Tim O'Brien | May 6, 2010

SPLITTING THE RETAIL MOTOR INDUSTRY straight down the middle of Australia, VACC (Victorian Automobile Chamber of Commerce), MTA-Queensland, MTA-NSW and TACC (Tasmania), have broken away from the national motor trades body, MTAA, and today announced the establishment of a new national representative body, AAIA - the Australian Automotive Industry Association.

These state associations, formerly federated into the Motor Trades Association of Australia (MTAA), represent the commercial and political interests of the retail service and repair sector (RS&R) of the motor industry: new and used car dealers, crash repairers, mechanical workshops, etc.

The fight with the national body has been brewing for some years. At issue has been dissatisfaction among the eastern states' bodies with the leadership, direction and political effectiveness of MTAA.

Now, with MTA-NSW having picked up its bat and ball and also lined up with MTAQ, VACC and TACC, the new Australian Automotive Industry Association can claim to represent 80 percent of businesses across Australia in the automotive RS&R sector.

It would seem that other key groups - heavy hitters in Australian industry - are backing the move.

At the press conference today to announce the new national body was Andrew McKellar, Chief Executive of FCAI (the national body for vehicle manufacturers and importers), Peter Anderson, Chief Executive of ACCI (Australian Chamber of Commerce and Industry), FAPM (Federation of Automotive Parts Manufacturers), the ACCC, SAE-A (Society of Automotive Engineers) and other influential industry groups.

"Reform from within (the MTAA) was not possible," MTA-NSW CEO and President of the new body, AAIA, James McCall said. "In the last 10 years it has grown stale and does not effectively represent the motor trades in political forums."

"We are confident that the remaining members of MTAA (MTA-WA, MTA-SA, MTA-ACT and MTA-NT) will eventually come over to the new association," he said.

What is clear is that the gloves are off: industry representation is now effectively split between the eastern states and the rest. Not so clear is what impact, if any, the establishment of the new body - effectively emasculating MTAA, and leaving it adrift without a financial paddle - has on the motor industry superfund, MTAA-Super.

AAIA President James McCall (left) and MTAQ Executive Director Ian Field.
AAIA President James McCall (left) and MTAQ Executive Director Ian Field.

While VACC Executive Director David Purchase said, "Nothing we are doing today should, or would, impact adversely on the MTAA Superannuation Fund", the issues are complex. The state bodies are shareholders in the Trustee company which manages the Fund, but the administration has been provided by MTAA.

The performance of the fund and the dual role of the Executive Director of MTAA, Michael Delaney, who is also Executive Director of MTAA Super, in overseeing both the industry body and MTAA Super is clearly also a matter of contention.

Certainly the MTAA Super fund has returned disappointing results over the past year.

While the announcement today brings things to a head, there has been some significant manoeuvring over recent months as each side has shaped up from its respective corner.

In early March, an attempt by Mr Delaney to have MTAA Super buy its own name - thus transferring the MTAA name from Motor Trades Association of Australia Limited to the super fund - was derailed by the state motor associations (including VACC, MTA-NSW and MTAQ).

There is still a lot to be played out, however "the new national body has no commercial ambitions for the provision of administrative services to the Superannuation Fund Trustee", VACC Executive Director David Purchase said.

It will be interesting to see how the members of the new association (motor industry employers and their employees) will now have their interests represented in their industry superfund.

The performance of the fund aside, at the root of the dissatisfaction with MTAA is its perceived ineffectiveness as a representative body.

There is growing frustration among small businesses in the motor industry with the increasing power and political influence of big business. Crash repairers feel increasingly screwed by insurance companies, independent service station operators feel increasingly screwed by oil companies, franchisees increasingly screwed by franchisors... and so it goes.

The argument of the new body, AAIA, is that it can better represent the small business interests of its constituents than the current "bureacratic" and "ineffectual" national body.

"It's time for the industry to get hold of its own agenda," Mr Field said.

We're yet to hear from MTAA and the remaining states. Watch this space.