I have the privileged opportunity to drive lots of different cars and for the first time ever, I feel like cars are getting worse. I have been in the car industry for over 20 years, and I am constantly surprised by how car manufacturers can continually improve car features and comfort. I have also taken for granted how much safer a modern car has become, however in the past couple of years safety technology advances are no longer passive – new ‘improvements’ are intrusive.

Australia’s safety rating organisation is ANCAP which is responsible for setting safety requirements and in addition to testing cars against that standard – the rating that all manufacturers aim for is 5-star and the buying public has been educated to believe that anything less than 5-star is unsafe. In fact, government departments, fleets, rentals and ride-share insist on it.

But what does it take to launch a car today rated as 5-star?

From 2023, an increased weighting is attributed to active safety features such as driver monitoring, lane keep assistance, and collision avoidance – cars I drove prior to 2023 would have these features but would nudge you by vibrating the steering wheel or beeping. But now, new cars are taking over the controls and I would argue making driving less safe. Here are my latest experiences:

-          Almost daily, on a two-lane road I am confronted with a car parked in the left lane where there is enough room to merge into the next lane to get around it. Obviously, I look into my blind spot and in addition to blind spot monitoring, I am confident that there is no car in the lane beside me. However, the emergency lane keeping resists my steering intention and forcibly steers me back into the centre of the left lane. The problem is, that there is a car in my lane I am trying to avoid.

-          While reversing my car out of a shady car park, the cross-traffic alert suddenly slams on the brakes and beeps like I am on life support and I am about to depart. The problem is, there is no car coming and now the car refuses to budge.

- While driving on an undulating open country road, my car suddenly slammed on the brakes because it sensed an object on the road in front of me. The problem is, there is nothing there and my wife is now questioning whether I am losing my mind.

These issues are not exclusive to one brand, I have experienced all these issues in newly released Chinese, Japanese, and Korean-made cars and I have had friends and family complain about the same in European cars as well. 

OEMs are stuffing these features into new cars so they can get the required 5-star rating, and now it is stuffing up my confidence in a new car to keep me safe.  

This week, the Albanese government announced that from the 1st of January 2025, car manufacturers will need to have an average CO2 output 60% below the current average by the end of the decade. This threshold average will apply across the total model lineup of a car importer.  

Chris Bowen the Climate Change Minister says that Australian drivers will save $1000 a year in fuel and that ICE vehicles will not go up in price. I disagree.

While the policy makes sense and is likely to reduce the CO2 emissions of new cars sold in Australia, it is wrong to say there won’t be any impact on Australian consumers. Of course, there will be, that is the point - isn’t it?  

Take, for example, Toyota. Australia’s largest seller of cars and in most years sells one-quarter of all cars sold in this country. They have a vehicle in almost every model segment and are hugely influential in the market. Their Landcruisers and Hilux Utes dominate the 4WD and commercial market and are currently powered by diesel and are likely well above the CO2 threshold that the government will set. Once the legislation comes into force, the popularity of these models is likely to put pressure on Toyota’s total average CO2 output.

Toyota being a rational business will likely try to dampen the demand for these higher polluting cars by increasing the price and hence their gross margin. They will then use this increased margin to subsidise their hybrids and EVs to increase their volume and hence lower their average CO2 output to avoid the government-mandated fines. As a diversified OEM, Toyota has the ability to play with its sold model mix to ultimately sell more cars by using internal methods.

For those brands that aren’t diversified and sell mostly ICE models above the threshold, then their only option will be to trade their liability with another OEM that mostly sells EVs to avoid the fines. The effect on the price of ICE is the same, the internal cost to sell an ICE car will go up and the cost to sell an EV will go down.

The reality is, that despite the environmental rationale to buy an EV that there might be, there is still consumers who want and need an ICE vehicle. These cars will still be popular and will certainly go up in price. In fact, EVs are generally still more expensive to produce and therefore all cars on average will be more expensive.

This will inevitably lead to increased prices for used cars as the affordability of new cars reduces. This dynamic always pushes consumers towards more affordable used cars, which were originally sold before the legislation. Therefore, the price of used cars will generally go up leading up to and after the 1st of January 2025. This pressure will be particularly evident in large 4WD and Utes.      

If you disagree, please comment on LinkedIn

We recently launched our beta version of our Invoice Log, where car dealers can store and manage their accounts payable invoices (but more on this later). But it got us thinking, why isn’t a centralised database for bank accounts linked to Australian Business Numbers?

An increasing method of fraud used by criminals and hackers is to simply change the BSB and account number on an invoice. Known as Invoice fraud, according to the ACCC cost Australian businesses over $227 million in 2021.

This can be achieved by hacking into the email program, intercepting emails or can simply be achieved by emailing a business with a fake invoice and assuming a business doesn’t have a robust process of approving invoices (also more on this later).

A client dealership recently received an email where the supplier claimed that their bank account had recently changed and that this ‘urgent’ payment was required before they could release the equipment. One call to the supplier proved that the email was fake. But considering the supplier’s email had been hacked, everything about this email looked legitimate.

