Drive to defeat Covid-19

Carmakers are thinking hard about how to turn cabins into safe spots.

WORRIED that even big doses of disinfectant mightn’t keep coronavirus out of your vehicle?

So, it seems, are car makers. Which is why they are looking to employ other, sometimes more extreme methods.

How long, then, before the vehicle in your driveway can maintain bug-free status through using ultraviolet light, really high-tech air filtration or even just as a result of turning up the heat really high?

These are the methodologies coming to the fore. Latest to hit headlines is Ford’s hot shot approach. 

As the images today show, the “heated software enhancement” system is literally a matter of turning up the heat.

We’re talking hot. As in generally ‘beyond Sahara in summer’ hot. Fifty-six degrees Celsius is generally well above the maximum settings that your vehicle’s own system is usually designed to achieve and within a range considered risky for prolonged safe human tolerance.

However, it’s what the doctor – or at least researchers at Ford Motor Company in Detroit and Ohio State University – have ordered as being effective in terminating any viral elements that might be lingering in a vehicle’s cabin.

The research has hit the front line, in that it has fitted the Police Interceptor Utility vehicle it builds for law enforcement use in North America with a new cabin heating feature designed to “inactivate” any virus particles.

The New York City Police Department, Los Angeles Police Department and Michigan State Police have participated in field-testing the system, which works by baking the car’s interior at 56C or higher for 15 minutes.  

The software purposely increases the engine temperature and raises the climate control and fan settings to these new maximum settings then enables a subsequent cooldown protocol at the end of the cycle. 

To ensure officers know when the system is operational, a series of pre-set flash sequences are carried out by the hazard and tail-lights with a separate sequence displayed at the end of the cycle during cooldown.

And yes, there are precautions against inadvertent use. In latest cars it only triggers by pressing cruise control buttons in a certain order, while earlier models require an external tool that connects via the OBD port.

Ford chief product development and purchasing officer Hau Thai-Tang said first responders were in dire need of protective measures given they were on the front line protecting everybody else.

“We looked at what’s in our arsenal and how we could step up to help,” he said.

“In this case, we’ve turned the vehicle’s powertrain and heat control systems into a virus neutraliser.”

According to Ohio State University department of microbiology laboratory supervisors Jeff Jahnes and Jesse Kwiek, “exposing coronaviruses to temperatures of 56C (or 132.8 degrees Fahrenheit) for 15 minutes reduces the viral concentration by greater than 99 percent on interior surfaces”.

Ford meanwhile says that the system adds an extra level of thoroughness to the sanitisation guidelines approved by Centres for Disease Control and Prevention given that heat can “seep into crevices and hard-to-reach areas, helping reduce the impact of human error in applying chemical disinfectants”. 

Ford police brand marketing manager Stephen Tyler described Covid-19 as an “invisible enemy” and said he was proud Ford was able to provide a solution. 

So, keen to get your Fiesta, Ranger or Mustang all toasty? Sorry, it’s a no-go.

The make has made clear a system designed to be used in conjunction with proper cleaning methods is not, for reasons of safety (and, dare we say it, common sense – you could imagine the lawsuits from inappropriate use), going to transfer into civilian vehicles.

So that’s one approach. What is coming to the boil? In general, car makers are looking at employing more antimicrobial materials and easier-cleanable surfaces. They are also assessing the quality of air filtration systems. Geely, the parent company of Volvo, reckons the set-up for its new Icon electric car will achieve the N95-certification meted medical masks.

Hyundai is well advanced its bid to use ultraviolet light sterilisation technology that would be installed like a dome light in its vehicles. This could be taking a cue from the grenlite (pronounced ‘greenlight’) device shown off by a Michigan-based tech firm, GHSP, at CES this year. This sterilises a vehicle when sensors detect there are no occupants, automatically scheduling new cleansing cycles when needed — and is already in use in emergency vehicles in three US states.

Another specialist in cleaning, Faurecia, is also looking at foggers that would spray a disinfectant such as hydrogen peroxide. Vehicle assembler Magna is evaluating “an ozone-generating system.”

Not so keen on any of these measures? You’re in a minority. When car owners were surveyed in five countries, 80 percent said they'd pay extra for technology that could sterilize a vehicle. Another survey just out has found a third of vehicle shoppers thinking about "air quality features" in a future car purchase.

Hard times to bring budget utes to fore?

The country still needs utes … if they’re cheap and tailored foremost for real work, a distributor says.

POLITICAL push to get the country moving again with toil-intensive job creation schemes will give ute sales an old-fashioned stir-up.

Providing, that is, they are models created to the ‘old-school’ formula that puts worksite punishment ahead of weekend play.

That’s the view of an advisor for a distributor which has good reason to hope budget back-to-basics models will rise to the fore over the next 18 months proves accurate. 

Russell Burling speaks for Dealer Direct Wholesale Limited, the national distributor for India’s Mahindra and Mahindra, whose smallest traydeck, the Pik-Up, has just under a major refresh, which beyond the easily-recognised restyling also runs to a major re-engineering for improved refinement.

With pricing starting at $24,990 and spanning to $34,990, P:ikUp stands as the cheapest load-up choice in the New Zealand market with clear terrain now that a Chinese competitor no longer has a rival model here.

Meantime, the PikUp line has doubled in count, with addition of four rear-drive single and double cab with choice of tub and cab chassis. All run a 103kE/320Nm 2.2-litre turbodiesel and with six-speed manual, though an auto will arrive later.

