?

- Franchised dealers service only 25% of the CarParc

- 75% to the independents

- Why not establish independent service centre in

the PMA – non genuine parts

- Why not expand with tyres, batteries, mobile

servicing and fuel cards?

- Why not expand into general insurance, computer

and/or phone franchises, incorporated on the

showroom floor or online?

Vertical Integration

Fixed Price Servicing

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Fixed Price Servicing

Other Franchises

- Toyota

- Mitsubishi

- Ford

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Fixed Price Servicing

Typical Features

- Fixed price: by model and by interval, log book only

- Customer pays “fixed amount” at service

- 3 year limit

- Transferable across dealers in the network

- Universal labour rate

- Funded by dealer margin

- Pooled funds: refunded to dealer at end of program

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Fixed Price Servicing

The Pro of Fixed Price Servicing

- Service Retention

- Increased intention to re-buy

- Loyalty to dealer and brand

- Whole of life costing

- Retail growth – service and new cars

- Service Value for money proposition

- Customer Service Index

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Fixed Price Servicing

The Cons of Fixed Price Servicing

- Fixed Price – universal labour rate

- Limited opportunities for up-sell

- Misunderstanding between service and repair

- Dealer Margin

- Transferable Customer

Afternoon Tea

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Personal Property

Securities Register

(PPSR)

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The following information does not constitute legal advice. You should seek legal or other professional advice

to consider the application of the Personal Property Securities Act to your individual circumstances

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PPSR

National reform bringing various Commonwealth,

State and Territory Acts under one system

Introduces a single act

Personal Property Securities Act

Single National Online Register

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PPSR

What are Personal Property Securities?

- Any form of property other than land, buildings and

fixtures

- Includes:

* Motor vehicles and machinery

* Crops and livestock

* Intangibles such as intellectual property

and contract rights

* Company charges

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PPSR

A Personal Property Security is when a secured

party takes an interest in personal property as

security for a loan or other obligation

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PPSR

Personal Property Securities Register

- Allows lenders and business to register their

security interest

- Secured parties can search the Personal

Properties Register to find out if security is

registered over personal property

- Planned date for Personal Property Securities

Register is 31st October 2011. (Attorney General is

expected to make an application in late September

2011, to set the actual date of commencement)

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PPSR

Personal Property Securities Register

- Existing security registers will close

- Currently registered interests will generally be

migrated to the national Personal Property

Securities Register

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PPSR

Personal Property Securities Register

- Below is list of (motor vehicle) registers to be

migrated:

* Register of Encumbered Vehicles (NSW)

* Register of Encumbered Vehicles (QLD)

* Register of Encumbered Vehicles (WA)

* Register of Encumbered Vehicles (ACT)

* Vehicles Securities Register (VIC)

* Vehicles Securities Register (SA)

* Register of Vehicles Security Interests (TAS)

* Register of Interests in Motor Vehicles and Other Goods (NT)

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PPSR

Key Concepts

- Personal Property is all forms of property other than

real estate

- A security interest is an interest in personal

property, secured payment of a debt or other

obligation

- Includes mortgages over vehicles or charges in

company property

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PPSR

Key Concepts

- Covers forms of transactions currently not

considered as a form of security. These include:

* Retention of Title Clauses in sale

agreements

* Financing leases where personal property is

leased for payment

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PPSR

Terminology

- Personal Property Security Act introduces new terminology:

* Secured Party

TERM EQUIVALENT

Secured Party Financier, mortgagee, chargee, lender, retention of title

supplier, lessor etc

Grantor Borrower, mortgagor, chargor

Collateral Secured property

Security Agreement Financing agreement, mortgage, charge etc

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PPSR

Attachment and Creation of Enforceable Rights

- Security interest must have “attached” to collateral in

order for security interest to be enforceable by the grantor

Perfection

- Perfection is a technical term particular to the Personal

Property Act

- Perfection is a form of protection for a secured party that

is stronger than the mere attachment of their security

interest

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PPSR

Default Priority Rules

- Registration on the Personal Property Securities

Register is a form of perfection

- Perfection by registration has two main benefits:

1. Defines the priority status of security interest

relative to other security interests

2. Ensures security interest survives bankruptcy or

insolvency

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PPSR

Default Priority Rules

- The effects of registration on priority security interests:

* Perfected security interest takes priority over an

unperfected security interest

* Priority between two or more perfected interests is

deemed in favour of the earlier interest

* Priority between two or more unperfected interests is

determined in favour of an earlier interest

- The rules apply on a default basis

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PPSR

Making a Registration

- On a approval form

- Personal Property Securities Register registrar

issues a verification statement to the secured party

Searching Personal Property Securities Register

- Can search a company or individuals

- Privacy issues need to be complied with

- Search certificate issued with details if parties, and

class of collateral

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PPSR

Fees

- Costs recovery basis

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PPSR

Issues for Dealers

- Retention of Title Changes required to be registered

to be effective

- Dealers should check their Retention of Title clauses

- Be prepared to register their security interest to be

protected

- Searching the Personal Property Securities Register

with a VIN will also provide stolen and write-offs

from NEVDIS

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PPSR

Issues for Dealers

- Dealers should search to ensure the vehicle is

free of interest:

* When purchasing

* When selling

- If sold, and there was an interest, the proceeds

become the property of the interest holder

Source: Dealer Solutions fact sheet

For more information on Personal Property Securities Act and Personal Property

Securities Register, please go to www.ppsr.gov.au

Paid Parental Leave

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Paid Parental Leave

What is it?

New entitlement for eligible working parents of

children adopted or born from 1st January 2011

(Parental Leave Act 2010)

Government funded 18 weeks paid leave, at

federal minimum wage

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Paid Parental Leave

Who is eligible?

Employees who have been with employers 12 months

or more

Primary carer of the child

Australian Residents

Employees who meet the work test requirements

Employees with an adjusted income of $150,000 or

less

Employees on leave or not working from time of

primary carer role till end of Paid Parental Leave

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Paid Parental Leave

Paid Parental Leave Work Test

Determined by the Family Assistance Office

Employers are notified by Centrelink of their obligation

to pay Parental Leave Pay

Employees must have worked:

* at least 10 out of 13 months prior to birth/adoption

* at least 330 hours in that 10 month period, with no

more than an 8 week gap between two consecutive

working days

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Paid Parental Leave

Employer’s responsibilities

Register with Centrelink Business Online

Services

Provide Parental Leave Pay to eligible

employees of children born or adopted from

1st July 2011

http://www.centrelink.gov.au/internet/internet.nsf/filestores/fpr081_1107/$file/fpr081_1107en.pdf

Questions

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Next Meeting

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Tuesday 25th October 2011

12 ~ 4:30pm

The Manningham

End of Year Meeting

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Preferred date/venue

End of Year Meeting

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Surveys Please

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Thank-you