Showrooms across metropolitan Sydney – Australia’s largest new-car market – are poised to close on Sundays and shift to six-day trading to fall into line with the rest of the nation, as a special investigation by CarAdvice has found staying open seven days does not necessarily sell more cars.
New-car showrooms across Sydney have been trading seven days a week for more than two decades, but rising costs and difficulties in keeping experienced staff mean that many dealers are preparing to voluntarily shift to a six-day week, as is the norm in every other capital city.
Car dealers in most other states operate five-and-a-half or six-day weeks; Victorian outlets are allowed to open seven days but most close on Sundays, with the exception some used-car chains.
CarAdvice understands the NSW Motor Trader’s Association (MTA) has been conducting industry surveys into rolling back Sydney’s seven-day working week and initial feedback is that a shift to six days now has widespread support.
It is a stark contrast to when the idea of a six-day week was floated more than a decade ago; back then some large dealer groups threatened to remain open in defiance of any orders and pay the fine, at the time proposed to be about $10,000 per dealership site.
However, after 24 months in a row of sales slowdown – the biggest slump since the Global Financial Crisis – some dealers are now struggling to keep their doors open and want to switch to six-day weeks to save money, keep staff employed, remain in their communities, and maintain their local customer base.
Figures from Australia’s three largest car-buying states show that trading seven days a week does not necessarily sell more cars.
Data compiled by CarAdvice – comparing the most recent population figures from Census and overlaying them with last year’s sales numbers – shows that 42 new cars were sold for every 1000 people in NSW in 2019.
In the same year, 46 new cars were sold for every 1000 people in Victoria and 47 new cars were sold for every 1000 people in Queensland.
It is the norm for new-car dealers in both Victoria and Queensland to operate six days a week – and yet those states sold more cars per capita than NSW even though Sydney metropolitan dealers are allowed to open for seven days.
Conversely, in parts of Australia with large sections of remote areas – West Australia, South Australia and the Northern Territory – between 35 and 38 new cars are sold for every 1000 people.
Although a proposal is due to be put forward to the NSW Government to formally ban Sunday trading of motor vehicles in metropolitan Sydney, there is a groundswell of support in the industry to adopt a voluntary code before it becomes law.
Car showrooms, used car lots, and service centres across Australia are allowed to remain open as an “essential service” during the COVID-19 lockdowns, in particular to support emergency workers and their vehicles, and also to give people a chance to buy a new or used car if they are trying to avoid infection on public transport.
Sunday trading may be one of the first casualties as new-car showrooms in metropolitan Sydney try to contain costs and keep staff employed amid the COVID-19 lockdowns, but it may simply bring forward a plan that was already well underway, say industry insiders.
While new-car buyers may initially be concerned about a lack of convenience if Sunday trading stops, the industry insists it will be better for consumers in the long run.
“The proposed shift to six-day trading will mean more dealers in more areas can stay open and keep people in their community employed, and that ultimately will be better for consumers,” says James Voortman, the CEO of the Australian Automotive Dealers Association (AADA), which represents approximately 50,000 employees at 3500 showrooms nationally.
Mr Voortman added that the AADA “fully supports six-day trading in metropolitan Sydney and there is overwhelming support for this from our members”.
“We would prefer (a six-day week) to be imposed by the State Government, because the voluntary system may be tested in certain situations, with some dealers opting to stay open if it were a voluntary code,” said Mr Voortman.
“A switch to a six-day week and closing on Sundays would help the industry retain experienced staff and enable dealers to deliver better customer service,” he said, adding that “we are seeing a united approach and widespread support for this for the first time”.
Mr Voortman said the “constant churn of staff” and the loss of experienced employees is “clearly taking its toll” on the industry in Sydney, and customers are the ones who “ultimately miss out” because they may not be able to get the level of service they are after.
“The digital era has changed our industry and the much of the car-buying process does not have to be done in the showroom, something which is being demonstrated with the challenges presented by COVID-19,” says Mr Voortman.
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