Range enhancement for a vehicle that has been here for seven years already might attune sweetly with perception that massive changes to our economy from the coronavirus that will unavoidably impact deeply on employment and spending habits.

russell burling

The models were signed off for NZ consignment before coronavirus was known about, but the effect of lockdown and restrictions set to maintain in the aftermath leaves Burling thinking “we’ve made a really good call.”

Government’s intent to keep the economy on the boil is a positive and he sees ongoing opportunity from its preparedness to fund big dollar shovel-ready public projects as those efforts will require new equipment.

However, he contends those at worksite level will be more choosey and won’t be spending large.

That’s an opportunity for Mahindra to promote the reliability, functionality and value aspect of its budget-minded products, which beyond PikUp also span other off-road configured models plus passenger vehicles.

But it’s also a sign that those other makes that have concentrated effort serving up big expensive doublecabs will be caught out. 

This new world demands tools, not pleasure craft. “A lot of those (expensive utes) are not required and not needed. We need tools now and that’s what we offer.”

Does that mean an end to the market condition of the past five years, when new passenger sales have been so skewed toward utes that the Ford Ranger has been the country’s top selling vehicle for several years? 

“It’s hard to exactly say it’s finished, but certainly the demand will be less. Everybody in business is going to take some pain through this (coronavirus).

“You need utes, but you need utes that do jobs. Do you need all the high-end stuff going forward? Probably not as much.”

Sales data from as far back as late last year seems to support thought the glory days are waning for ego-polisher models that can cost more than $90,000, with the likes of the dominant Ford Ranger maintaining market share but with smaller volumes.

Quite possibly anxiety with the big players will have grown since, not only because of emergent prediction of new vehicle sales halving this year but also with cancellation of Field Days. 

Promotions around the mid-July Mystery Creek event historically spike annual registrations counts and major players will have stocked up large, with consignments built and shipped before the virus closed down their plants in Thailand. If demand has cooled, do they have too many vehicles? That’s surely why Holden has more Colorado variants than anything else in its pre-closure stock clearance.

Potentially, then, there might be some sweet deals ahead, but perhaps the glam models won’t turn the heads of those set to engage in the public works programmes set to unroll. 

“They need work utes,” contends Burling. “If you’re going into back country on pest control, you need hose out floors and rubber mats, not high-end carpets.” 

Though Burling sees the new rear-drive PikUps as being valuable to volume, it’s likely the singlecab 4x4 will remain as the type’s biggest seller. 

“It’s ideal for possum hunters, farmers, those in construction … it’s a really  good product. A sharp tool for that market.”

This interview also gave opportunity to briefly drive the entry PikUp, the singlecab chassis that is new for 2020. This level comes in the S6 trim, which provisions for ‘function and value” rather than the S10 fitout, that lifts to what the maker describes as a more SUV-like spec.

Even so, the budget layout is not as rudimentary as previously. The interior benefits from ergonomic improvements, better plastics and a more dedicated approach to fit and finish than was apparent in the preceding line. The S6 also now takes better equipment: Cruise control, Bluetooth phone connect, upgraded seats with arm rests and, on the driver’s side, height adjust. You need by S10 to achieve sat nav and a reversing camera, both running through a touch screen not availed in the cheaper choice.

Option packs to suit rural, trade and fleet buyers can be created from an options list that’s now more comprehensive. A which compatible steel bull bar with bash plate, brush rails, snorkel, tow bar, canvas seat covers and so on. All in tune with a work-first ethic that also reflects in it being tailored to tote a payload of up to 1065kgs with a 2.5-tonne braked towing capacity. 

The demonstrator also had a light-weight but sturdy alloy deck, sourced from Australia, as an option to a steel type, and was trialling a wheel and tyre pack yet to be signed off.

The driving experience does not disguise that this is a working ute and performance is adequate, nothing more, though the engine seems perkier in the low and mid-range. However, the effort to reduce mechanical and road noise is obvious, even if the engine remains a dominant background voice during phone discussions at 100kmh. 

Notwithstanding that Mahindra’s plants are also currently closed by the virus, expect to see more activity from Mahindra going forward, as PikUp stands as the only existing model not due complete replacement.

The new Thar, a Jeep Wrangler lookalike (to the point where the grille design had to be replaced to appease the Americans), is coming and so too the Scorpio sports utility.

Mahindra also stands to benefit from having a major shareholding in SsangYong, with all the latter’s engineering and technology development having effecting shifted out of South Korea to India.

The Ssangyong brand itself, however, seems in parlous state – having failed to make profit for years, its future seems to hang in the balance from Mahindra having in April curtailed plans to invest a further US$423 million in a bid to make the Korean brand profitable by 2022.

It’s direction to SsangYong to seek “alternate sources of funding” has not yielded anything useful and conjecture now is that the South Korean government might yet direct Hyundai to subsume the SUV specialist marque, to thus avoid the embarrassment of it seeing it fail.

Mahindra’s involvement with SsangYong does not reflect locally, with the Korean marque operating with a separate distributorship.

Covid-19: National need could pep battered rental scene

The rental car scene has been massively disrupted but the coronavirus crisis won’t kill it, Toyota New Zealand contends.

 GREEN shoot opportunities, probability of continued national need and sheer resilience will keep some rental car operations going.

This proposal is from the chief operating officer of Toyota New Zealand, historically the largest provider of NZ-new vehicles and caught now in an unfolding sector crisis.

