Ignition Magazine New Zeeland | December 2022

HOW THE CAR PARC IS CHANGING

Capricorn Preferred Supplier, Parts Connection, continues to give back to Members with their generous monthly prize pool worth $20,000.

Members who purchased from any Parts Connection supplier received a lucky gold nugget card which puts them in the running.

The list of lucky recent winners and prizes includes:

• Alisha's Automotive - $1,000

• Beatties Collision Repair Centre - $1,000

• BP Workshop Cromwell - $1,000

• Brian Sokolich Panelbeaters - $1,000

• Epsom Automotive - $1,000

• Midas Northwood - $1,000

• One Stop Mechanical - $1,000

A big thank you to all Members who participated in the campaign!

Are you setting your labour rates effectively?

According to our State of the Nation 2022 survey, 54% of Capricorn Members set their labour rates by comparing themselves against similar businesses, while 50% “use their best judgement”.

A business’s charge-out rate for labour has a huge impact on its performance and profitability, so guesswork and comparisons could mean that you’re potentially leaving money on the table.

Want to learn more about setting labour rates and margins on parts?

Use this QR code to visit the State of the Nation web page & DOWNLOAD THE FULL REPORT.

David Fraser Group CEO

CEO’s message

As we say goodbye to 2022, I can’t help but feel that, as an industry, we’re on the precipice of something special. Looking back on the past 12 months, flicking through the pages of the copies of Ignition we’ve published during the year, a theme emerges. It’s not quite the dawning of a new era, but it does feel like our industry is in a period of transition between one era and the next.

The expected transition to electric vehicles is the obvious starting point, and we’ve talked about that a lot this year. In Australia, the new Federal Government looks to be getting more serious about moving this transition forward, while in New Zealand the government has been introducing initiatives to encourage EV adoption for some time. The ball is rolling on the singlebiggest revolution our industry has seen since we switched from horse and cart to internal combustion engines. We see from State of the Nation that Members are now servicing an average of four EVs or hybrids a month. It was 2.5 last year. Yet only 18% of Members say their workshops are already, or will soon be ready, to service EVs and hybrids. That suggests the starting pistol has been fired but many of us haven’t even started warming up for the race.

There are other transitions under way, too. The face of our industry is changing. Millennials (the eldest of whom are now 40) are taking over more and more of our businesses as the older generations retire. They’re not just younger, they’re champing at the bit to do things their own way, to embrace change and technology.

The ongoing skills shortage means we’re looking again at who we welcome into the industry. We’re doing more to encourage more women into the automotive trades. The fact that three of our five Rising Star finalists this year, and our winner, were women, is a very public demonstration of this — though we’ve still got a long way to go.

What we do next matters. The decisions we make for our businesses, our investments in technology and training, the people we welcome into the industry — our next generation of technicians — it all matters. We all need to have one eye on the future, to be prepared for what’s coming down the track. The good news for Members is that you don’t have to do that alone. Capricorn is a dynamic, evolving cooperative. Our purpose is to help you build a more successful business. So, we’ll be there right alongside you — not just in the new year, but long into the future as we tackle the transitions ahead. It remains the case that we’re stronger together.

From all of the team here at Capricorn, have a wonderful holiday season and a very happy New Year.

Yours

in cooperation, David Fraser Group CEO

All information, material and content 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 in this edition of Ignition you should consider the relevance of it to your own circumstances and, if necessary, take professional advice. Any opinions expressed in an Ignition article are those of the relevant individual author and do not necessarily reflect the opinions or views of Capricorn. Capricorn makes no representation or warranty as to the accuracy, completeness or reliability of any material (including without limitation, any third party authored article or supplier advertisement in respect of which Capricorn merely acts as 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 any material in Ignition; or ii. any inaccuracy, error or omission in any material in Ignition.

Capricorn Society Annual General Meeting

The 2022 Capricorn Society annual general meeting (AGM) was held on Wednesday 19 October 2022, and we are pleased to share the main outcomes.

Director Elections results

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.

Capricorn Members in both the West Australian (WA) and Queensland (QLD) zones were invited to vote for a new Member director to represent their zone on the Capricorn board.

Capricorn is proud to announce the next Member directors:

In WA, Nigel Oborne is the new Member-elected director replacing Julie Wadley, who has now retired.

In QLD, Mark Rowe is the new Member-elected director replacing David Kemp, who has also retired.

On behalf of the team at Capricorn, we welcome both of our new Member directors to their new roles and look forward to working with them.

We also take this opportunity to thank Julie Wadley and David Kemp. Both retired after eight years of dedicated service as the West Australian and Queensland Member-elected directors. Both elected in 2014, Julie and David have been passionate and dedicated members of the Capricorn Society board. Their love for the automotive industry, for Capricorn and its Members, has always been evident. On behalf of the board, thank you Julie and thank you David, all the very best to you and your families.

