Buy A New Car
5 Ways Car Makers Reduce Price Competition
It’s a murky world the Australian automotive industry. Always has been and probably always will be. When big, emotional purchases are on the table and there’s a complicated system of sales distribution, it’s always going to be difficult for the consumer to work out what’s a good deal.
The ‘problem’ is you can only buy a new car from an official new car dealership, licensed by the manufacturer. Unlike almost any other product there aren’t new car resellers, independent distributors or outlets. The actual purchase must always take place at a dealership and that dealership must be bound by conditions and obligations bound by the carmaker. This means the manufacturer is in a unique position to influence the sales process and therefore the competition.
Of late there’s been significant interest from the ACCC and the government into what this means for the consumer in terms of pricing competition and transparency and also for the long-suffering dealerships.
In June, the ACCC announced they were examining the competition risk from the merger of the two biggest new car dealer groups in Australia
“The ACCC’s preliminary view is that the proposed acquisition is unlikely to substantially lessen competition for the supply of new cars in Melbourne, Sydney and Brisbane or nationally”
In August, the Morrison government announced a reform entitled ‘Delivering a fair and competitive car retailing sector’
“We have heard the concerns of those within the sector and are committed to creating a level playing field. It’s about ensuring everyone gets a fair go, including our small and family car dealers,”
This is squarely addressing the influence that car manufacturers have on the new car marketplace in particular with respect to their franchise agreements.
Private Fleet, having relationship with over 1,000 new car dealers, is uniquely placed to have recognised and worked through many of these issues over the last 20 years. Here are 6 ways the car makers restrict competition:
1) Don’t Advertise Discounted Prices
Most independent businesses are unrestricted when it comes to what price to set for their products and services. After all, it’s their profit margin so makes sense that they can vary their pricing structure to suit their needs. Not so with new cars. If a dealer advertises a new car at below RRP (or current national driveaway special), they will risk the wrath of the car manufacturers and likely be instructed to take the ad down
2) Don’t Advertise In Other Territories
Car makers allocate each dealer a ‘PMA’ or Primary Marketing Area. If dealers advertise outside of these defined boundaries then, again, they’ll get a tap on the shoulder from the manufacturer.
3) Discourage Working With Brokers or Car Buying Services
Hits close to the bone this one. But for almost all of our 20 years OEMs have put pressure on dealers to only sell directly and not through intermediaries who aren’t contracted to the sales and pricing conditions as the dealers themselves. Thankfully, although dealers would never dare to publicly challenge this, in practice they have a business to run and overheads to meet so this ‘advice’ is generally ignored. Here’s an extract from one of Toyota’s many dealer communications on the subject.
“Toyota is aware that new vehicle brokers and buyers agents may be acting as intermediaries between customers and Toyota Dealers. This practise is of concern to Toyota. Toyota strongly believes that Toyota Dealers are best placed to fully service the needs of Toyota customers.”
4) You Can’t Sell Brand-X if You Sell Our Brand
More and more there are multi-franchised dealers across Australia. This makes sense especially for consumers as it makes it easier to compare models & prices in one spot. However certain manufacturers will throw their weight around and threaten to rescind a franchise agreement if a dealer looks to take on a new ‘competing brand’.
5) No Trucking of Cars on Delivery
Dressed up as being the optimal delivery process, certain manufacturers (particularly prestige brands) insist on a personal handover between dealer and car buyer at the time of delivery. But in practise this limits the scope of where a buyer can buy from unless they are prepared to travel a huge distance to compare options. Consider Lexus buyers in Perth – there’s one dealer in WA. Interstate dealers are prohibited from trucking cars across the country so where’s the competition there?
6) You Must Spend $$$ to Promote our Brand
Once a dealership is ‘granted’ a franchise, along with the agreement is a heavy obligation towards supporting the manufacturer’s brand even over the actual dealerships brand. Want to sell plenty of cars without the fancy dealership overheads? Nope, sell our cars and you’ve got to spend X million on an ultra-fancy forecourt to help fly the flag. No efficient volume sales channels here please.