With fleet providers desperate to relinquish stock and new vehicle distributors into treading a fine line in wanting to help as best they can while also having to protect their own operations, it’s a tough time.

Yet Neeraj Lala believes all is not lost.

Speaking after a week in which providers’ and the industry have taken turns to express sometimes controversial views, he accepts it’s not at easy time.

Yet he has faith in the entrepreneurial spirit and dogged determination now being demonstrated by many players, not least lower-tier independents.

In wake of the Rental Vehicle Association proposing that tourism accounts for up to 80 percent of work, Lala proposes New Zealander hirers also present valuable support that will reprise and even grow.

So, insofar as the idea of a wholesale rental car industry collapse goes? He doesn’t buy it.

“I don’t expect it to collapse, per se. There is a significant portion of the rental market that is business and corporate and they still rely on regional travel.

“As we transition down through the (Covid-19 alert) levels, then regional travel will open back up. I don’t think air travel will be as significant.

“Yes, tourism and international travel is going to play a big part in terms of the new size of the fleets that some of the rental companies might have to carry.”

Yet the operators TNZ has been conversing with “are definitely not thinking that because tourism is over they are going to die.”

That’s not just the big-name brands but also some lower tier operations previously reliant on tourism alone. There are plenty of them; 40 in Queenstown alone, Lala says.

But these small set-ups have often been established by highly-entrepreneurial individuals. They’re inventive and imaginative and some are looking at reconfiguring their fleets into freight and delivery roles. He salutes that spirit. 

“An unintended consequence of what we are facing is that new industries and new companies are going to emerge.

“Freight and deliveries are going to be in higher demand than we realise. I heard just last week that there is one company already looking at re-utilising its fleet to enable one to two-hour deliveries of food.”

This didn’t surprise. “You have to remember that these people are very entrepreneurial. They are not just going to be happy to close the doors and die. They will be looking to diversify their fleet – especially if they cannot sell it – and turning it into something.

“I think it is going to be exciting..” 

Lala’s positivity is at odds with the RVA, which pulls no punches in determining the $700 million a year trade involving anything from 30,000 to 50,000 vehicles is serious trouble, with some notable names unlikely to survive.

As much as TNZ has been attempting to reduce its exposure to the rental market over the past two years, many of those favour Toyota vehicles.

The Palmerston North-headquartered operation provisioned around 7000 vehicles into that sector last year and had thousands more set to go out in coming months to meet the traditionally peak winter period.

Fortuitously some of a consignment locked in last October wasn’t built –Japan’s Covid-19 response caused a slowdown in production, so those yet to go down the line cancelled – yet about 30 percent of the consignment, still hundreds of vehicles worth several million dollars, is either already here or on the way.

Resolving what to do with them is under way, and some - particularly models subject to waiting list with private buyers - might yet divert, yet this matter will be as delicate to manage as the other issue of the moment: Being asked to buy back more vehicles than it can cope with. In respect to the latter Lala warns: “The industry’s, and the country’s problem, in regard to rental cars cannot simply become Toyota New Zealand’s problem.”

On top of this, coronavirus impacted when TNZ was already working to manage returning to the market an undisclosed, but thought to be significant, stockpile of ex-fleet and rental stock it had corralled when times were good. 

The challenge of reinstating to the market just those vehicles – some of which, insiders say, were mothballed for so long some were out of registration and requiring tyres and batteries - in a way that did not flood the used market was, in isolation, big enough.

The scenario that might yet emerge would be far bigger. The prospect of rental fleets, particularly the tier one operators with effectively brand-new cars, fire sailing their stock in bulk is not palatable.

As much as sudden and unrestricted availability of an avalanche of effectively ‘as-new’ vehicles, likely at highly-discounted prices, might seem good for any consumer in position to snatch a great deal, it could cause massive disruption within the new car sector.

The potential for this was seemed to be hinted by RVA chief executive Pim Borrens’ when he complained to national media that distributors were using ‘force majeure’ clauses to renege on buy-back agreements.

Lala says that’s not exactly fair. In respect to how TNZ operates, there’s no legal obligation. Rather, TNZ cites as being amenable to being first in line for taking vehicles as and when they become available.

But TNZ has been pulling back on this. The pre-coronavirus stockpile, Lala said, reflected that “in the past five years we have probably taken back more than we have needed. That’s one of the reasons why we have turned the volume back these past two years.”

The glut reflected that some models popular as rentals were sometimes less so as private vehicles. The Highlander sports utility being a good example.

Lala can understand why rental companies are trying to ‘de-fleet’ and he says TNZ is doing the best it can to help achieve that. 

Yet “the difference between what the rental companies want us to take back, and what we can take back is substantial.

“I cannot call it an obligation because it is not an obligation. The rental companies who feel I should be buying back all of their cars … the expectation that Toyota will fund the whole thing and rescue the whole industry is … well, that’s just not realistic or feasible.

“We want to respect the relationships we have – some go back three decades - and are trying to do that by taking as many cars as we can.” Yet if operators were simply going to divest in large scale “it is just going to drop the residual values that we have calculated going in.”

“I cannot afford to have 30-40 months’ stock of Corolla. Normally I would have normally taken 50 percent of that (first tier rental) volume and pumped it into tier two, three or four.” That wasn’t going to happen now so TNZ had to mitigate its risk. 