Speaking at the recent WA Gala Dinner and Tradeshow, Julie Wadley told Ignition "I have been involved in the automotive industry for over 49 years and I must say being a WA director has been the icing on the cake, and I am very thankful for such an amazing opportunity to be part of Capricorn history. I also wish all the best to the new WA director Nigel Oborne.”

To learn more about our directors visit capricorn.coop/about/our-directors

Capricorn Annual General Meeting

At the 2022 Capricorn AGM Members approved the selective share buy-back resolution meaning that Members can continue to sell their shares back to Capricorn.*

At the meeting, Members also: ratified the renewed appointment of Mario Pirone as an independent director for a term commencing 1 July 2022 and ending 30 June 2026;

passed a special resolution approving amendments to Capricorn’s existing constitution to allow Member directors to act for three full terms. This amendment will allow Capricorn to utilise the experience and corporate knowledge of directors who have served two terms, but who would currently be precluded from serving a third.

* Shares are issued by Capricorn Society Limited (ACN 008 347 313). No offer of shares is made in this publication. An offer of shares will only be made in, or accompanied by, Capricorn’s Prospectus and any supplementary prospectus which is available on request or may be viewed at capricorn.coop under “Corporate Documents.” Before making any decision to apply for shares you should consider the Prospectus and any supplementary prospectus. Any application for shares must be made on the application form in or accompanying the Prospectus.

Nigel Oborne

Mark Rowe

How the car parc is changing

If someone offered you a crystal ball so you could see what the future holds for your business, would you take it? Most business owners probably would. The ability to see what’s coming down the track gives us an opportunity to plan, to be ready, for whatever lies ahead.

Fortunately, in the automotive aftermarket, we have something even better than a crystal ball. We have cold hard data. We can see exactly what vehicles have been sold across the country and we know exactly when they will be out of service warranty and are therefore likely to drive up onto our workshop forecourt.

So, let’s do a little bit of crystal ball gazing (and take a dive into the data) to see how the car parc is changing in Australia and New Zealand, and what steps we should all be taking to plan for the road ahead.

and what that means for your workshop

Manual

more popular

Continuously Variable Transmision (CVT) used to have a fairly dire reputation but the engineering and performance has been improved in recent years. Japanese manufacturers, in particular, have embraced them, and that means the number of CVTs on our roads has markedly increased.

Recently published data for Australia from ACA Research for the Australian Automotive Aftermarket Association (AAAA) found around one in six vehicles registered between 2013 and 2020 use a CVT.

That growth seems to have come at the expense of manual transmissions, which account for just one per cent of four-wheel-drive and six per cent of non-4WD vehicles registered in the same period.

What does this mean for your business? ACA Research’s assessment is that manual transmissions are becoming a niche service offering.

“From a parts and servicing perspective a choice must be made, which is deciding the importance of catering to (specialising in) these vehicles, as opposed to a mass market alternative,” the company’s analysts said. “Ultimately, this will come back to understanding your current and prospective customers and the composition of your local car parc.”

The spectre of electric vehicles versus the reality

Electric vehicles have been looming large across the horizon for some time now. When our State of the Nation survey asked Members what made them feel confident or not about the future of our industry, almost a third said EVs and hybrids left them feeling not at all or only slightly confident. This was up from 11% just two years earlier.

With our governments committed to lowering carbon emissions to tackle climate change, we’re constantly being told to expect a massive influx of EVs and hybrid vehicles. But when Members are servicing just four EVs or hybrids a month on average, it’s easy to feel cynical about the speed of the transition.

The transition will be governmentled as our countries try to tackle their emissions to meet their climate change commitments. New Zealand has invested $1.3 billion into a plan its government believes will see Zero and Low Emission Vehicles (ZLEVs) make up 30% of the national light vehicle fleet by 2035. The Australian Government has set a target of 50% of new cars to be EVs by the end of the decade. That would mean a million EVs on Australia’s roads by 2030.

This represents an significant change for many businesses in the aftermarket. We can either see it as a threat or embrace it as an opportunity. Either way, the gut instinct of many in the aftermarket would be that such fast adoption of EVs is unlikely. So, what’s the reality?

Fleets are already leading the charge

Analysis by the AAAA and ACA Research suggests the revolution is likely to be led by commercial fleets, and the feeding of ex-fleet vehicles into the aftermarket, over the next decade.

“These will, however, be limited in terms of both numbers and usage, with hybrids playing a much more significant role at this point in time,” ACA analysts told aftermarket.com. au. “In fact, from a servicing and maintenance perspective today, it is more important to be equipped to service hybrid vehicles (such as the hybrid Toyota Rav4) than it is to service electric ones.”

Initially, dealerships will handle the servicing requirements of these vehicles, but that will naturally shift to the aftermarket beyond the warranty period.

What does all this mean for your business?

“Fleet business is important for many independent and chain workshops, and so in the same way that fleets are currently making decisions about when they should be investing in EVs, workshops that are catering to these businesses should be considering what preparations they need to make to ensure they can continue meeting the needs of their customers through the coming transition,” ACA Research said.

