Australia: Moore Stephens Auto Winter Newsletter 2014

Last Updated: 5 August 2014
Article by Brett Fowler and John Gavljak

In this, the Winter issue of the Moore Stephens Automotive Newsletter we are pleased to inform you of the key findings from our recent nation wide 'Automotive Fraud Survey'. The fascinating survey highlights the prevalence of fraud within the industry and was a highlight of the AADA conference held in July at the Gold Coast.

New vehicle sales for the June quarter, indicate a continued decline, despite this, Mazda and Toyota remain high on the 'top selling list' .

Please contact your local Moore Stephens Automotive representative if you would like further information or detail in regard to this newsletter.

Fraud "The Enemy Within"

Moore Stephens recently conducted an Australian Automotive Retail fraud survey which was the first survey of its kind undertaken in Australia.

The objective of the survey was to understand the type of fraud being committed in dealerships, by whom, the size, financial consequences and the processes put in place to prevent fraudulent behavior. The results have generated significant discussion which suggests that fraud is a topic that is of significant interest to automotive retailers.

Some of the key findings from the survey were:

  • 1 in 3 frauds committed exceeded $100,000. To put this in context, the average metropolitan dealership with annual sales revenue of $80m at a net margin of 2.5% must generate an additional $4m in sales to compensate for the fraud;
  • 57% involved a departmental manager;
  • Greed or gambling / addiction were the main motivating factors for the fraudulent activity to occur;
  • 95% of dealers have experienced fraud in the last 5 years.
  • Fraud is most prevalent in the used car department, with 36% of frauds occurring in this department;
  • 96% of perpetrators were internal to the business;
  • 87% of fraud was committed by men; and
  • 76% involved one person

In response to a fraud occurring, 53% of automotive retailers increased supervision while 52% also undertook additional audits. This suggests that almost half the respondents implemented processes to mitigate future fraud. Preventing fraud should be paramount and is more important than detecting or dealing with it. Setting the right tone from the top and having an appropriate culture creates an environment which assists keeping people honest and accountable. Automotive retailers should also ensure that internal controls are robust and prevent the opportunity for dishonest staff to perpetrate fraud. We have developed automotive industry specific review programs and exception reporting techniques which assist dealers in identifying weaknesses in internal control systems.

To arrange a no obligation meeting to discuss your specific circumstances, please contact your local Moore Stephens Automotive representative.

A summary of the survey findings is available for your reference - Click here to download.

Key findings & Update from the 2014 AADA Conference

Moore Stephens had a delegation of nine partners and staff attend the AADA convention held on the Gold Coast at RACV Royal Pines resort from Thursday the 10th to Saturday the 12th July. The convention attracted over 450 delegates, including automotive retailers and suppliers to the motor industry. Moore Stephens presented a work shop session covering Automotive Retail Fraud The Enemy Within; this presentation marks the third year in a row that Moore Stephens have presented as specialists in the automotive industry.

Ian Field, the newly appointed AADA Chairman welcomed delegates to the convention, which was followed by an exceptional and positive keynote address by Veronica Johns, President and CEO at Fiat Chrysler Group. Veronica's presentation illustrated the benefits of a leader understanding the following:

  • Their strengths and weaknesses;
  • The benefits of strong and positive staff relationships;
  • The benefits of positive staff engagement; and
  • Understanding it is "not about me"

Veronica detailed the tangible business benefits to be derived by understanding and fostering a positive working environment, focussing and elaborating on the points above. "It's not all about me" was Veronica's mantra.

Patrick Tessier, interim AADA CEO addressed the convention delegates regarding the new AADA organisation. It is a not for profit, incorporated body owned and run by automotive retailers. Patrick stated twenty five percent of all new car franchisees are members of the new AADA which represent fifty percent of all national sales volume. Members' of the current AADA board are automotive retailers which include a representative from each Australian state and territory. The AADA exists to support automotive retailers and give them a voice to, amongst other things, address the following:

  • Lobby government on issues (i.e. LCT and GST legislation);
  • ATO compliance obligations (i.e. practical issues arising from legislation changes);
  • Legislation and policy change (i.e. ASIC review of credit providers);
  • Issue practical documentation (i.e. health checks of dealerships); and
  • Franchise agreement assistance.

The overarching message from Patrick and Ian was that the new AADA and its board are here to support and assist all dealers. It was strongly encouraging all dealers to become members so it has the backing and resources to effectively represent dealers collectively.

The AADA board were presented for a question and answer session hosted by Ian Leslie. The issues discussed included:

  • GST and various taxes imposed on automotive retailers;
  • Used car imports;
  • Franchisor incentive programs;
  • The "right to repair";
  • Digital investment versus bricks and mortar investment and the ideal model of a dealership;
  • Franchise agreements; and
  • The new AADA operations and progress to date.

Sessions were also presented by Tony Weber, Ron Hardaker and Evan Stents providing a summary on current significant industry issues.