As much as Toyota remains a big rental involver, and potentially the most dominant by volume, it no longer by any means owned the scene, and plenty of distributors were involved once again. However, he agreed, even if TNZ dropped out completely, it would still retain overall new car market leadership.

David Crawford, chief executive of the Motor Industry Association which speaks for new car distributors, has expressed disappointment the RVA spoke out last week.

“The Rental Vehicle Association is, of course, trying to represent its member’s view and plight in a way that helps that sector, but this is only one side of a commercial arrangement.”

Borren did not reply to requests for comment.

‘Closed for business’: New car industry appeals for help

April’s new vehicle sales count provides dramatic proof the Covid-19 pandemic has the new vehicle industry reeling.

COVID-19 has swung a near-knockout blow to New Zealand’s new vehicle industry, with April recording a more than 90 percent fall in vehicle sales.

In stark contrast to April last year when a record 10,640 new vehicles were registered, the national Coronavirus lockdown is the reason behind just 1039 vehicles being registered last month, with the top-selling model, Kia’s Seltos, registering 95 of those.

Now, the organisation representing the country’s new vehicle industry says it needs help – and it is demanding the Government fast-track introduction of a series of policies to achieve this.

“The Government can play a decisive role in lessening the economic pain we are feeling,” says Motor Industry Association chief executive David Crawford.

The organisation wants deferral of introduction of any feebate scheme, replaced instead with incentives for the purchase of fuel-efficient vehicles.  Feebates  are a combination of fees imposed on larger gas-guzzling vehicles and rebates offered to purchasers of smaller and fuel-efficient vehicles.

“Prior to the pandemic, the MIA supported in principle the adoption of a feebate scheme. However, given the degree of fiscal impact the pandemic is causing, we believe this policy needs immediate review,” says Crawford.

The MIA also wants the Government to accelerate the uptake of plug-in vehicles  across the Government fleet.

“To date, uptake of plug-in vehicles by government agencies has been less than modest at best. The MIA calls on the Government to increase departmental budgets to permit departments to increase their uptake of BEVs and PHEVs,” says Crawford.

Financial incentives should also be introduced to remove from the national fleet vehicles older than 20 years, and/or where their exhaust emission standards are the equivalent of Euro 3 or less, Crawford says. He adds that this vehicle scrappage would be in line with the country’s new road safety strategy and the Government’s climate change objectives.

 “We all know we have an old fleet, with numerous polluting and unsafe cars roaming our roads,” he says.

Crawford describes April’s new vehicle scene as “closed for business” other than for the supply of essential vehicle and three business days at the end of the month for contact-less sales.

That distributors were able to sell as many as they did was testament to their determination to partially re-open for business while maintaining strict health and safety process,” he says.

Overall, new vehicle registration were down 90.3 per cent in April – sales of passenger vehicles and SUVs dropped 89.6 per cent, and commercial vehicle sales were down 91.4 per cent.

So dramatic was the fall in registrations, that some highly unusual sales results were recorded by the MIA.

Market leader for the very first time was Korean brand Kia, which achieved a 16 per cent share with 169 sales, including 95 Seltos small SUVs, 24 Rio hatchbacks, and 22 Sportage compact SUVs.

The Seltos was also easily the top-selling passenger vehicle, with the Suzuki Swift hatch and the pint-sized Suzuki Jimny SUV in second and third places. 

And in the commercial sector it was the Toyota Hilux ute that was top model with 59 sales, followed by the Holden Colorado that is on runout prior to the Australian brand exiting the New Zealand market at year’s end.  And Ford Ranger – which has dominated the light commercial market for several years – was in third place with a mere 29 sales. 

And here’s a stark illustration of the state of New Zealand’s rental industry: whereas usually monthly vehicle registrations number in the hundreds, in April there were just two – and they were both Isuzu N-Series trucks.

 Covid Countdown:  April’s 10 Best-Selling Vehicles

Kia Seltos                     95

Toyota Hilux                 59

Holden Colorado          38

Suzuki Swift                  35

Ford Ranger                  29

Suzuki Jimny                 28

Kia Rio                          24

Holden Commodore     23

Kia Sportage                 22

Toyota Hiace                21

Covid-19: How's post-Level Four life for distributors?

How’s our new car market doing – and what’s the sentiment about an environment in which coronavirus and its after-effects seem set to imprint for a long time? The big names of the industry speak.

TODAY’s move to Level Three precautions allows for improved business opportunity; parts supply will resume, service bays will reopen and, yes, you might even be able to buy a new vehicle.

Yet everything still requires care and consideration. While less restricted than Level Four, the next step down still demands every contactless interactions. Restrictions will still apply with Levels Two – the next step, potentially coming after May 18 if all goes well – and One, though those are definitely more welcoming.

With this in mind, the distributors here – leading distributors were invited to offer thoughts, pertinent to their brands, in respect to this question:

“What are the challenges and potential opportunities as you see them that will arrive in a Level Three Covid-19 new vehicle market. Is that a level at which you can begin to restore your business and, if not, what condition would be required?”

Neeraj Lala, chief operating officer, Toyota New Zealand.

Reason for inclusion? Market leader.

Toyota will continue to provide our customers with an exceptional customer experience under Level Three.

Twenty-four months ago, we revolutionised our business to a new model, and both fleet and private customers have enjoyed the new experience. Under Level Three, our haggle-free pricing for private and fleet customers of various fleet sizes, means the car buying experience is easier as you don’t need to negotiate a price over email or phone.