Let’s not lose sight of our bread-and-butter business just yet

For all the talk about half of new vehicles on our roads being EVs by 2030, the AAAA and ACA Research predict it’s likely to be closer to 6%. AAAA Chief Executive Stuart Charity said while the industry was supportive of greater EV uptake, there was a large gap between government aspirations and what is likely to be the reality.

“The targets are seemingly plucked from nowhere with little rationale given, and as an industry we become despondent every time a new target is announced,” he said. “There is specialist knowledge required to repair and maintain EVs, and by engaging and consulting with industry we can commit to investing in tools and skills to facilitate a more seamless transition to EVs.”

It all comes back to that crystal ball. What were the top-three selling vehicles in New Zealand in June this year? The Mitsubishi Outlander, the Toyota HiLux and the KIA Sportage. It’s a very similar story in Australia, where drivers are buying SUVs, not EVs.

“The volume of ICE (internal combustion engine) vehicles currently on our roads and the 10-year average age of the car parc means ICE vehicles will remain the predominate vehicles in our car parc for many years to come,” Mr Charity said.

What’s the take-away for my business?

You don’t need a crystal ball to make the right decisions for the future of your business. You just need to be prepared for what you see coming down the road.

Being prepared means knowing your business and understanding your local community. AAAA’s Car Parc Data Tool can help you with the latter.

The AAAA’s advice is that there is no universal strategy for workshops when it comes to the changing car parc. Simply play to your strengths and your local area.

transmissions almost extinct as CVTs become

Holiday in

Participation

Participation

Don’t Let the Grinch Steal Your Christmas: Tips for leaving your premises unoccupied over the holidays

The Christmas holidays are a great opportunity to down tools for a while and spend some time eating, drinking and being merry with family and friends. You might also be heading off on a trip with the kids during the school holidays.

This means that your business premises are likely to be unattended for an extended period of time over the Christmas break. Unfortunately, burglars don’t necessarily take the festive period off like the rest of us. In fact, figures from the NSW Bureau of Crime Statistics and Research in previous years have shown that Christmas Eve and New Year’s Eve are actually the peak times for property offences.

Add to the mix that ABS data has shown that unlawful entry with intent has increased by 4% in the last reporting period, and you have plenty of reasons to double-check the safety of your business premises before you knock off for a break. The good news is that Capricorn Risk Services can help provide protection against theft and damage should the worst-case scenario come to pass.* That being said, prevention is always better than cure, so we’ve listed some tips below for keeping your business as secure as possible while you enjoy some time off.

DOUBLE-CHECK ALL ENTRY POINTS

Unlocked windows and doors are easy entry points for burglars.

HIDE/REMOVE ALL VALUABLES

Including electronics & expensive portable equipment.

LEAVE THE LIGHTS ON

Well-lit premises are less appealing targets. Motion-sensor lights are also a good idea.

TEST YOUR SECURITY CAMERAS AND ALARM SYSTEM

Make sure that they’re turned on, armed and working.

UPGRADE YOUR BUILDING’S SECURITY

If you have the time and resources, install anti-pick locks and put bars or cages over the windows.

Getting a quote is easy. Simply call 0800 555 303 or email info@capricornrisk.com and your Risk Account Manager can help.

*These products are only available as a general insurance product. Products sold through Capricorn Risk Services Pty Ltd (NZBN 9429041139813) include discretionary risk protection and general insurance products. Discretionary risk protection is issued out of Australia by Capricorn Mutual Ltd. Before deciding to acquire discretionary risk protection you should consider the Product Disclosure Statement to see if it is appropriate for you. This can be obtained from Capricorn Risk Services Pty Ltd by phoning 0800 555 303 via email info@capricornrisk.com or by visiting website capricorn.coop/ risk. General insurance products are issued by a range of insurers and are available through Capricorn Risk Services Pty Ltd as a member broker of PSC Connect NZ Limited. Capricorn Risk Services Pty Ltd is a registered financial services provider (390446) and a corporate Authorised Representative (No. 460893) of Capricorn Mutual Ltd (AFSL 230038). Capricorn Mutual Ltd has published a Target Market Determination for its protection which is available at www.capricorn.coop/about/capricorn-mutual.

Car Review

The Skoda Fabia is still one of my favourite small hatchbacks. Back in 2015, I drove the base model with a 6-speed manual gearbox and was smitten. It was so torquey with that 1.2-litre turbo motor, and it was a hugely fun drive. In fact, in 2015 the Skoda Fabia won our $20K Challenge.

That was seven years ago, and for 2022 Skoda has released an updated model. As cars do, it’s grown in physical size and, well, price. There’s just one model of Fabia for 2022, and it’s the top-spec Monte Carlo priced at $39,990.

Is the 2022 Skoda Fabia value for money at that price? Time to spend a few weeks behind the wheel to find out. For the second week, DriveLife’s Alistair Weekes will take the car and give his point of view on the new model.

What we do and don’t like about the 2022 Skoda Fabia Monte Carlo

What we like What we don’t like Torquey and

smooth engine

What’s in the 2022 Skoda Fabia range?