Whenever your dealership receives an email relating to bank account details and changes, your accounts department should always validate this with a phone call, however, a more robust national system to check bank account details would make the job of hackers substantially harder. 

The drivible invoice log would be more beneficial for dealers if an API existed to check bank account details for Australian businesses against their ABN. This could be an opportunity for an Australian start-up, however, the natural provider of this service should be the Australian government through the ATO or ASIC. It is already a requirement for Australian businesses to register and keep their details up-to-date. It would also be in their business interest to register their bank account details with the registrar. 

Australian businesses could manually check an ABN on the register to validate bank details and tech businesses such as drivible could utilise an API to make their clients more efficient and safer.

Invoice Log

We recently launched an early version of our invoice log, which allows dealers to save their suppler invoices digitally in the cloud. Suppliers can send invoices directly to the dealers document storage via a unique email address and dealers can manage approvals with a robust and auditable approval process. Early tests show that a dealer accounts payable department is substantially enhanced and more productive.

We have many more features to come, such as alerting dealers to changes in bank account details. But a national bank account register would be beneficial to all businesses.  

February has been a huge month for the drivible platform with some key features being introduced to our dealer clients.

Dealers now have the functionality to electronically store their payable invoices in the cloud and when combined with our OCR and machine learning capabilities, documents can be found in seconds. Documents can be manually uploaded or via our unique email technology where your users or even suppliers can directly upload invoices directly into your document storage – no need to print and scan – saving your employees, time and your business, paper.

Once reviewed, your accounts payable team can automatically forward invoices to managers or employees for electronic approval and this process is audited to ensure compliance.  

We have also switched on service ratings, where your clients can be sent an SMS and email for a quick survey after service. This easy two question survey is the ideal way to check the pulse of your dealership. Clients are also encouraged to review your dealership on Google and Facebook and you can even compare your dealership to thousands of dealerships across Australia! So if you are a dealer that takes your customer service seriously and you have a competitive streak, you will keenly be checking the drivible platform everyday.  

Stay tuned for some exciting updates over the coming months including the ability to bulk upload all your days repair order in a single scan!

It is the mission of every service department to ensure that every car that leaves the service department is safe and in sound working order. But what if your clients expose your dealership and more importantly your service technicians to a huge risk of fines or even worse?

On July 2011, the South Australian government removed registration stickers and other states soon followed. Now, all Australian states have replaced registration stickers with websites and apps so that drivers can check the registration status of a car.

This solution has proven adequate for owners and occasional drivers, but what if your business drives hundreds of unknown cars a day – for example a dealership service department. Unlike many other responsibilities, driving a vehicle that is unregistered is the responsibility of both the owner AND the driver, which means that your technicians could be issued a fine while conducting a Road Test. Even more concerning, the dealership would be fully liable for third-party damages and injuries in the event of a severe crash.  

Many dealers have recognised this grave risk and require employees to do a daily task of checking all the service vehicles with the solution provided by the government. Checking individually, is a laborious and inefficient task but with the risks involved - essential.

We have just developed a solution that batch-checks all your service repair orders with the data at the state registering authority. Once data is uploaded into the drivible, our solution checks all service vehicles which takes seconds versus the hours that large dealerships are doing each day. Saving 10’s thousands of dollars each year. In addition to reducing the risk of a catastrophic fine or payout in the future.

We have just completed the rollout of the South Australian Rego check. If you would like us to develop a solution for your state, then please contact us at hello@drivible.com.au

We used ChatGPT to create our 2022 yearly review.

“Dear valued Drivible users,

We are excited to announce several new updates to our platform! Firstly, we have just launched the ability to search for any word within your documents, making it easier than ever to find exactly what you're looking for.

In addition, we have developed the ability to send payment requests for deal deposits, service invoices, and parts invoices directly through our platform. This feature will streamline the payment process for our car dealership partners and make it more convenient for you.

We are also pleased to announce that we have recently onboarded some big dealers and we are looking forward to partnering with them in 2023.

Looking ahead to next year, we have several exciting new features in the works. South Australian dealers will soon have the ability to batch check registration expiry dates, and our [your] accounts department will have the ability to save accounts payable invoices. We will also be introducing electronic signatures and launching a new user interface that centers all of your data around your clients, much like a CRM.

We would also like to take a moment to recognize and thank our hardworking development team for their contributions this year. Their dedication and efforts have been instrumental in bringing these updates to fruition, and we are grateful for their commitment to improving Drivible for our users.

Thank you for choosing Drivible for your document and data storage needs. We are constantly working to improve our platform and bring you new and useful features.

Sincerely, The Drivible Team”

What is ChatGPT?

“As a large language model trained by OpenAI, I am able to understand and generate human-like text, which makes me well-suited for tasks such as answering questions, providing information, and assisting with language-related tasks. I can provide quick and accurate responses to a wide range of questions and topics, and I am able to generate text that is coherent and flows naturally.