We have also been operating flexible test drives for the same period which means customers have the flexibility to collect a vehicle and enjoy the experience with their bubble without any face-to-face contact and safe distancing on collection. 

We have expanded our service to offer a home delivery with strict health and safety and social distancing options. Every vehicle collected from a Toyota Store, either for servicing or a new or used vehicle sale, will meet the strict sanitisation guidelines we have put in place to keep everyone safe. 

Our website will provide customers with an easy booking system for test drives and servicing, and live chat to assist those customers who require extra support. In terms of vehicle ownership, our servicing facilities have been organised to comply with alert level 3 standards and will continue to provide their high level of friendly service, looking after all Toyota customers.

Reece Congden, head of marketing and corporate affairs, Mitsubishi Motors NZ.

Reason for inclusion? Top electric vehicle volume, wide product portfolio

As New Zealand moves to Level Three, the automotive industry will continue to face severe trading conditions.

While it is a return to work in part, it has yet to be fully understood how effective contactless sales will be for a high involvement product like cars.

MMNZ have been undertaking extensive work while we have been under Level Four restrictions, to ensure that our business is not only 100 percent compliant, but also that our dealer partners are ahead of the curve. 

Our investment in digital platforms and engaging customer-facing content has us well placed to start making the transition to contactless sales - even if it’s only a temporary move.

Having said that, car sales is a ‘people business’ and our dealers are an active part of their local communities, so how Kiwis respond to being asked to purchase a car from their living room will be a point of great interest for all brands.

One of Mitsubishi’s key strengths is our high-performing dealer network. We are supremely confident that they will adapt and fight for their slice of whatever pie is available under Level Three. When you match that with the value-focused offers we currently have in the market, we believe that we’re as well placed as any brand to rebound strongly.

(One initiative from MMNZ has been to produce three awareness videos relating to sales and servicing interactions under level Three. No lockdown regs were breached by the way: The NZ operation reached out to friends in Australia, with content shot across the Tasman). 

Simon Rutherford, managing director, Ford New Zealand

Reason for inclusion? Light commercial dominance with Ranger ute 

There certainly will be challenges - for everyone. We are effectively operating in a constrained environment; our showrooms are closed, sales, service and parts operations will be contactless.

We are also operating new systems and process with strict controls and rules around sanitation, social distancing and contact tracing to keep customers and our staff as safe as possible – all this in a market that looks like it has stepped back to 2008 - 2009.

We and our dealers are pretty adaptable and satisfied that the measures and capabilities we have put in place to conduct business in a Covid-19 safe way at Level Three will protect and support our customers and employees.

We see more opportunity than challenge and we are not going to let a crisis go to waste. We see Level Three as a level at which we can only begin to restore our business. We really need to move to a Level Two and beyond quickly, as unfortunately there has already been significant impact. 

The road to recovery in a lower market in a high cost of capital business presents a longer term challenge.

The conditions that are really required are for the broader economy and the industry to be supported with “back to work” domestic stimulus packages to get people spending and investing and so the industry can continue to contribute to GDP and be an engine room of recovery. 

Longer term, the opening up of borders and in turn strengthening tourism and hospitality will be key.

As regards to our operations in Level Three? On the vehicle sales side of the business, selling and delivering in a “contactless” and remote fashion is nothing new for us – we do this under normal business circumstances for new and used vehicles, for different customers in different segments of the market - from retail to fleet, government and rental and across our network to support nationwide deliveries. The opportunity we have had is to get better and more efficient at operating in this way. We have been operating on-line sales in Level Four. Now we can deliver those vehicle in a contactless manner. 

Our on-line and contactless capabilities are much fitter now and we will continue to pursue improved capabilities as we go forward. Although this is just one of the ways we can conduct business and support the varying needs of our customers, it will not be the only way we transact business. We will certainly be exercising that capability more than we were.

In addition we anticipate that there will be a demand bias towards our top performing Ranger and Transit commercial vehicles as our primary industries and construction sectors lead our economic recovery and the need for moving goods remains.

Separate from our special offers we have also launched a peace of mind finance programme that offers a nil deposit plan and the first three months paid for by Ford and a further three months deferral option for customers if they want to take that up. This is designed to give our customers peace of mind as we all try and climb out of this challenge together. This in addition to the help we are offering existing customers financing through MyFordFinance.

On the service and parts side of the business, many of our dealers already offered pick-up and delivery services ahead of Level Four.  All 31 dealers within our national dealer body will be supporting the new pick-up and delivery service we are launching. We will have nationwide coverage for that. 

We have implemented robust hygiene and social distancing measures alongside contact tracing and will maintain this also when we get to level Two, when customers can enter our premises. At that point we will also have point-of-sale that will help orientate customers to social distancing and hygiene enablers we will provide.

Dean Sheed, General manager, Audi New Zealand

Reason for selection? Prestige sector giant. 

The opportunity that moving to Level Three provides is a partial move back to a full business for all our dealers nationwide. 

I say partial because it’s a move to contactless business across the operation, working within the Government/Worksafe health and safety guidelines and maintaining a major focus on keeping our staff and customers safe and supported as we transition back to normality.

Partial business also means some form of revenue to support the decimated financial results of March and April for both ourselves and our dealer partners. 

The businesses will be focussed on the physical servicing of customers’ cars and the ongoing virtual customer discussions in other areas of the business.