New Zealand gets the one model of the Fabia, the Monte Carlo, priced at $39,990. As at 26th of September 2022 it’s eligible for a $2,181 rebate under the New Zealand Clean Car Programme.

Power is by a 1.5-litre, 4-cylinder turbo-petrol motor that outputs 110kW of power and 250Nm of torque. Combined fuel consumption is stated by Skoda at 5.4L/100km. The transmission is a 7-speed DSG automatic gearbox and the car will get to 100km/h in 8.0 seconds.

At the launch, Skoda NZ suggested a hybrid version may be coming at some point.

Our review vehicle’s optional equipment

Velvet Red paint $1,000

Including the optional equipment our review car’s retail price is $40,990.

to SUVs. All

or additional cost of the New Zealand Clean Car Programme.

below exclude the

First impressions of the 2022 Skoda Fabia Monte Carlo

In Velvet Red, our test Fabia stood out from the crowd, and then some! I had people looking at the car wherever I went, and I put that mainly down to the colour. Put simply, it looked amazing. I very much enjoyed returning to the car in the supermarket car park. This design in Velvet Red is a stand-out.

As far as design changes go, well there’s been plenty. The car has changed all over, with the front grille now resembling that of the upcoming Enyaq EV[LINK]. Still up front, there are active shutters to help reduce drag and LED headlights to help modernise the front end.

At the rear, the tail lights now flow into the hatchback itself and the rear of the car is certainly one of its most appealing features, for me at least. It all seems to work well back there, with nice flowing lines and not too much clutter.

Overall, the new Fabia is a win in the design department.

What’s the interior like in the 2022 Skoda Fabia Monte Carlo?

I think one of the things I took away from the launch of the new Fabia was the interior. The quality, trim levels and finish had moved up to a new level.

In saying that, when I picked up the Fabia Monte Carlo, I thought I was in a base model. The manual handbrake and lack of heated seats in a top-spec version made me feel like it wasn’t top-spec after all. During the cold snap we experienced while I had the Fabia, I missed those heated seats quite badly. The seats are manually operated, too. No huge problem but a little strange not to have electric seats in a top-spec model.

But those things are pretty much the only interior items that are missing from the Monte Carlo. There’s still a 3-stage heated steering wheel, Qi wireless phone charging, Android Auto and Apple CarPlay, one-piece sculptured front seats and quite a bit of other gear that’s included with this model.

That heated steering wheel is perforated where you hold it and feels excellent. It’s flatbottomed too, for that sporty touch.

The wireless phone charge pad is right up front and it leans forward to reduce the temptation to look at the screen since you can’t see it. In front of the wireless charger is another storage area of reasonable size.

Behind the gear lever is a small square for dumping change (I guess) but, weirdly, Skoda has put this behind the gear shifter, and then the two cup holders behind that storage area. It means a tricky reach backwards for whoever is using the last cup holder. It feels like it would have been a better idea to put the cup holders right up there behind the gear shifter, and then the storage bit closer to the centre cubby. But hey, it’s not the end of the world. The centre cubby isn’t large, taking a wallet and a few other smaller items. But the glovebox is fairly decent in size, for the size of the car. There is another small but usable cubby on the right-hand side of the steering wheel, big enough to fit a wallet.

As usual for a Skoda, there are lots of Clever Touch items in the cabin. The driver’s door has an umbrella inside it, as well as a rubbish bin-type of arrangement inside the driver’s door pocket. There’s a parking ticket holder on the windscreen, cellphone holders on the back of the front seats and also a pen holder in the front centre console, by the wireless charger. As someone who carries a pen in the car all the time, but can never find it, I found this the most useful Clever Touch. Simple, cheap and effective. Or perhaps I’m just too easily pleased.

Fabrics used in the interior are excellent, with a good mix and not many hard plastics at touch points. The dash has some fake carbon fibre on it, and it looks okay. Skoda has been bold with the dashboard itself, and the car has FABIA on either side of the dashboard in size 100 font. But don’t panic, it looks fine and does give the car a bit of identity. The doors also have a carbon fibre material, but it’s soft touch for your elbows to lean on.

The overall quality of the interior is excellent, feeling well-made and, well, European. On the console, doors and dash there are some red pieces of trim. They lift the interior from the blackness and are a welcome design feature. Keep in mind that red trim is in every Fabia sold, no matter what the exterior colour.

Rear legroom can be a bit tight, and while the one-piece front seats look cool, they could add a bit of claustrophobia to rearseat passengers. But rear-seat passengers are treated to two USB-C ports, as well as a couple of air vents - something not often seen in a small hatchback. Headroom front and rear is reasonable, with the rear seats sculptured down to give more height.

The boot of the new Fabia is a very decent 380 litres in size, equal biggest in size in our comparison table. It’s deep, too, and the floor is a double-height system so you can remove the bottom layer to fit tall pot plants and what-have-you in there. Under the lower floor is a rare sight, especially in a small hatchback; a full-size steel spare. It’s a welcome sight.