Automotive retailer solution workshops were delivered and according to Patrick Tessier the two standout sessions of the conference were presented in these sessions. They were Fraud The Enemy Within by John Gavljak and Rami Eltchelebi of Moore Stephens and "Fixed Operations – Turns Your Fixed Ops Into A Goldmine" by Alan Bergman. The fraud session presented the insightful results of the first ever survey into fraud within the automotive industry as well as informative discussion on internal controls and systems. This discussion incorporated recommendations on specific tasks, automotive retailers must undertake in the event of fraud, and things which can be done to identify potential fraud and limit exposure.

Paul Cummings delivered plenary sessions on Friday covering "Sustaining Excellence: A successful dealership is a well-planned journey." The highlights of the sessions were Living as a Leader and Premium Customer Care. Paul presented some thought provoking ideas and practical tools for automotive retailers to utilise.

Saturday started with special guest Dr Giavanni Pagno, the founding president of Europa Automotive Institute. Dr Pagno presented his thoughts on the future of the Australian Automotive Industry, and questioned what is probable, possible and preferred.

Other presentations included Frank Romano on "Customer Service" and Avoiding Legal Obstacles and Keeping Your Profit by Maria Townsend

The closing key note address was delivered by former Prime Minister John Howard. As expected, Mr Howard spoke exceptionally well and discussed leadership and values at length. The key message from Mr Howard's presentation included the following points, for which a leader should understand:

  • Stand for something;
  • Have strong values;
  • Foster good attitudes and goals;
  • Focus on relationships between leaders and immediate leads;
  • Accept that leaders will make mistakes, however they must get the big things right;
  • Always trust your instincts / trust your judgement; and
  • Always understand your audience.

In conclusion, the convention provided a range of thought provoking sessions incorporating insights and practical information, addressing current industry issues. The new look AADA left the impression they are here to support and assist automotive retailers, with dedication to the automotive retail issues at hand. Moore Stephens has advised AADA on a range of issues and will continue to provide assistance to AADA and other automotive industry bodies.

For more information about AADA and the convention, please visit:

June 2014 Quarter Sales Update

New car sales for the six months to 30 June 2014 were 559,951 a decrease of 2.4% in comparison with the 573,711 cars sold in the corresponding six months of 2013. Approximately 58.9% of the vehicle sales to 30 June 2014 were in New South Wales and Victoria.

The Mazda 3 was the highest selling new car, overtaking the Toyota Corolla with 22,524 units sold to 30 June 2014. The Corolla continued to perform strongly, having sold 22,166 units. The Toyota Hilux rounds out the top 3 selling vehicles, with 19,160 units sold to 30 June 2014.

The domestic manufacturers have seen a 2.5% reduction in market share since 30 June 2013. Only 51,286 of the total 559,951 vehicles sold in Australia in the first half of 2014 were produced domestically, amounting to 9.2% of new vehicle sales in Australia. This trend is expected to continue, with Toyota following Ford and Holden in the decision to cease manufacturing in Australia by 2017.

Despite the decision to cease local production, Toyota continues to hold the largest market share, with 18.1% followed by Holden and Mazda.

The SUV segment continues to experience growth, with a 1.6% increase in market share since June 2013. Toyota, Nissan and Jeep account for the top 3 selling SUV brands at 30 June 2014.

Segment Sales Unit Change
Passenger 132,356 -1.2% (1,603 units)
Sports Utility 82,513 -0.1% (92 units)
Light Commercial 44,821 -9.4%(4,663 units)
Heavy Truck 6,680 -4.6%(320 units)

Top Manufacturers - Market Share

Mazda3 22,524
Toyota Corolla 22,166
Toyota Hilux 19,160
Holden Commodore 16,355
Hyundai i30 15,692

Top Manufacturers - Market Share

Toyota 18.1%
Mazda 10.1%
Holden 9.3%
Hyundai 8.9%
Ford 7.5%

Top 10 Makes - June YTD 2014 v June YTD 2013

Top 10 Makes June YTD 2014 v June YTD 2013
Toyota 18.1% 18.5%
Holden 10.1% 9.0%
Mazda 9.3% 9.1%
Hyundai 8.9% 8.4%
Ford 7.5% 7.8%
Nissan 5.9% 7.7%
Mitsubishi 5.8% 6.5%
Volkswagen 5.1% 4.8%
Subaru 3.6% 3.6%
Honda 2.8% 4.1%

Going forward, we expect to see a reduction in sales of locally manufactured vehicles as Holden, Toyota and Ford commence their wind up of Australian operations. Overall, the new car volumes for the calendar year are expected to remain constant.


A summary of the 2014 Moore Stephens Fraud Survey

This publication is issued by Moore Stephens Australia Pty Limited ACN 062 181 846 (Moore Stephens Australia) exclusively for the general information of clients and staff of Moore Stephens Australia and the clients and staff of all affiliated independent accounting firms (and their related service entities) licensed to operate under the name Moore Stephens within Australia (Australian Member). The material contained in this publication is in the nature of general comment and information only and is not advice. The material should not be relied upon. Moore Stephens Australia, any Australian Member, any related entity of those persons, or any of their officers employees or representatives, will not be liable for any loss or damage arising out of or in connection with the material contained in this publication. Copyright © 2014 Moore Stephens Australia Pty Limited. All rights reserved.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.