Without exception all these restrictions lead to less pricing competition for the consumer. But what about the poor old car dealer? Yes, I’m serious! The dealers have their pressures and obligations to meet, staff to pay and doors to keep open. If they were allowed to run like normal independent businesses, what impact would that have on prices? What efficiencies would we see flowing through the whole current sales process?
NEXT: Import restrictions, dealer ‘holdback’, legal intimidation…
Private Fleet Car Review: 2019 Kia Picanto GT
This Car Review Is About: The 2019 Kia Picanto GT. It’s the pert and perky little five door hatch, with minor and tastefully styled body add-ons, an energetic powerplant, and a fun factor that’s off the scale. It’s a screaming bargain at just $17,990 driveaway.
Under The Bonnet Is: A zippy and free spinning three cylinder petrol engine with a real warble when it’s spinning up. There are 74kW available at 4,500rpm, and a very useful 172Nm from 1,500rpm to 4,000rpm. Power heads to the front wheels via a five speed manual. Boost and bang for the milk-bottle sized engine comes from a turbocharger that adds plenty of sizzle. The dry weight of the Picanto GT is just 1,007kg, which means that the power and torque, plus the five speed, don’t need to work hard to provide the spark.
Tank size is just 35L for the standard unleaded fuel. Economy, says Kia, is 4.8L per 100km for the combined. In the urban cycle, its far more likely home, it’s 6.2L/100km. Get it onto the freeways and that drops to 4.0L/100km. We finished on 6.4L/100km on our mainly urban test cycle.
On The Outside It’s: The same little block of Picanto that’s been available for a few years but now with extra grin. There are colour highlights from inserts outside and in, new wheels, front bar additions with driving lights and extra air intakes, whilst the rear gets the cool “neon” light look at night plus a twin exhaust and a diffuser style add-on. Nexen supplies the 195/45 N Blue Plus rubber to wrap the 16 inch eight spoke alloys. The review car came clad in Aurora Black, with the GT also having Clear White, Signal Red, and Titanium Silver.
On The Inside It’s: Comfortable and familiar, yet carries a bit more cachet. There are red leather highlights on the front seats, alloy pedals with rubber strips for extra foot grip, and red backlighting for the switchgear. There’s some brightwork on the tiller and piano black for the console stack. Seats are manually adjusted but with the not-quite-as user friendly levers rather than the dials which are MUCH more user friendly. Luggage space is 255L with the rear seats up, 1,055L with seats down. It’s JUST enough, if packed correctly, to carry a decent weekly family shop but if it’s a really decent shop, then the space behind the front seats will need to be used.
Space itself is more than adequate for a couple, but go more than three then the Picanto’s 3,595mm length and 2,400mm wheelbase come into play. Thankfully the front seat room is enough for all but basketball players so pulled forward the rear leg room becomes tenable. Shoulder room is a bit cosy thanks to the 1,595mm and headroom is fine even with a 1,485mm height.
Storage comes in the form of two cup holders in the centre console, bottle holders for the front doors, a coat hook and net hooks in the cargo area. Sounds are from a non-DAB equipped audio system but Bluetooth streaming is standard. Sound quality isn’t as good as it could be either, with depth and punch not on the same level as other systems found in Kias. Apple and Android apps are standard as well. That’s a good thing for those that use them as satnav is not standard.
What About Safety?: Covered. Sort of…AEB (Autonomous Emergency Braking) with FCWS (Forward Collision Warning System) leads the party, backed up by a reverse camera and rear parking sensors. LED driving lights up front add visual safety and add to the visual presence and the headlights are Auto on. BUT, and it’s a big but, no Rear Cross Traffic Alert, no Blind Spot Alert, no Lane Keep Assist, no front sensors, hold back the Picanto GT in crucial areas.