There are lots of things happening in the boot area. You get some dividers that simply velcro onto the floor to stop things sliding about. There’s also a rubber mat under the top floor that you can use when transporting wet or muddy gear. A cargo net is stuck in a side pocket and there’s also a fabric curtain (Skoda calls it a Cargo Shelf) that folds out to hold long umbrellas or wet jackets.

What’s the 2022 Skoda Fabia Monte Carlo like to drive?

After going to the launch of the new model, I was very much looking forward to spending a week behind the wheel, and even more so handing off the car to Alistair from DriveLife to make sure I wasn’t loving the new model too much simply because I loved the old model.

Heading off in the car from the dealership, that torquey engine gives an instant first impression of a fun week; it’s so damn torquey, smooth and refined. Yes, 250 Newtonmetres of torque is not a massive amount by today’s standards, but keep in mind that the 2022 Fabia weighs in at 1,283kg and you get the idea. Performance is effortless at any time, in any drive mode.

And it is also the refinement of the motor that is classleading; at 100km/h, there is zero engine noise. It’s only on Wellington’s steepest hills that the engine can get a little vocal, and even then it’s never bad or intrusive. It’s smooth, too, right out to the 6,500rpm redline. For me, it’s top marks for the engine. Driving the new Fabia reminded me of the CX-5 I had the week before. Both engines are incredibly refined and smooth, with gallons of torque.

Attached to the engine is Skoda’s standard 7-speed DSG gearbox. Does it have the usual DSG quirks of being a little jerky at low speeds? Totally does. But as usual with a dual-clutch automatic, once on the move all gear changes are crisp and quick. While the Fabia doesn’t have steering wheel paddles, you can either pull the lever back down to

switch the transmission into Sport mode or flick the lever to the right to engage Manual mode.

The Monte Carlo is a front-wheel-drive, so in the wet with full-throttle acceleration you will get some axle tramp. It’s not too bad, and it’s only a second or two before electronics start working and rein it in. In the dry on a full-throttle start, there’s just a bit of wheel chirp and then those 250Nm get you moving very quickly. Skoda suggests 8.0 seconds to get the car to 100km/h but, honestly, it feels quicker than that.

The last Fabia I drove handled very well and was a fun car overall. The 2022 Fabia is the same, but more. Turn-in on the car is excellent and those Michelin Primacy tyres grip like hell, giving the car above-average handling capabilities. It’s a boatload of fun on a windy road, but if you aren’t someone who likes to chuck a car around, don’t panic; the Fabia has your back and it gives the driver a lot of confidence, never feeling out of control. The handling is pretty balanced for a front-wheel-drive, and as far as handling goes it impressed me more and more over my time with the car.

So it’s fun on a windy road, but what about the Daily Drive where the 2022 Skoda Fabia will spend most of its time? Overall, it’s top marks. That torquey, quiet and smooth engine makes commuting an absolute breeze and often the car will go into 2-cylinder mode. You won’t even notice as it simply doesn’t sound or behave any differently, but there is a dashboard indicator to let you know it’s shut down half the cylinders. Even at 100km/h, the car will sometimes go into 2-cylinder mode if it can. Impressive stuff.

Visibility out of the car is good, except for some large C pillars which are common in today’s vehicle design. Lucky that visibility is generally good, as the Monte Carlo does not come with blind-spot monitoring. At the launch of this model, Skoda NZ mentioned the semiconductor shortage is affecting such features.

Adaptive cruise control is standard on the 2022 Fabia and it will bring the car to a stop. On the downside once stopped, after a few seconds the car will beep at you and then start creeping forward. This is one of the downsides of not having an electric park brake. Speaking of brakes, well they too are excellent. They’re not anything radical or special but the feedback from the pedal and the way the car washes off speed is a pleasure. They’re the best brakes I’ve used on a car for a while.

Still on that Daily Drive, the ride quality is surprisingly good for such a light car. Short, sharp shocks are felt in the cabin, but it’s never bad. Mostly the car simply floats along, and all credit to Skoda as this is tricky to achieve with its relatively light weight. Front and rear parking sensors are standard, as are white-edged gauges, and they look great. Clear too, although there is no 50k/h marking, but one of the driver’s display options is a big digital speedo, so all is not lost.

We drove the Skoda Fabia for around 1,000km and for fuel consumption it returned 6.4L/100km, just a little more than the 5.4L/100km that Skoda suggests for a combined rating.

Summary

Alistair pretty much summed up my feelings about the 2022 Skoda Fabia Monte Carlo; great car all around, but there are other options out there that some may be tempted by.

That doesn’t negate the fact that it has a superb drivetrain, looks great and is well-built. Add into that the handling capabilities and ride quality of the Fabia and you have a car that deserves to sell well, but may be overshadowed by its own family members. And that’s a real shame, as the 2022 Skoda Fabia Monte Carlo is an excellent car in its own right.