In addition, I am available 24/7, which means I can assist you at any time of day or night. Whether you need help with a specific question, some general guidance, or assistance with a language-related task, I am here to help. So, if you have any questions or need assistance with something, please don't hesitate to ask. I'll do my best to help you.”

The above was also generated with ChatGPT - www.openai.com

From today, it is now possible for a dealer or dealer employee to search for a document in their dealership as though they had the power of Google within their dealership.

But how does it work?

Unlike many other options, drivible doesn’t require specialised scanners or bespoke solutions. Each dealer is issued unique drivible email addresses for their documents which are ideally pre-programmed into your network scanners. Therefore, your users simply have to press the pre-programmed email address and send your document to the drivible end-points.

Once retrieved, we use Optical Character Recognition (OCR) to read all the text and handwritten notes on your document and then pass those words into our Machine Learning models, which utilises Native Language Processing to label your data.

In addition, we then parse all the text from the OCR, and then combined with the labeled data we create a unique search index in an Apache Lucene search engine. This allows our users to search and find any word, within 100,000’s documents within a second.      

Why is this important?

Physical documents, such as Repair Orders and Deal Packs take up an enormous amount of space at dealerships, located on land that is increasingly expensive and uneconomic. In addition, when a document is needed it often wastes many hours of employee’s time.

Some other document storage solutions, require an employee to manually label or stamp documents, however, drivible requires a minimum amount of employee effort as all the labeling and search functionality is automated.

Incorporating a Native Langauge search, also allows users to find documents and ask questions that are more intuitive to their normal way of working. For example, instead of trying to find a service repair order via the RO number (which must be known beforehand), a user can simply search via the prompt - “joe bloggs invoice” and can also refine their search by including “joes” car model or colour - “blue Crv”.

Currently, dealers can trial our document storage solution for 30 days and with the benefit of our cloud solution only pay $25 per user.

drivible will be at the 2023 NADA conference in Dallas, Texas between the 26th and 29th of January. It’s going to be great to experience all the new and exciting technology available for the modern car dealer. To book a personalised demo of the drivible platform, please email us at hello@drivible.com.au

Drivible recently launched our network prices feature where we collate the sales transaction data across all our participating dealers to get a rare insight into the actual sales transactions happening at dealerships across Australia.

Unique to drivible, we can collate actual sales transactions at a retail level and give our dealers unprecedented insight into the car market. Recently, we have been studying the inflation effects on the car market in Australia which has been caused by an undersupply of new vehicles and strong demand.

One example is a used Mitsubishi ASX XC LS MY17 2WD which recently sold at one of our dealer partners for $21,695. This vehicle model sold with 99,441 km’s on the odometer and an identical model about 2 years ago sold for $20,980 with only 28,915 km’s.

Hypothetically, you could have bought this car and travelled over 70,000 km’s and in two years made a profit of $715. When adjusted for kilometres travelled, an ASX LS MY 17 has increased over 3x.   

The bad news is this trend doesn’t look like reversing for some time, the good news is you might already own an ASX.

It ‘s free to access network prices on the drivible platform. Contact us to find out more.

View fullsize

network prices are obtained from our participating dealers across Australia. drivible prices exclude on road costs

My wife and I recently had a baby boy and after getting over the realisation that we now have 3 children to keep alive, we set out on the expected chore of registering his birth. My expectation was that dealing with a government department was going to be a painful ordeal – but in reality, it was an efficient delight.

The hospital gave us a handout – which explained that birth certificates are now issued completely online. My expectation was that we would fill in a glorified form, we would then print, scan and send in the mail. But to my surprise after entering in both mum and dads details we were sent a text message and we simply had to reply with ‘Yes’. A week later his birth certificate was in the mail. 

We literally created the most important document in a person’s life - Medicare, passports, tax file numbers, driver’s licences can’t be obtained without a birth certificate and we did it with a simple ‘Yes’. Yet, relatively mundane agreements like borrowing a car or receiving a parcel needs a scribble on a piece of paper or screen.  

A reply via a mobile phone at least guarantees that the holder of the phone agreed to a contract at a precise time and that they at least gained access through the phone’s security – which a signature scribble can’t provide. In more serious matters, a court order could also obtain the location of the phone user.

If a text message is good enough to create a legal human, then I believe a text message should be good enough for most commitments we make in society. The important aspect of a contract between parties is that they all know they have made a legally binding commitment – people have been conditioned to accept that the act of writing their signature is important – the challenge is to replicate this with an SMS reply.

For a while now, test drive and loans cars on drivible are agreed to via an SMS reply and in a few months, drivible will make it possible to agree to buy a car via text message. Not as important as having a baby, but still important.   

Dealers are increasingly focused on expense reduction and it is obvious that document storage and document scanning is a great place to start, but may not have considered that proper implementation requires some process and cultural changes.

You’re investing in the future.

Many people place more emphasis on their current time, rather than time saved in the future. Other than the space saved due to digitisation of documents, the main efficiency gained from document storage is the speed to search and find a required document in the future.