On The Road It’s: An absolute bundle of fun. The engine is a cracker and the gearbox is well specced for cogs. The clutch is light and really could do with more feedback as to where the pedal is in travel and where the plates are in gripping. Once the driver has worked that out though, practice gets the pickup point and shifts to launch just right. However the spring loading for the gear selector is also light and a touch vague in where the lever goes. The gate is close so a slide from second to third feels like it’s in the same line, and there isn’t enough definition in the shifter’s movement to properly advise where the lever’s going.
ONCE everything is worked out, the little engine that could, does. It’s got a real warmth to the sound, yes, but the appeal is in how it pulls the Picanto GT , in how it allows tractability in gentle around town driving or getting serious on the freeway. It’s geared for easy going driving, but also some get up and go squirt as required. The turbo kicks in at just under 2,000 and on the freeway that gearing allows a push of the pedal to see the Picanto GT rocket forward. It’s accompanied by a thrum, a not unpleasant rumble from the three cylinder donk, which is muted when not being pressed.
Off the line it’s easy to feel pressed back into the seat easily when driving in anger. There is some real urge in this tiny engine and it’s something a driver can exploit and enjoy. Bang the gear selector from first to second to third and the GT simply rolls on inexorably, seamless in its acceleration. Throw out the picks and the lightweight car slows quickly and confidently.And thanks to the slightly bigger footprint, and the grippier tyres, hard-arsed cornering can be exploited and enjoyed too. Under power the Picanto GT can be punted into turns that would see the speedo read 20, 30 km/h slower (depending on the corner’s radius and driving conditions) whilst taking advantage of the engine on boost.
Ride quality is good but not great. The rear end is prone to a little skipping around on the roads that have the expansion joints and the whole car will crash bang on missing road sections. It’s a suspension that is flat and taut but not supple enough to dial these out.
What About Warranty?: There is Kia’s 7 years warranty as standard. That’s with unlimited kilometres. Roadside assist is for 12 months initially however if the Picanto GT is brought to Kia for servicing then that extends to 7 years coverage also. Servicing is capped price and for every 15,000 kilometres or annually, whichever occurs first.
At The End Of The Drive. The Kia Picanto GT is an embodiment of the words “pocket rocket”. That 172Nm of torque is so useable in a small car, and somehow manages to stay engaging even when loaded with two adults, a ten year old, and shopping. It’s the gear selector and clutch that blunts the engine’s sharpness as these really could do with tightening up. Ride quality is also not quite en’ pointe as there’s a lack of the absorption needed in the upper end of the travel.
The lack of DAB isn’t crucial but FM sounded dull. If a GT designation is to indicate a top of the tree model, then add a top of the tree audio setup. Make up your own mind by going here.
CarReview: 2019 Genesis G70 2.0L Turbo
This Car Review Is About: The revamped and relaunched as a two car range, Genesis. No it’s not the Phil Collins version. It’s the rejig of the 3.8L V6 first seen a half decade ago, now called G80. And now there’s a BMW hunting smaller version, the G70. This comes in three trim levels and two engine choices, being 2.0T, 2.0T Sport, and 2.0T Ultimate or with the 3.3L V6 as found in the Stinger.
How Much Will It Cost?: There’s a sticker price of $58K plus on roads for the entry level, $62K for the Sport, and a hefty $71K for the Ultimate in four cylinder guise. The Genesis website says $65,533 driveaway, or with sunroof $68,158. In Sport and Ultimate trim it’s $69,733/$72,760 and $76,978.
Under The Bonnet Is: The same potent turbo 2.0L as found elsewhere in the Hyundai and Kia families. It’s a 180kW/353Nm turbocharged 2.0L four cylinder. This is mounted “north-south” and drives the rear rubber via a slick eight speed auto. Otherwise there’s a 3.3L V6 effectively lifted from Kia’s underappreciated Stinger. Economy is rated as 9.0L per 100km for the combined cycle in the Sport, 8.7L in the standard 2.0L Our average around town barely moved from 8.7L/100km, and that was enjoying some of the fruits of the spirited engine.