Steve shares his secrets to successful business growth

Rarely does business growth happen by accident. While it may happen organically — like winning new customers by word-of-mouth — it’s the decisions we make as workshop owners, as business leaders, that allow growth to happen. Usually, when our businesses grow, it’s because we’ve made a plan, worked towards it and successfully delivered on it.

This year, 73% of Members told our State of the Nation report survey that they had a plan in place for growing their business — up four percentage points on 2021. Almost two-thirds planned to improve business efficiency, 45% had plans to improve profit margins, 42% planned to employ more staff, two in five planned to increase the capacity of their workshop and 38% planned to win more customers. It was great to see.

Worryingly, retirement and succession planning among Members — which we saw grow during the pandemic — now appears to have stalled, with 45% of Members aged over 55 having either no plan or saying it’s too early to plan. Yet we know having a retirement and succession plan in place leads to growth, as it gives business owners, and their heirs, long-term goals for their enterprises.

Capricorn Member Steve Turpin is a fantastic example of the kind of growth that can be achieved. Steve is the Director of Diesels Mobile Mechanics in Maddington in Perth, Western Australia. When he started his business a decade ago, he was just a bloke with a HiLux ute. Initially, he worked in labour hire for CJD and in the mining industry. After a couple of years, he was so busy he had employed a mechanic and started doing jobs out of his shed at home in Forrestfield. Over the next six years, the business steadily grew.

“We just slowly took on bigger customers and bigger jobs, and then I got to the point where we couldn’t keep up with the work with the size shed that we had, the supplies we had,” he said.

In June last year, Steve bit the bullet and bought a 1400 square metre workshop, with 400 square metres of office space above it. He’s now busy enough to keep two five-tonne overhead cranes, a set of truck hoists, four full-time mechanics, a supervisor and an administration officer fully occupied.

None of this growth happened by chance. But it did happen organically. “When I decided to find a workshop, everything I was looking at I could see us outgrowing in six to 12 months, so I made the big step and went for triple the size I thought I would need,” Steve said. “There was no middle step. But, at the same time, doing that has just generated so much more work for us.”

Steve has the space to grow — and he knows exactly what he’s going to do with it.

“I’d like to do a lot more of the technical side, the engine building and the engine diagnostics, as opposed to basic repairs,” he said. He’s also looking to invest in new equipment to provide specialist engine building services to the mining industry.

Steve has achieved all of this while prioritising a work-life balance. For him, there’s nothing more important than spending time with his kids. It’s a relatable dream, but 42% of Members told State of the Nation that a worklife balance is something they really struggle to get right. Although he’s busier now that he has a large workshop, Steve said a work-life balance is achievable if you have good staff. But finding good staff is something two in five Members are also struggling with. So, what’s the secret?

In summary, it’s respect, opportunity and flexibility.

“In most places (staff) get overlooked way too much and there’s too much control,” Steve said. “You don’t get to do your own job. I say to the guys, ‘This is the job, this is what I need to achieve, this is the timeframe we have. You go about doing it. If you’re not going to make it, you need to let me know, but it’s your job, it’s your responsibility. You give them control. The job is their little baby.”

There’s also the free smoko and the flexibility to attend to family commitments. Together, it creates loyalty among the team and makes finding staff easier.

“Ninety per cent of our people have come to us through word-of-mouth,” Steve said. “The people that work for us enjoy working here and they tell other people, and it just generates more people in a good environment.”

Steve’s philosophy is that he doesn’t want to be the cheapest, but he wants to be the best.

“The quality of the work far outweighs everything in my eyes,” he said.

Customers, like employees, continue to arrive through word-of-mouth recommendations, so the focus on quality is key to Steve’s growth strategy. But he has an eye on the long term, too. He calls that 1400 square metre workshop his “superannuation plan”.

“It’s self-insurance, to set us up for the future,” he said.

What’s Steve’s advice to anyone hoping to grow their business and enjoy his kind of success?

“Don’t give up,” he said. “The first three to four years are hard. “And don’t be cheap. Be better.”

The workshop of tomorrow

by Jeff Smit

The rate of change in the aftermarket auto repair industry has been so fast and so dramatic over the past decade that it has become almost impossible to make accurate forecasts of the industry’s future. It’s encouraging that the main market indicators show that most in the industry are quite optimistic about the growth outlook, but will optimism be enough?

If the technology growth of the past decade has taught us anything, it would be that businesses must learn to evolve and be prepared to change the way they operate if profitability and survival are the goals.

One of the significant issues that will dominate the future for all businesses will be the serious shortage of skilled technicians, covering a wide range of vehicle repair. The best we can all do is address the most obvious things that will impact our lives in the foreseeable future and be prepared to make the investment to keep our workshops on the front foot, prepared for anything.

The most obvious are, of course, training and diagnostic equipment. These are not

new by any means. It is probably safe to assume that those businesses that have survived thus far, and are consistently profitable, are those which long ago embraced the need for training and keeping equipment up to date.

Future workshops are going to be a lot bigger than today’s average, and they will be cleaner, air conditioned and heated. Software used in office management and in diagnostics will be constantly upgraded.

