Car dealers call for intervention as job losses loom

Dealers are calling on government to support their apprentices and extend asset write offs as foot traffic drops amid a sales downturn.

Car dealers around the country are being threatened by the coronavirus pandemic. Picture: John Appleyard

Car lots across the country are being threatened by the coronavirus pandemic and dealers are now pleading with government to support their apprentices and extend asset write offs.

Industry sources say motor dealerships are seeing foot traffic drop dramatically in the week since the domestic coronavirus crisis escalated, even compared to two years of negative sales.

Australian Automotive Dealer Association president James Voortman told The Australian that Scott Morrison’s apprentice wage subsidy package had to be extended to businesses with higher turnovers and more than 20 employees if young dealers were to stay in jobs.

“Given this industry has been in a sustained downturn for almost two years, I have fears that a further blow from COVID-19 could put many jobs at risk, including apprentices,” he said.

“Dealers are located all across Australia, in the cities and the regions. They are important employers and we are urging the government to extend this measure to all dealers.”

The motor industry has now seen 24 months of negative sales – longer than the sales downturn after the 2008 global financial crisis – and were hit earlier this year when General Motors announced the end of the iconic Holden brand.

Mr Voortman said the pandemic was already having a serious effect on his members and that he would continue to push for extra fiscal support in the government’s upcoming extra measures.

The AADA will also look for more clarity in the extended asset write-offs for small businesses announced as part of the Prime Minister’s $17.6 stimulus package.

Mr Voortman said he wanted the government to make clear that the cap on write-offs on vehicles under $57,581 would be lifted, and raised to $150,000 with all other assets.

“Dealers need to be in a position to advise their customers as they will try and promote these measures in the coming month,” he said.

“Restricting this to the current car limit will exclude a range of commercial vehicles for tradesmen, farmers and other businesses, such as tour companies and limousine providers.

“We need to breathe life into this industry, and dealers believe that businesses should be able to instantly depreciate vehicles under the $150,000 threshold.”

There is also a push for motor businesses to be given tax relief to survive the COVID-19 outbreak.

A spokesman for the Australian Automotive Association said lowering some taxes and eliminating others would have a widespread stimulatory effect for the economy.

“The federal government needs to consider the implications of lower new vehicle sales as a part of its planning not just from a business stimulus perspective, but also from a road safety and climate response perspective,

“As a part of that, the government also needs to consider removing redundant protectionist vehicle taxes at a time when people are increasingly worried about cost of living pressures.”