On The Inside It’s: Pretty nice in this entry level trim spec. Leather seats, heated, not vented (sigh) are comfortable, supportive underneath and around the abdomen and electrically powered for both sides. There isn’t memory seating though. The top level has a diamond quilted leather trim option for the seats. There’s a sunroof, of course ($2500 as an option), and mood lighting in the housing around the switches for the interior lights. If there’s an option to change the colour it wasn’t readily found. All models have a remote key for entry and exit, and it’s cleverly designed to fit in between the spring loaded supports inside the cup/bottle holders in the console.
In the traditional styled centre console is a rocker gear selector, a drive mode dial, and a nook with wireless charging for smartphones, plus USB and 12V sockets. The charge pad is a tad fiddly and requires precise placement of the handset in order to initiate charging. The touchscreen is a 8.0 inch with a familiar look. As a result it’s super easy to use and to read. Satnav is standard and SUNA updates are included. Apple CarPlay and Android Auto are embedded. Sound is via DAB and Bluetooth streaming. The 9 speaker output is beautifully balanced, crisp, and with plenty of balance in the bottom end.
Paddle shifts are standard and work well with the smart transmission, which has rev matching technology when it comes to the cog swaps. There are five drive modes which are activated via a dial near the gear selector. Custom, Comfort, Eco, Sport, Smart, are the choices and each change the colour of backlight in the driver’s dash LCD screen. They also bring up a graphic on the main 8.0 inch centre screen which show a layout of the car and highlights areas with different colours. Embedded in the sub-menus here is the option to change the steering and transmission between Comfort and Sports.
The rear seats are not excessively spacious in regards to leg room. Even with an average height driver the rear of the front seat is just a few inches from the squab of the rear seat, and they just don’t look as if there is real comfort for anyone of certain sizes. That’s due to a shortened wheelbase that, although it endows the G70 with great handling, then compromises for a proper 2+2 or 2+3. It also compromises boot space, with the BMW/M-B-esque end holding 330L. The spare is a space saver, not a full-sizer.
What About Safety? There’s nothing left out in real terms. A console mounted tab for 360 degree camera was fitted in the review car, and the actual feature is standard in the Ultimate. Forward Collision Avoidance with pedestrian alert is standard, as is Lane Keep Assist with steering assist. The actual assist is aggressive and overly so in how it works to keep a car in between the lines. Rear Cross Traffic and Blind Spot Alert are also standard, as are a full suite of airbags including driver’s knee.
On The Outside It’s: Low, slinky, full of sensual curves, and obvious who it’s looking to hunt down. It’s a long, long, bonnet on the 4,685mm G70, with lines and shapes that evoke BMW, Mercedes-Benz, and thanks to the badge, had a number of school yard car-spotters saying Aston Martin. It’s fair to say that the deep electric blue metallic paint is eye-catching, and on the school run had plenty of eyes on stalks swivelling to follow its progress. Even on the highway and residential roads the unfamiliar shape and badge had people stop or watching from inside their own car, eager to try and get a glimpse of the svelte lines. It’s a four coupe, almost, in profile, and the bootlid is a stubby, truncated affair with a built-in spoiler design. The grille on the Sport is a classy, black coated, diamond mesh design. On the front flanks is a chromed, boomerang shaped insert, and there is pressure relieving vents ahead and behind.
The tail lights are LED and there’s even a hint of Mustang in the three vertical stripes when lit. There are puddle lamps in the wing mirrors that shine the Genesis logo, and the headlights and indicators are high intensity bi-LED and full LED respectively.
Out On the Road It’s: Engaging. Wonderfully so. Dialing up any of the drive modes from another brings small but perceptible changes in the G70’s behaviour. In Sports mode for the steering it’s razor sharp, though process sharp in its reaction to steering wheel input, and adds a discernible heft to how it feels as it’s turned. Eco dulls the engine and transmission down to a smooth, slurry,easy going feel. Sport goes the other way, tightening up the responses for a crisper, sharper, experience.