One certain growth area will be in the calibration of the many different systems that control and monitor the modern motor vehicle. Those independent workshops that ignore this trend will find it difficult to survive in the longer term.

From a layman’s point of view, humans don’t drive cars anymore; computers drive cars. Fully autonomous vehicles are around the corner, and the technologies they contain will change the very foundations of workshop skills and operating systems.

The fundamental role of a technician will change, and so too will the tools and equipment they will use.

Over the end of year break, I would recommend that every workshop owner and manager answer a simple question –where do you want to be in five years’ time? Do you want to be the one-stop shop that does everything? Perhaps you would be better off subletting some jobs or calling in experts when you need them?

Being a one-stop shop is going to be difficult, and be increasingly expensive. I believe specialisation will be commonplace in the aftermarket industry.

Most workshops can list their specialities, whether it be with a make of vehicle, or in diagnostics of things like automatic transmission, suspension, or programming.

So having identified your specialities, your approach to handling the huge variety of car problems that your customer brings to your door will change slightly. You never have to refuse a job simply because it doesn't fall within your area of expertise, but you assure the customer that you can look after the vehicle, and if it’s a problem that needs expertise outside the skills of the workshop, you have a network of specialists at your fingertips.

Whatever direction you choose, make sure you can deliver on your goals by investing in the tools and workforce skills that your speciality requires. Workshops will need to be very clear and honest about what they do (and what they can't do) in-house, and what expertise they can tap into if needed.

It will be hard for some to shake off the now old-fashioned notion that your workshop can do everything. This will not be possible in the near future.

Many workshops will close during the next decade as their owners reach retirement age, simply because they do not see the benefit of keeping up to date with technologies.

This is a short-sighted strategy. Justifying your decision not to keep up by thinking you are too old for all this technology is not doing the right thing by the business you have worked hard to grow.

If you don’t keep up, there will be precious little to sell when you retire in a few years’ time and instead of cashing in on your life’s work, you will be just closing the doors and walking away. With the help of employees, it should be possible to accommodate the waves of new technologies and retain worthwhile skills that will add to the value of your business.

The best way to future-proof your business is to constantly monitor where you sit in the market, and make the changes and the investments needed to protect your assets and your future.

Photo by Laura Cleffmann / Unsplash

Rides! Rides! Rides! Calling all

Want the world to know about your classic car, racing vehicle or other automotive passion piece?

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!

Are you dealing with staffing shortages?

According to our State of the Nation 2022 report, understaffing is having the following impacts on Members:

Impact on business

A lack of qualified staff is the top challenge facing the industry, and finding good staff remains a top three challenge for Members in running their businesses.

Creating Opportunities

We’re not attracting or employing enough apprentices. We’re also not employing enough women (or providing enough opportunities for them).

Pay rates and upskilling

Labour rates and wages are up 6.8% across the board. The highest pay increases are 11% for Australian auto-electricians and 12% for NZ panel beaters and spray painters. Investing in current employees can help with staff retention rates.

Keen to learn more about how to meet the challenges facing the Australasian auto industry? Use this QR code to visit the State of the Nation web page & DOWNLOAD THE FULL REPORT.

a reminder of endless summers past

For anyone over a certain age, memories of summer holidays are likely to include sweaty hamstrings slowly toasting against blistering vinyl seats, sitting in the back of a vehicle that, in the January sun, felt like travelling in a pizza oven hurtling along the highway towards the beach.

f that makes you feel nostalgic, then you’ll probably also feel wistful about this piece of news: the original summer beach bum vehicle of choice, the VW Kombi, is making a comeback.

But before we get to the rebirth of a legend, let’s refresh our memories of one of the automotive industry’s design classics, and how it became a symbol of love, freedom and the endless summer.

The “T2”, as the early Kombis were officially called (Kombi is short for kombinationkraftswagen), was first unveiled to the world in 1949 at the Geneva Motor Show. It was the big brother to the already popular VW Beetle — a van version, initially designed on the same wheelbase. Weighing in at 1.5 tonnes with a 25 horsepower (19kW) engine, a design icon was born. That beloved first generation of Kombis (up to 1967) are known to collectors as “Splitties”, for their split front windscreen.

The van was redesigned in 1968. The split windscreen was replaced, the engine was stabilised with a back bar, the suspension was fixed (well, mostly) and the bodywork completely changed shape. Arguably, a little of the original Kombi charm was lost, which is perhaps one reason why original Splitties now command upwards of $200,000 at auction in Australia.

By the time of the redesign, the Kombi had become wildly popular with the burgeoning American counterculture. Hippies were buying them, apparently in part to thumb their noses at the establishment and protest the all-powerful US motor industry. They drove them to Woodstock. The surfies threw their boards in the back and drove them to the beach. Whole families piled into them and went on adventures — camping, fishing and holidaying together. The Beach Boys and Bob Dylan put the Kombi on their album covers. The vehicles co-starred in

iconic films, like 1982’s Fast Times at Ridgemont High. The adorable Kombis delighted people wherever they went — winning hearts and bringing smiles to the faces of children and adults alike. Why? Because they were synonymous with fun! They were fun to look at, they were fun to drive, they were fun to travel in (lack of air-con not withstanding) and they took you off to do fun things — like camping and fishing jam-packed with thousands of unwashed hippies and no toilets, waiting for Jimi Hendrix’s set.