With a good document digitisation solution with OCR and advanced search capabilities, the speed to find a document is well understood. But what a dealer and their employees need to recognise is that some time and efficiency is sacrificed upfront which is expected to yield a more productive business in the future.  

It is difficult however, for employees to understand that an added task such as scanning documents is worth it – the key is to make it as easy as possible with slick processes.

Staples are the devil.

There is no room for staples in a workplace that intends to scan documents, they simply take too much time to remove and often tear the corners of documents which often creates paper jams. Staples can easily be replaced with removable and reusable clips or plastic sleaves.

Keep scribbles to minimum.

The main attraction for dealers using a document storage solution is the ability to capture notes which are often written by admin staff or technicians. However, advanced document solutions employ OCR and may also use machine learning which may be affected by notes and scribbles. For example, employees might highlight a mobile phone number by circling the contact details, but if that circle obscure’s part to the text, then the ability to search via that number is lost.   

Invest in a good scanner.

For the typical dealership, the quality of a document scan does not have to be photo quality – however some OEM’s may require technician notes on warranty claims to have specific colour pen for example – so this must be considered. The scan should be legible – especially if you are using a solution that uses OCR. 

The greatest consideration should be on pages per minute and the number of sheets the tray can handle. The scanner you purchase should maximise the speed (ppm), ideally 80ppm or greater and you should spend as much money as your business can afford – as time saved in this area is valuable.

Process, process, process.

It is not economical to employ the resources of an employee to solely scan the whole days documents at once, therefore the scanning of documents must be incorporated into your departments task flow. For example in the service department, it is important to have the service advisor or costing clerk place the repair order in a scanner directly after finalisation. If you have purchased a good scanner, then all the settings can be defaulted and documents are scanned while the user is processing another task - such as costing the RO.  

Is your head in the clouds?

Your document archive is your last line of data storage – for most dealerships, the DMS is the source of truth of the dealerships data – and still most DMS are hosted on-premise. It is a key risk to also store your archived documents at the same premises as your database. Therefore, it is essential risk management that you choose a solution that is cloud based.                                                                          

Document storage is one of the best long-term investments you can make in your dealership – but it is important that you consider the process changes and solutions that are needed to maximise success.

It is generally the case that over time, a competitive industry gradually improves their processes and input costs to become more productive and efficient – but that has not occurred in the car retailing space.

At drivible, we have spent some time going through the Key Performance Indicators from 2001 and we have found little to no change in the key figures that drive dealer productivity and profitability. As a great comparison, the key indicators that were important to dealers 20 years ago are also considered important today. Most of these KPI’s are measured as output per employee in both a physical measurement or financial comparison. To remove the effect of inflation, we have focused on the physical output of a dealership employee – for example cars sold per salesperson and made use of the industry definition of a benchmark figure – the top 30% of dealers.

In 2001, the best dealers in Australia had a new car sales output of 11 cars per head. This figure has consistently included the sales manager and aftermarket salesperson and today that same measurement is now 12 (a puny increase of 1). The same comparison in used cars has only slightly bettered from 10 to 12 over 20 years. Notwithstanding the current improvement in gross profits caused by stock shortages, this mediocre increase in productivity is not sufficient to alleviate the narrow margins and increased wages in the sales department. The increased use of technology in the top 30% dealers have failed to improve their productivity.

It is a similar story in finance penetration, parts per invoice and RO’s per advisor all have stagnated or improved little. Certainly not enough to outweigh the increased costs and wages that dealers have experienced over the past 20 years.

It is even more concerning when looking at the key workshop productivity metric of chargeable to non-chargeable. In a nutshell, this indicator looks at the productive personnel (workshop technicians) in a service department versus the support staff that are needed to allow them to work on cars. In 20 years, this has dramatically worsened from 1.6 technicians per support staff to 1.1. All else being equal, 45% increase in support staff – with little increase in technician productivity (95%).

Remember, these are the metrics of the best dealers in Australia. What is happening to the typical dealer?

Thankfully, dealers have been in the fortunate position that they have been able to increase their labour rates to compensate for this stagnant productivity (like many other service businesses) – however with capped price service programs now entrenched in the industry – this is highly reliant on the OEM’s.

So why is this happening?       

Like a hairdresser or teacher, most of the front-line employees in a dealership are required to spend more quality time with customers and this is very difficult to scale into more clients per employee and while the use of technology has accelerated, this is primarily from lead generation volume rather than efficient sale fulfilment. This form of customer interaction is very labour intensive and without a dramatic shift in the way people buy cars, it is difficult to see the necessary improvement in sales productivity.  

The other concern is that recent technology solutions provided to car dealers have mostly focused on existing processes and incremental improvements in lead generation, rather than quickly and efficiently processing clients through the sales and service funnels – while also providing a more satisfying experience for their client.    

November updates bring one awesome productivity update and a new feature to the drivible platform.

Surveys

All dealers know of the importance of getting constant feedback from their clients, however they must also balance the requirement of not unnecessarily pestering them with constant survey requests. That is why we have created drivible surveys which quickly and casually asks dealership clients for their opinions during key milestones. 