But even Sport doesn’t completely dial out the unexpected. There is turbo lag, that gap between hitting the pedal and the engine lighting the candle. Once fired up via the push Start/Drop button, the motor settles into a ready for action mode. It’s sometimes too eager, like an energetic puppy, pulling at the transmission in its willingness to move. Get to a stop sign, the engine spins down. Go pedal pressed and there’s a hesitation as the electronics engage and the turbo finds boost once 2000rpm is seen on the tacho as the G70 gets underway.
On song, the 2.0L turbo pulls nicely in all driving areas. Having the eight speeds to choose from, along with the rev matching tech, means it’s hardly ever found wanting for response in throttle applications. Feather it into a twisting mountain road and the tacho blips and flickers as the engine and gearbox work side by side in keeping the revs where they need to be. Cruise on the highway and it’s inaudible. Plant the hoof and there’s a sharp intake of breath before a cog or two is swapped and it launches forward. In Sports mode there is a rumble fed through the audio system to add to the experience.
Ride quality is never anything less than very good. The taut rear end will skip around, the steering in Sports mode is razor sharp in its response time. The suspension is a delight. Its compliant to a fault, dealing with the usual lumps and bumps without issue, even dialling out the dreaded shopping centre speed reducers without qualm. Road noise on harsher tarmac from the 265/45/18 tyres was surprisingly intrusive. Smoother roads were much quieter. There are 18s on the entry level, black painted alloys on the Sports, and bespoke Ultimates in 19 inch diameters for the top level. the Sport has Michelin Pilot Sport 225/40/19s and stopping power comes from renowned brake company, Brembo. These are super effective, hauling up the G70 time after time with pin point precision thanks to one of the best calibrated brake pedals going.
And The Warranty Is: For five years. There is free servicing for those five years too, along with the Genesis ownership experience, and 24/7 roadside assist. There is also a free service for drop-off/pickup when booking the car in for service if the owner is inside a 70km circle of a Genesis Studio. In Sydney, currently there is only one and it’s in the city itself.
At The End Of the Drive.
There are a couple of things holding the Genesis up from making its mark in the Aussie automotive landscape. Chief amongst the list is the brand recognition. When Genesis launched with the 3.8L V6 version, it was seen with a small measure of respect, a larger measure of disdain, and quickly fell into the hands of hire-car companies. Only Hyundai can explain why. Right now, with a presence that’s still virtually invisible, the marketing team needs to get behind it and let people know it exists.
The next hump is the bias that Australians have when it comes to cars from Korea. Inexplicably, there is still a stigma attached to both brands, even with the superb quality and outright clout the cars have. Hyundai’s N class, for example, showcases real-world ability against class leaders like the Golf GTi. The Stinger has shown that a V6 powered rear wheel drive sedan has punch. The i30, the Highlander, the Santa Fe are plentiful on road, but still have that upturned nose and sniff of derision to cope with. And that’s unfair as Korea makes the best selling Samsung and LG TVs, phones, home appliances…
For a Genesis rebirth, there’s work to be done. Find out more, here.
Private Fleet Car Review: 2019 Hyundai iLoad Crew Van Liftback.
This Car Review Is About: a vehicle that doubles nicely as a passenger and commercial transport vehicle. The Hyundai iLoad is the cargo transport version of the dedicated passenger van called iMax. It comes with or without the passenger configuration. Or, if you will, the iMax is the passenger version of the iLoad…
What Does It Cost: At the time of writing, Hyundai were listing the iLoad Crew at just over $48K driveaway. That includes a five year warranty or 160,000 kilometres, free first service, and 12 months of roadside assist up front. There is a 15,000 kilometre/12 month service schedule.