Through the 80s, 90s and noughties, a series of VW vans were released (the T3, T4, and T5), but sadly all the pleasing design elements had been stripped away — and the smiles and the public reverence disappeared along with them. They were boxy people movers. Possibly very good ones, but hardly style icons. Nothing to set a free-loving hippie’s heart on fire.

So, it has been pleasing to see VW’s sleek and stylish nod to the past in its soon-to-bereleased ID. Buzz — the first fully-electric vehicle from Volkswagen Commercial Vehicles. From the two-tone paint job to the “smiling” front end, the ID. Buzz echoes the classic design of the original Kombi. The five-seater has a 77kW battery pack and 204 PS motor, rapid DC charging (up to 170kW) and 11kW AC charging, and a driving range of 415km.

In a move that would delight the hippies of the 1960s, VW says the ID. Buzz uses organicbased vehicle paint, is made from renewable raw materials and works emission-free on the road. VW is even recycling the batteries at their end-of-life.

While it’s hard to recapture the indefinable X-factor that made

the Kombi such a beloved classic, the ID. Buzz has returned charm to VW’s vans. But the ID. Buzz is also more than just a nod to simple Kombi nostalgia. If that’s all they’d wanted to achieve, they’d have got rid of the air conditioning and included vinyl seats. (Kids these days just don’t know how good they’ve got it.)

Happy camping. Peace out.

THE YEAR WE RETURNED TO NORMAL

by Paul Marinelli

2022 can best be described as a renaissance year, as it followed more than two years of pandemic-induced cancellations, postponements and countless major event false starts. The past 12 months really saw our industry get out there again, both locally and internationally.

It was the year that saw the return of so many of our major industry events, headed by our own Australian Auto Aftermarket (AAA) Expo in April, held on the same weekend as the long-awaited return of the Australian Formula One Grand Prix in Melbourne.

Over 270 of the industry’s leading brands were on display at the AAA Expo, showcasing the latest vehicle repair and servicing equipment, parts, tools and accessories, new technology and trends. The event set a new benchmark by delivering the most comprehensive and interactive education program ever seen at this biennial trade show. This included speaker panels featuring technical experts, workshop owners, politicians, educators, international guests and the newly introduced, and very popular, Workshop of the Future sessions.

Both major automotive events drew outstanding attendances as people flocked in their thousands to meet face-to-face, or to witness the world’s greatest motor racing show return to town and be part of the incredible atmosphere created by a sell-out crowd.

It wasn’t just Australia that decided to push ahead with its

automotive events. The United States and Europe were completely open for business in 2022, with conferences, events, trade shows, exhibitions, motorsport showcases and general major sporting events back in full swing.

One of the best examples of this was the return of the world’s biggest automotive aftermarket trade fair, Automechanika Frankfurt, in September. A total of 78,000 visitors from 175 countries attended this mammoth event to view products and services from 2,804 companies that had travelled from 70 countries to exhibit across no fewer than 19 expo hall levels and outdoor exhibition areas. A total of 350 separate training and open discussion events were held over the week. This had never been done before at this major automotive aftermarket industry event.

Peter Wagner, Managing Director of Continental Aftermarket, best summed up what the return of this major global biennial event meant for the industry.

“Automechanika this year made two things very clear,” Mr Wagner said. “Firstly, even in an increasingly digital world, everything comes down to people. Speaking to someone in person, visiting a stand, making your way through the exhibition halls, even shaking hands - none of these things can be replaced.

“Secondly, the industry’s transformation has continued to accelerate. Fields like digital services for workshops and alternative drive systems, for instance, are more important than ever. As a forum for promising fields like these, Automechanika will be even more important in the future because expertise is absolutely essential if workshops and dealers are to continue playing a major role.”

All local and international motor racing categories returned to life with record crowds attending Formula One and Supercars events throughout the year, as people rejoiced at once again being free to attend and enjoy their favourite sporting events. The spectacular Singapore Grand Prix returned in September and was a complete sell-out. That was also the case at the United States Grand Prix in October when a staggering 440,000 fans took part, which followed the sell-out debut of the Miami Grand Prix street race in May.

Even the music world rocked back into action with KISS continuing their twice cancelled End of The Road World Tour that finally reached Australia in August, three years later than originally scheduled. Many international artists followed suit and the fans eagerly followed, keen to enjoy the spectacular live performances they had missed so much.

Getting back to normal was something that we cherished in 2022. It has helped us rediscover an appreciation for all the things that we missed out on over the past twoand-a-half years. So, be sure to visit that next trade show, go on that family holiday the pandemic so abruptly disrupted, and visit that major sporting event you have always wanted to see … do it all!

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