The challenges are clearly the new modes of doing business under the umbrella of Level Three: Stricter controls of cleaning and sanitisation across each business, contactless servicing, contact tracing of everyone within the business and the use of personal protective equipment by our team. All within the new health and safety guidelines implemented by the dealerships.

We are allowed to deliver presold cars to customers which must be handled according to the new protocols as well which will assist in driving some vehicle sales volume under Level Three.

This volume is likely to remain small until Level Two and only with Level One will all facets of the dealerships resume some form of normality.

Restoring the businesses fully will happen over time - many months - as the demand side of the car market is restored through normal purchasing by private and business customers. The economy needs to restore itself on the demand and supply side.

If you have been thinking of buying a new vehicle, now is a great time to purchase given solid inventory and very motivated dealers nationally.

Greg Leet, General manager Volkswagen NZ.

Reason for inclusion? Dominant European marque

It certainly won’t be normal trading and I’m certain we will all be in that position. Likewise, we will all be thinking that the safety of our customers and our staff will remain paramount.

We have been doing a lot of work with the dealers in respect to their ability to comply to Level Three trading conditions regarding personal protective equipment, sanitation and contactless services. Our dealers are well up to speed with that.

What kind of level do we need to get to before we contemplate normality? I think we need to be well out of Level One. Even the two levels below Three will still have social distancing, will still have people with very heightened levels of awareness around hygiene and sanitation. So while some of those will be relaxed from a Governmental view, I think society will remain pretty in tune going forward. 

There will be sectors of business that, I think, will be in a strong position after lockdown. There will be businesses that will be severely impacted. The tourism sectors will be under immense pressure. But I think industries like food supply and any essential services are going to be still very active.

Purely from a volume perspective, our forecast for the balance of the year would still have passenger at roughly two-and-half times our light commercial volumes.

We’re predicting anywhere between a 30 to 40 percent drop in the market. In a global sense, some markets are more severely impacted than that, and some might well be less impacted.

There are times when a car will be seen as a luxury. But we also see possibility that customers might decide to buy a new vehicle with the money they might have previously have kept aside for an overseas trip. They potentially might well want to travel, but locally, and that might involve a new car.

Covid-19: For VW, crisis highlights old school values and new age strengths

Life under Level 4 has accelerated the biggest European distributor’s digital planning. How far might it go?

Can a major car brand really be run from a laptop? In times of needs must, the outcomes have been heartening.

 PANDEMIC lockdown has influenced a major car distributor’s view about the relative values of ‘clicks’ and ‘bricks’.

Like so many businesses, Volkswagen New Zealand has taken its office structure into the homescape since the country closed for business on March 26.

It might not be too much of a stretch to suggest that, as result of the shutdown and social distancing, this massive machine – it’s the largest importer of European automotive product – is operating from laptops on kitchen tables.

Enforced change has asked for fresh ways of working and thinking, plus accelerated reliance on online tools, some in the works for quite some time, one or two considered unnecessary in times of normality. The Covid-19 crisis has left no choice.

All in all, general manager Greg Leet has been impressed by how this unexpected needs must exercise is running. It has so cemented trust in systems and e-commerce approaches he believes what’s working has continued merit once all this over. “When we get back to work, it would be terrible if we did not take the learnings of these dramatic times along with us.”

Greg Leet.- the Covid-19 shutdown has taught a lot about digital operating systems and flexible working practices.

Does this raise broader discussion about brand-retailer-customer interactions. For instance, when we’re in a situation where it’s impossible for the traditional – that is, in basic terms, a customer going to to a showroom, is this now the time when more effort is required to essentially bring the showroom to them?

There’s no argument that, since we’ve been placed in our bubbles, we’ve become more computer-reliant than ever; web traffic in the past few weeks has soared to unprecedented level. Surely we’re not all watching funny pet footage?

All this has hit at a time when it’s hardly a secret that the car world is becoming increasingly reliant on digital solutions, with inevitability of more to come. As Leet puts it, what’s happening and being increasingly thought about right now is an acceleration of what was always going to be.

The exceptional circumstances of the moment have acted as a catalyst for consideration of change. No-one is under any illusions about the impacts of coronavirus, not just now but going forward. Any return to life as it used to be will be slow and measured.

Working through new potentials and opportunities has keep VW and its agents – in New Zealand, that’s Giltrap Group – brainstorming busily at corporate level, Leet acknowledges. Examining the fuller potentials of flexible working environments and technology leveraging has been fulfilling.

“What this (crisis) has done is allowed us to take stock of some of the future thinking that we’ve been working with. We have found opportunities from these challenges.

 “The customer journey is going to be, and should be, different as an outcome of what we have been going through. I think our dealers (also) have an opportunity to become more present in a customer’s environment.”

As to that. Whatever it entails, this hastened journey down the virtual highway won’t diminish the human element nor would it bypass the core historic destination: The established franchise network.

On the first, Leet says for all the merits of online, it’s been an incredible staff effort that has been key to keeping the brand on the road these past few weeks. All that starts at the top; family business, family values.

VW New Zealand’s usual home is this Auckland headquarters.

“There’s been a lot of discussion around ensuring our staff’s health and well-being. When these times come and when the chips are down, the values of an organisation really shine through … I feel pretty bloody lucky to be working in an organisation led by those guys (the Giltrap family). It’s just phenomenal. It’s people first, no matter what. 