Under The Bonnet Is: A 2.5L diesel and five speed auto for the iLoad Crew as tested. Peak torque is a whopping 441Nm however the PEAK figure is available through a very narrow rev band of 2,000 rpm through to 2,250rpm. There’s no lack of urge available under that 2,000rpm though. Economy is quoted as 8.8L per 100km for the combined cycle.
On The Inside It’s: A comfortable place to be. The two rows of cloth covered seats are separated from the 2,215L of cargo space by a fairly rigid barrier but was still prone to a squeak or two. The front seats are a 2+1 configuration, with the centre section featuring a folding backrest that doubles as a tray and cup holder. The driver has a one touch powered window for Down only, and for up it needs to be held. The windows in the sliding doors for the rear passengers are fold out and not that far either.
Instrumentation is basic but functional here. The driver has a fully analogue needle set of dials and a basic but again functional monochrome LCD screen in the centre. This shows trip, odometer, and expected range, but we didn’t see a litres per kilometre display though. Headlights have an Auto on switch, the tiller houses the basic audio and cruise controls, and the wiper controls on the left are just a fingertip away during the rainy season.
The dash console itself has a split level storage on the passenger side, a small nook in the centre for USB and 3.5mm auxiliary, a small pull out drawer lower down and a 12V socket.
The centre dash touchscreen is the same in that it’s basic to look at, works exactly as designed, and offers little in the way of fripperies. Audio is “old school” AM and FM, lacks DAB, but does have app access for Android Auto and Apple Carplay.
The cargo section came lined with protective sheeting and cargo tie-down hooks.
On The Outside It’s: received a mild facelift at the front compared to the original, slightly goggle-eyed, front. The headlights top line blends sweetly into the bottom of teh bonnet/top of the blacked-out grille. The rear is largely unchanged and there are no rear parking sensors.
The front brings the iLoad more into line with Kia’s Carnival with a more traditional passenger car and bonneted look. Headlights are more horizontally aligned and squared off, and this particular vehicle came with a nudge bar and super bright LED light bar. A tow bar was fitted at the rear. The rear gate isn’t powered but is easy enough to lift.
Wheels and rubber were steel (with the review car having black painted alloys actually, wrapped in Hankook tyres) and 215/70/16 in size for the standard set, plus the spare is a full sizer.
Out On The Road It’s: A very pleasant drive. 100kmh to 110kmh sees revs at just under 1800rpm to 2000rpm. The commercial vehicle style rubber didn’t cope excessively well with the damp and wet conditions experienced during the review period.
On a flat road they would break traction, and on an uphill oriented curve would spin rather easily and bring in the traction control. As a result, some of the driving had to be dialled down in one particular section of a mountainous and curvy road. Front end grip wasn’t confidence inspiring and the taut, cargo carrying, rear end would feel on the verge of breaking away.
The steering was responsive on the softer front end, with the merest twitch seeing the nose respond.
However, a quarter turn was needed to see any real broadening of the movement, and even at around 40kmh into a reasonably easy left or right hander, depending on direction of travel, would understeer and require a foot lift, a dab of the brakes, before hitting the go pedal.
Actual off the line response was wonderful, with virtually no discernable turbo lag from the torque 2.5L engine, meaning dry road hookup was swift and without fuss. There is manual shifting but the ‘box is good enough to not really need it. It’s also a little more sensitive than others in that the brake pedal had to be firmly held in order for the gear selector button to depress.
There was a real sense of refinement to the driveline too. A muted engine noise, super crisp changes in the five speed auto, and almost instant throttle response were dampened, at times, by the road noise from the tyres and body.
At The End Of The Drive.
Although it’s effectively a commercial vehicle that just happens to seat six, there’s just enough to make it a very enjoyable family car if the iMax is out of the budget range. Proper passenger tyres, usage of the smartphone apps, and perhaps some custom built container spaces for shopping in the rear, and there’s a people mover hiding in plain sight.
The engine and gearbox make for a great pairing, and it’s not thirsty by any measure. Check it out at the Hyundai website
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