Drivible automatically uses SMS after test drives and delivery to garner a short response from the client regarding their opinion on their recent experience. In addition, the client also has the option of sharing their experience directly to the dealers facebook and google pages which will inevitably increase social media reviews and SEO for the dealer.

All reviews are collated into the drivible CRM platform and are referenced against the client file, so a history and story can be formed over time.

Notes:

• All dealerships are automatically included in surveys unless it is switched off. This can be done from the dealership settings, by un-selecting ‘Test Drive Survey enabled’ and the same for deliveries.

• You also have the ability to add your Facebook Page review URL location and your Google Place ID. Unlike the facebook link, the Google link is created automatically but it should be checked by you to ensure it is correct. Only if a URL exists, will a client be prompted to visit your social pages.

• Average ratings are listed against the client in the main screen. You can also look at the survey detail by expanding the client screen.  

Scan to email – delivery docs

One of the frustrations with many document storage solutions is the need to have specialised scanning equipment, which is used to reference and categorise dealer documents. This can make adoption in the dealership slow and can also lead to huge upfront costs.

But with the power of machine learning, a model can be trained to learn fields and categories across many different dealership documents. In addition, most dealerships have scanners capable of directly sending a scanned document via email so drivible has combined these two technologies into the perfect dealership solution.

Starting with delivery docs (deal packs), a dealership administration can now scan directly from the scanner via email and directly into the drivible deal Log. All data is automatically extracted and categorised based on our machine learning models. Therefore, you can be up and running on the drivible document storage solution within minutes and there is no need to buy expensive and dedicated scanning equipment.

Notes:

• This feature will need to be enabled to work correctly.

• Your unique email address can be found by visiting the Deal Log and clicking on ‘Delivery Email’. Deal packs can be sent to this unique email address.

• This email can be programmed into your office scanner and all deal packs sent to this email will be logged into your Deal Log automatically due to the wonderful magic of machine learning.

• All files sent to this address will be labelled as Status = Delivered. So don’t send deals to this address that haven’t been delivered.

What else?

• We have suspended accompanied tracking due to limited use. Users now have the ability to manually ‘Finish’ an accompanied test drive via a link sent to the users mobile phone.

• The ‘Finish’ button is also now added to the main Test Drive Log screen for easy management of test drives,  

We don’t stop

In addition to the exciting features above, we have also added paper test drive forms, default user departments and upgraded our server platform for an even quicker user experience. 

Stay tuned, because our next update will be our biggest one ever! – Service docs & Invoice Payments.

In almost everyway you look at it. The public float of Rivian (an electric vehicle startup currently focusing on recreational vehicles) was monumental, ground breaking and head-scratching. The startup floated at $US78 per share and within days reached $US179, which equals a market cap of $US183 billion, which is more than Ford ($US79 billion) which owns 12% of Rivian and produces 10000000000% more cars, revenue and profit (Rivian has not delivered any cars, booked any revenue and will not have a profit for the foreseeable future).

As an aside – the market is saying that $22 billion of Fords market cap (or a quarter of their total) is because of their 12% ownership of Rivian. (doesn’t make sense).

But obviously, the stock market isn’t just about a moment in financial time. The price of a share of a company is based on the expectation of future returns. Therefore, the public consensus is that Rivian is going to be bigger and have greater cashflows than Ford in the future (when, nobody knows).

The Tesla market cap is even more extraordinary. Currently, Tesla has a market cap of $US1.15 trillion, which is greater than the next 9 automakers combined. In this instance, the market is expecting Telsa to one day be the ‘Apple’ of cars, where they capture the majority of marketshare and profits generated in the industry. This is possible – but not guaranteed.

The new EV entrants have gained the attention of the legacy car makers and they are collectively out spending Tesla & Rivian by a massive margin on EV motor, battery and autonomous technology. Traditionally, the car industry has been dominated by the companies that spend a greater share on investment and R&D in the technologies that end up being the future. But the current outspending may not last.

With such an extraordinary market cap, Tesla can easily raise a lazy $100 billion for a new project or ‘Elon’ vision and only have a mild dilutionary effect on their shareholders. In addition, this cost of capital would almost be free, which is an advantage that the other car makers simply don’t have. In addition, Tesla has no debt and a financial crisis or rate rises would have a huge effect on the indebted legacy brands, which would be forced to cut R&D spending to shore up cash.

VW have recently tried to remarket their company image as one that would be the worlds largest EV brand – the speculation they are trying to gather some of the magic dust that Tesla, Rivian and Polestar can capture. But so far it has little effect on their market cap of $US137 billion.

The legacy car makers have the factories, supply chains, knowledge, distribution – but Tesla and the other start ups have a story – and in this environment they are getting free money in return.

Every dealer knows that the business manager is one of the most important positions within a sales team, not only because of their ability to generate significant income but also as a link between the sale of the vehicle and other important areas such as aftermarket and pre-delivery.