While inaccessible to the public, the national franchise network has remained a stalwart; there’s been a lot going on behind those closed doors, within the constraints expected with Level 4.

“The contact between us and our dealers is still as much as it would be any other day. The content of our conversation, of course, is a little different. 

“But we are supporting and enabling them to make sure that their staff and customers are safe in their environment.”

For many students of automotive utopia, the ultimate undertaking might be an online purchasing platform enabling customers to configure and purchase new vehicles remotely.

That process has been toyed with before and found wanting by Toyota New Zealand, which had little luck some years ago when touting Prius and 86 editions that couldn’t be bought from a showroom.

Last week VW in Australia followed a similar route with a structure that makes every new VW model – including commercial vehicles – available to order online. As with the NZ experiment, the process allows buyers to configure their selection and lay down a deposit before a designated dealership takes over to the rest of the process. In Australia, once the deposit has been received, the dealership is in contact within 48 hours to complete the purchase and manage the vehicle delivery. Here legislation requires going to a dealership to sign a sales agreement.

Virtual showrooms as an adjunct to the actual thing increased development of on-line tools that already allow customers to assess and tailor a product they’re considering is an international emergent with potential, Leet says. Additionally, there’s a logic to enhancing those experiences during a time when social distancing makes anything more personal simply impossible.

In the same way, having ‘sales geniuses’ giving a tailored guided tour to a vehicle by video link, which Skoda in the United Kingdom has introduced in the past week as a way of limiting social interaction, is also a good idea even in times of normality.

“We are definitely thinking about those things and even, too, to the likes of how of internal training might look like from a video perspective.”

Cars are essentially computers on wheels already, and the advance to the electric ID models will just bring more digital engagement.

That has already begun, with VW NZ having provisioning ongoing sales and technical training by video link during shutdown.

Regardless of what can be achieved via e-means, the traditional still has a core role. Dealer outlets lend strength and fuel credibility and, as much as direct selling works for some products, vehicles are different, simply because of the emotional connect. See, touch, drive, talk.

Were it not for Covid-19, today’s showroom-centric chat would surely reference this week’s national introduction of a fresh brand stance, pitched around the new look logo from Germany first unveiled last September. Months in the planning, an effort that would undoubtedly have become subject to a lot more raa-raa were it not for the pandemic could not be diverted because of it.

Aside from the latest badge that, the brand says, has reduced to its essential components and with a new flat 2-D look to become “perfectly recognizable in a digital landscape”, this brand design exercise includes a new female brand voice, a new website, and a complete overhaul of each local dealership, set to be implemented in the months to come.

That a roll out theming to new beginnings has timed just when coronavirus is costing the parent a staggering $US2.2 billion in lost revenues every week is wholly happenstance, yet poignant nonetheless.

Covid-19: Cheap fuel and no-one's pumping

Cheap fuel and nowhere to go. What a waste of a long weekend.

A familiar sight throughout NZ right now - an empty service station forecourt.

EASTER is traditionally a time when thousands of New Zealanders hit the road for an autumn break before the onset of winter.

But not this time – the COVID-19 Level 4 lockdown has required us all to remain at home in our ‘bubbles’.

Spare a thought for one of the Kiwi businesses most affected by this: the fuel retailers.

They’re officially considered essential services so are remaining open, but they are suffering a massive 80 percent fall in fuel sales and an estimated 40 percent reduction in shop sales.

Over the long weekend, instead of enjoying bumper trade as motorists parked to fill their vehicles with the cheapest petrol and diesel for years, the forecourts have been largely empty.

One retailer who talked on condition of anonymity - citing contractual obligations with the service station’s fuel supplier - said business had reduced so much that it was hardly worth remaining open.

“However we are an essential service, so we are continuing. But business is very hard right now, and we think it will be some time before any recovery begins.”

The irony of all this is that right now petrol and diesel prices are at historically low levels in New Zealand. They have reduced to the extent that prior to Easter 91 octane petrol could be purchased for as low at $1.70 in parts of New Zealand when discounts were applied. It’s because of continued production disputes between the major oil nations, and the global effects of the pandemic, which have combined forces to result in the biggest collapse in worldwide crude oil demand in the history of the oil industry.

The Level 4 lockdown has resulted in little traffic on Kiwi roads and streets.

And when demand – and therefore the price of crude - falls, then so do petrol prices.

At the beginning of the year the Brent benchmark for crude oil prices had the commodity at US$68 a barrel. But just before Easter it was hovering at around US$31, with many international commentators suggesting that the price has all the potential to fall into the US$20s as the battle continues over whether worldwide supply restrictions should be introduced to counter the effects of the Coronavirus pandemic.

Close to 60 percent of all New Zealand’s petrol and 67 percent of the country’s diesel comes from the Marsden Point refinery, which under normal circumstances imports around 42 million barrels of crude a year, primarily from South-east Asia but also from the Middle East and Russia. And normally this crude is processed into around 6.5 billion litres of petrol, diesel, jet fuel and other petroleum products.

But the COVID-19 lockdown and the virus-caused collapse of New Zealand’s aviation industry has resulted in a huge drop in demand for fuel, which has forced Refining New Zealand to essentially halve its output by rotating its processing facilities - operating only half at a time and keeping the remaining equipment “warm”. Marsden Point will continue operating this way at least until the end of August, and it warns that there is likely to be further reductions in production due to insufficient fuel storage capacity throughout the country.