To be as effective as possible, a business manager is best placed if they are intimately involved in the sale of vehicles and imbedded into the showroom processes. An important trend over the past decade has been for savvy dealerships to get their business manager introduced to the prospective client as early in the sales process as possible. Once such technique is to have the business manager process test drives, this is especially handy if there is a trade-in involved.

When processing the test drive, business managers have an informal opportunity to ask qualified questions relating to the financing and insurance of their current vehicle, encumbrance queries, invoice requirements and finance options with their prospective car. In addition, if the client does progress with the sale, the client is likely to be much more comfortable and open to personal questions when sensitive finance related questions need answering.    

However, dealer test drive applications are making this more and more difficult as they are often designed specifically for salesperson tracking and require the user to be the assigned salesperson.

That is why drivible has endeavoured to be as flexible as possible around many dealers’ sales processes and road to sale.

The first feature of drivible that allows this is the ability for a specific user (Business Manager) to assign the client or test drive to another user (Salesperson). The client accepts the terms and conditions on their own smartphone (not the salesperson) so anyone in the dealership can process the test drive.

While the business manager is best placed to process the test drive and explain the terms and conditions, they are not the best resource to have accompanying the client on the test drive. With many test drive applications, this is not possible because the application forces the user to track the test drive through a native smart phone application. Some vendors, encourage the salesperson to hand over their personal device to the business manager for processing, but this ignores that someone’s phone is often a personal possession of the user and this recommendation rarely is acted upon. The drivible test drive application works on any browser both on PC’s and smartphones and doesn’t require the user to use their own personal device.  

The second feature that encourages the business manager as the focal point, is the ability to upload a dealerships existing test drive form into drivible for cataloguing, search and reports. Many dealers have been using physical test drive forms forever and in many cases there isn’t any need to ditch them for a restricted test drive application. With drivible, there is no reason why your business manager can’t continue processing the test drive forms and they simply upload them securely for all the dealership reporting.

And finally, the third feature is the ability to automatically track if the business manager has had contact or an introduction to the prospective client. In drivible, the business manager has a special login which records every time they view, edit or process a client in the system. This then is used in many reports which can represent which clients are being seen and introduced to the business manager. Many other CRM applications, require a physical box ticking by the business manager, whereas in drivible it is automated.

Drivible is the only test drive application and CRM that encourages finance performance.

It is one of the most common questions of anyone looking to buy a car at the moment.

In the last 12 months there has been a 34% increase in used car prices and a 5 - 20% increase in new (depending on the segment).

Like the complexities of cars themselves the reasons are many and varied, we will try and go through them all here.

Safety Tech, 5 star safety ratings & 5 year warranties

In 2019, ANCAP advised OEMs that in order to qualify for the maximum 5 star rating then they would need to fit advanced collision avoidance technologies. In addition, consumers were also demanding these technologies along with motor industry journalists. Therefore, the OEMS felt they had no choice but to make these technologies standard across their model range -sounds good, right?

Well, these complex options are very expensive and can add anywhere between $1000 & $2000 to the cost of production. As the whole industry made the decision in lockstep it almost guaranteed an increase in vehicle prices.

Around the same time, the ACCC was also investigating several car brands for their consumer guarantees and their failures as per the ACL. It was determined by the ACCC that failures even outside a warranty period would still be liable to OEMS, where consequently many made the decision to increase their warranties to 5 years. Once a few OEM’s shifted their warranties, the rest followed – also sounds good, right?

Well, these coverages cost a lot of money and they had to increase their provisions for future claims, resulting a provision against the vehicles sold which eventually must be recouped by increases in car prices.    

Decreasing Car Parc

Prior to Covid, the Australian car industry sales (as reported by VFACTS) were down for almost 3 years, the longest downward trend since the finance crisis. Every year, around 800,000 vehicles are deregistered due to being written off or mechanical failure, and therefore unless a large number of new cars enter the market each year then the Australian car parc ages. In fact, since 2016 the average car age in Australia has increased from 9.8 to 10.4 years.  

When you also consider that the Australian population has increased from 24.3m to 25.7 million over the same time, then there has been a shortfall in the number of new vehicles coming into Australia.

TAKATA

The Takata airbag recall was the biggest recall in automotive history, with 100m airbags needing to be replaced worldwide. In Australia the number of affected airbags was 4 million. Towards the end of the recall (end of 2019) a number of vehicles were identified with another type of inflator issue and were categorised as alpha. The vehicle manufacturers calculated that it was cheaper to destroy the affected vehicles rather than engineer a new airbag replacement.

So in 2019 and early 2020 a total of 78,000 vehicles with these defective airbags were purchased from their owners and crushed, an unprecedented number of vehicles were taken off Australian roads just before the biggest supply constraint in Automotive history – COVID-19.  

COVID-19

As has been explained above, leading into the Covid-19 crisis the automotive industry was primed with huge cost increases, however huge factory outputs were keeping a lid on prices as OEMS struggled to find demand for their huge factory production. Some brands were starting to close factories and looking at ways to make their businesses more sustainable. But then along came Covid.