The fuel retailers have been closely monitoring the situation, and have been responding to the ructions in the global oil market by progressively reducing the prices of petrol and diesel. It’s difficult to say whether prices will drop further, because the price of crude oil is just a small part of the total fuel pricing model – other factors include the value of the New Zealand dollar, shipping, rent, maintenance, and localised competition caused by a proliferation of other fuel retailers, which in recent times has had a major impact on pump prices in various parts of New Zealand.

It’s doubtful whether 91 octane petrol will ever get to the very low prices currently being experienced in Australia, where motorists in Sydney can pay less than 80 cents a litre for their 91 octane petrol at some locations. And in Melbourne, petrol at less than $1 a litre is easy to find. But there are five times more people in Australia than in New Zealand, and the sheer volume of petrol sold means it can be offered at cheaper prices at the pump.

It’s no use getting concerned over all of this though – because since we can’t drive anywhere anyway,  it’s not worth spending the money buying the fuel at the current low price.

But if we could, here are some calculations just to make your day.

In January this year, 91 octane petrol cost an average of $2.28 in Auckland and $2.15 in most other parts of New Zealand, which would have meant it would have cost $114 to fill an average car from empty in Auckland, and $107elsewhere. Just before Easter the prices had lowered to the extent the price to fill had reduced to $91 in Auckland and $85 elsewhere.

That would have been a saving of $23 in Auckland and $22 elsewhere – a not insignificant amount.  But cheer up everyone – it’s also about the equivalent of a decent bottle of wine for you to enjoy in your bubble.

Covid-19: How lockdown lunched Commodore's final fling

It was going to be their last time together, a chance for closure forced by, well, just that. But then fate dealt another blow …

In a few days from now I was scheduled to spend a week behind the wheel of a Holden Commodore.

It was going to be a sort of Last Hurrah for two iconic motoring names – Holden and Commodore – that have been such a strong part of my professional life for many years.

Actually when the road test was first booked in January, the intention was for the subsequent article to celebrate just one of the words – Commodore. That was because at that stage Holden Australia had announced its intention to retire the model and concentrate solely on SUVs in the New Zealand and Aussie new vehicle markets.

But then in February General Motors made the shock announcement that it was moving out of production of right-hand drive vehicles around the world, which has spelt the end of that second iconic word – Holden.

Tragic though that announcement was, I figured it added extra importance to my plan to have that final drive of a Holden Commodore. I planned to take it to the Supercars at Hampton Downs as means of celebrating the 42-year career of the model.

But then in March the whole of New Zealand was shut down and everyone sent home in the big nation-wide effort to keep the dreaded COVID-19 pandemic under control. And that put paid to any chance of getting my hands on the beautiful white Commodore VXR that had been booked for me to drive.

Calamity!

Let’s hope this massive health crisis does ease before Holden New Zealand shuts its doors at year’s end, and that I do get to drive that Commodore. The brand and the nameplate deserve nothing less, because they have both been such an important part of this country’s motoring history.

The first version, the VB (below), was launched way back in 1978 as a slightly smaller and more fuel-efficient replacement of the full-sized Kingswood and Premier. Legend has it that that first model was built on an Opel rear-wheel drive platform, the bodyshell a combination of panels from the Opel Rekord and Senator models, and the car made wide enough to fit three Aussie male bums across the back seat.

The inaugural Commodore wasn’t as large as its arch-rival the Ford Falcon and it was initially thought that might affect sales. But one year later the smaller size became a sales advantage because a world energy crisis saw oil – and petrol - prices skyrocket, leaving Holden perfectly positioned to market its fuel efficiency.

All of the first-generation Commodore variants – VB, VC, VH, VK and VL – were also built in New Zealand, and so was the opening version of the second-generation model, the VN, until Kiwi assembly was halted in 1997.

The Aussies kept building the Commodore for a further 20 years, moving through two more model generations that culminated in the magnificent VF that has to rate as the best Australian car ever made. But in 2017 Holden had to shut down its assembly operations, and the following year it replaced the Aussie Commodore with an Opel from Germany that it rebadged the Commodore ZB.

And that, folks, was the Commodore I was scheduled to drive.

So what now? Well, since all motoring journalists throughout New Zealand have had their scheduled road tests cancelled until the COVID-19 crisis is over, we’re all now reduced to writing about other stuff.

Such as, the new vehicle market, and how Holden NZ is performing in it as its heads towards the time when it must close it doors for the final time.

Well actually, the brand is doing quite well.

Last month was a disaster for the kiwi new vehicle industry, with registrations down a massive 37.5 per cent on March last year. But one bright light in the midst of all the wreckage was Holden, which increased its overall market share from a depressing 7 per cent to a happier 10 per cent – which boosted the brand to second place behind Toyota.

The reason for this is obvious. Holden announced the forthcoming retirement of the brand in mid-February, and ever since it has been running an extensive retail campaign across the entire vehicle range.

Standout models in the campaign have been the Colorado ute which took a 13 per cent share of commercial market via 370 sales in March, and the Trax, Equinox and Acadia SUVs.

There’s still a selection of Holden models still en route to New Zealand too, and they’ll all be offered at special prices as Holden continues with its closing-down sale. That’s once the country’s Alert Level 4 is over, mind you, because new vehicle sales are effectively on hold until then.

Just like motoring journoes’ road test bookings. Gee, I hope it all ends sooner rather than later – because after writing this piece I want to enjoy that final drive of a Commodore more than ever...