The initial reaction by many manufacturers was to dramatically cut production and cut costs. This involved a huge drop in inventories and orders and at first this seemed like the correct course as people stayed home and kilometres travelled reduced dramatically.

However, there were other outcomes from Covid; a drop in public transport, increase in local tourism, reduced interest rates and huge amount of stimulus resulted in only a temporary fall in vehicle sales and many OEMS were caught short of stock.

Many dealers went from massively oversupplied too massively under supplied within months.

CHIPS & PARTS

The headline at the moment is that the cause of vehicle shortages is the huge shortage of semi-conductors. The story goes that OEMS cut orders at the same time that electronics companies increased orders in order to fulfil demand for lock downed consumers. In addition over the past 3 years, car models have had an increased number of micro-chips because of infotainment and safety tech features. In addition, hybrids and EV’s have also increased in popularity which typically have 10x more semi-conductors. The specialist chip makers that supply car companies had no chance in keeping up.

So what is the future of car prices?

All these factors have led to a permanent base cost increase for all manufacturers and we can’t see new cars decreasing in price. Like safety tech before it, the mandating of EV’s in many dominant overseas markets will permanently increase the cost of cars and OEMS will be recouping the massive R&D spend for years to come.

Unfortunately, the price increases in new vehicles and likely supply constraints will likely last 12 -24 months. Cheaper alternatives (used cars) will only keep demand high and therefore used vehicles are unlikely to fall.

A growing business is often a time for celebration, however a major impact of a growing client base is often a deterioration in the quality of your client database. Over time, names are misspelt, addresses are not updated and email addresses and mobile phone numbers are often mistyped into your CRM or DMS.

Mistakes will happen and that’s why your CRM should validate a client before they leave your dealership. With drivible, test drives and loan vehicles are initiated through the clients mobile phone giving your business 100% verification that the number provided to your employee is correct.

We find that users incorrectly record a clients mobile number in 3% of interactions, for a large dealership this could amount to 300 incorrect details. There have also been circumstances where a dishonest visitor will deliberately give your employee incorrect contact details to steal a loan car. Drivible’s mobile validation will make sure that the phone number provided to you is at least the phone they have on them.

Emails are the most common mistyped client detail, often because of a misspelling or formatting issues. Some CRM applications, check the formatting of the email address to ensure that the structure is common - for example with an (@) and a (.). However, this logic doesn’t ensure that the email address entered is correct.

Drivible automatically ‘pings’ the server of the address provided to verify that the email address exists before allowing the user to save and continue. Giving your employee the opportunity to correct or confirm with the client.

These two simple, but effective features of drivible mean that you will always have accurate contact details for your clients.

Contact us for a free account to test drive for yourself

For many outside the industry, it is hard to understand why during a pandemic and acute vehicle shortage, could the typical dealership be so profitable.

Eagers Recent Profit  

But only a dealer insider understands that historically a vehicle margin is very slim, intensely competitive and how much sales target pressure a typical dealership is subject to. All these factors lead to a situation where a dealer is likely to lose a significant amount of money selling new vehicles and then depend on used vehicle department, finance, service and parts to recoup losses and then make a meagre profit.

However, with the semi-conductor shortage leading to unprecedented shortage of vehicle supply, the sales margin of most dealers have doubled – dealers are simply unwilling to discount vehicles that are near impossible to replace. Which means that many dealers are currently making a profit selling cars and are utilising the other departments to make healthy record profits.   

But this won’t last.

It could be 6, 12 or 18 months, but eventually the factories will wind back up and once again dealers will be under pressure to meet aggressive sales targets and to take on large inventories. This scenario will result in sales margins close to the historical small amounts. However, the last two years have also seen a huge pressure on expenses and employee shortages have also pushed up wages, which have lately been covered by increased margins.

Dealerships (like many other employee heavy industries) have had stagnant productivity for the past 3 decades and will eventually need to address this. Based on KPIs’; sales per salesperson, RO’s per advisor, technician efficiency, vehicles sold per sqm and deals per admin head, there has been little (if no) improvement and technology seems like the only option to improve dealership profitability long-term.   

The solutions that are needed to improve the sustainability of dealers must include; online car sales that require less salesperson resources, improved advisor/service client handover and more efficient admin processes.

Dealers probably only have a few years to get it sorted before lower margins will harm their business substantially.

The car researching experience has changed a lot over the years, from marketplaces such as carsales.com.au to professional review sites such as caradvice.com.au. But neither of these services have changed the way consumers transact a new or used car.

The closest contender has been the colossus carsales.com.au, who today dominates the market for used car classifieds where buyers and sellers are efficiently brought together. Being a classic case of a network affect, means that carsales.com.au position is unlikely to change anytime soon. But considering this privileged position and technical knowhow, why hasn’t carsales.com.au become the place that consumers transact online? - rather than just a glorified classifieds site.

When observing the successful companies who have pioneered online sales for their product categories – think Warby Parker (Glasses), casper (beds), Zappos (Shoes), Wayfair (Homewares), Tesla (new cars) and Amazon (everything else). They all have overcome most of the following:

Control & Branding

While Amazon has proven that you can dominate retail transactions by selling other products, many successful e-commerce pioneers have concentrated on the product first and let their customer experience do the promotion of their offering. By giving consumers an exceptional and unique experience, the power of word-of-mouth has propelled these brands to success and by controlling the brand, have given consumers no choice but to transact via their online store.

Therefore, it would be very difficult for carsales.com.au to control the transaction as they would be relying on private sellers, dealers and car brands to relinquish control of their products and customer experience to a third-party.

Thus far, no established car brands have successfully pivoted from a traditional ‘dealer’ model to an online model. However, they do have the advantage of control and branding to make a success of online sales.

Pricing   

For many consumers, the issue holding back any online transaction is ‘am I paying a good price?’. Amazon fixed this issue by obliterating away their competition so a buyer has little doubt on whether they could have got a cheaper price elsewhere. For other brands, controlling the product and retail options available has enabled them to give their customers certainty and transparency on pricing. Tesla solved this issue by selling direct to customers and thereby giving their clients certainty on pricing.

To date, cars are transacted at wildly different values. A used car buyer could search sellers on carsales.com.au to see the listed prices, but the inconsistency of quality and the transaction price is often very different to the advertised price. With new cars, transaction prices can sometimes vary by $1000’s difference to RRP and consumers have no choice but to visit a dealer and find their best price.  

Because of this need to search for their best price, consumers are unlikely to embrace online sales under the traditional dealer model. Recently, Honda and Mercedes have or will soon be operating a ‘Agency model’, where they can fix prices across their networks and it is possible that these brands become pioneers in online car sales. However, they will need to find solutions to the following;

Reviews

While car brands and models are extensively written about and published online, the source of consumer information on cars has not changed much in the past 50 years. Essentially journalists, who have access to a car for a few days typically on a junket in the south of France do some power slides and report back on the ‘lack of power’. But the needs and wants of a motoring journalist are often widely different to the average consumer.

Successful marketplaces have often recognised this and placed importance on capturing real reviews from owners and users of a product who can often report on fundamental features of the products sold on their marketplace. The resource of trusted and relevant reviews are often the catalyst that propels online sales and help a category get online traction.

Car brands will find this difficult, reviews on many controlled sites are often poorly contributed to and are often seen cynically by the consumer. The best review resources must be seen as an impartial forum for consumers.

Currently, there is no trusted and substantial review resource for cars.   

Touch and Feel

Even if a resource is created to host verified reviews of cars by owners, it is a fact of life that everybody is different. With such an important purchase, most buyers want to see how the car accelerates, how comfy are the seats, how direct the steering is, what is the smell? And that is why successful online categories have returns.   

Returns

The last, and perhaps most crucial aspect of an online sale traction is the ability (or option) to return a product if it doesn’t meet expectations. Before returns were the standard, shoes and clothing sales online were a rarity where feel and fit are crucial. With the introduction of returns, customers could feel comfortable that they could return an item just because ‘it didn’t feel right’.

In the used vehicle space, returns are increasingly being used by retailers to promote their online sales and drive the popularity of fixed price used cars. In most states, registration and stamp duty is easily reversed in a reasonably short period of time. However, new vehicles face a significant hurdle by having heavy depreciation in the first months, small margins and the expectation that a new car should have very low kilometres at delivery.

So, why aren’t cars sold on the internet? If we can solve these 5 challenges, there is no reason why a car can’t.        

Dealerships send a mountain of marketing and correspondence to their client base, but often it is mistimed and requires an unnecessary amount of labour cost. One solution is Autopilot Journeys.

We have been using Autopilot Journeys with our dealerships for 6 years and it has benefitted our business immensely by regularly following up service customers, new prospects, lost prospects and new sales, all with minimal setup costs and completely automated.

In a future blog post, I will write on how you can automate a data export from your DMS, but for now I assume you have already got the data into Autopilot. In this blog post, I will walk you through a service reminder journey 

The first step is to create a contact list of Service Customers that are due for a service in 1 months time. The next step is to create a journey which triggers when a contact enters that list, once the journey begins the contact can be guided through a marketing journey that can range from sending text messages, emails, facebook or google ads. Like clock work, they can receive a mixture of emails and SMS in regular intervals leading up to the due date, and then a series of over-due notifications.  

The powerful capability of Autopilot is to direct a contact on different journeys and emails depending on a contacts interaction with emails, for example if a contact doesn’t open an email then they can be sent an SMS. Or if a contact visits a service specials page on a dealers website they could be followed up with a similar email.

In theory, the service reminder journey could continue forever until the customer either unsubscribes or a service is booked. To exit the contact from a reminder journey, another journey list for service bookings could exit the contact from a reminder journey.

To create a more hands-off approach, you could also serve facebook ads advocating on the benefits of regular vehicle servicing - to that particular client rather than to a vast audience.

All these capabilities for a couple of cents per client. Autopilot Journeys