Geoffrey Ian Portman

 Mollison Motors Kyneton History

End of the road

The Age November 26, 2008 — 12.00am

When a Holden dealership in Kyneton folded, it sent a collective shiver through the township – and across the nation. Geoff Strong reports.

THE showrooms of Mollison Motors are empty now. Where new Commodores and Holden utes once gleamed for customer attention, there are just a few hubcaps on a rack and brochures stacked on the red carpet. Outside the wind toys with bits of paper and a plastic cup rolls across the vacant used car lot.

The high points and lows in the history of this long-established Kyneton Holden dealer have mirrored the Australian automotive industry for the past 60 years. In its latest twist, Mollison Motors has been hit by something the industry fears could soon be the fate of many. If that happens the pain being felt in this town would then be magnified across Australia.

A little over a month ago Mollison Motors closed when its finance company refused to extend credit to pay for what the industry calls a floor plan. The finance companies are crucial to dealers because they own the cars in showrooms, buying them from makers or importers and then leasing a selection to the showrooms that in turn pay interest while the cars remain unsold.

An estimated 60 of Victoria's 400 new car dealers are facing similar problems following the withdrawal from Australia of two of the biggest financiers, GE Money and GMAC Finance, due to the global economic crisis.

Mollison's closure has delivered the town of 5000 a significant hit, and not only for the loss of sponsorship for the local football team “The Tigers” or the annual agricultural show. Macedon Ranges Shire Mayor Noel Harvey estimates the annual cost of losing the car dealer to be as high as $10 million in lost jobs and spins-off to other businesses.

Victorian Automobile Chamber of Commerce chief David Purchase says dealers are doing it tough across the state, particularly in the country.

"Some are lucky if they are making 1 or 2 per cent on a car sale. Competition is extreme and people are scared of buying," Purchase says.

What happened to Mollison's is a fear going through the entire automotive industry. Insiders say country dealers are considered the most vulnerable and if there is going to be a collapse, it is likely to start in the bush then spread nationally on a grander scale.

Indeed last Monday week, another regional dealer, the Peterson Motor Group that sold Kias and Chryslers in Ballarat, also shut its doors when its finance company pulled the plug. As with Mollison's, its cars were trucked off to an auction house in Sunshine to be sold. This is believed to be the first time new cars have been sold at auction, setting off even more industry alarm bells.

Consequently, the Federal Government is being pressured to deliver another car industry rescue package, this time for dealers.

Mollison Motors began distributing Holdens just down the street from the Kyneton Town Hall in the post-World War II optimism of 1948. The first all-Australian-built model had just rolled off Holden's Fishermans Bend production line.

The site of the dealership had already been involved in the transport industry for nearly a century. Established as a coach and wagon builder in the late 1850s, it became a car dealership some time in the 1930s under the name Campaspe Motors, selling American General Motors brands such as Chevrolet, Pontiac and Oldsmobile.

What became their second showroom on the street opposite was originally a funeral parlour then a tannery.

John Lee's father Jack bought into the business in 1953 just as Holden was phasing out its first FX model in favour of the popular FJ that became both a hot seller and a national symbol.

By the end, three generations of the Lee family had worked there, but John Lee sold his share of the business to his brother David about eight years ago.

David Lee, who was running the business at the time of its closure, did not talk to The Age except to confirm the company's problem was a lack of finance.

"No one wants to lend money anymore," he said.

THERE were no credit companies financing the now contentious floor plans in the early years. If a dealer wanted to sell a car it first had to buy it outright from the manufacturer and John Lee remembers catching the train or even hitching to Melbourne to pick up a new car from the factory.

"If you stood by the side of the road with the dealer's trade plates you easily got a lift, everybody wanted to help."

Then in the prosperous '70s they used to race Toranas when the snorting XU1 model took the town's name around the country, even to Bathurst, as part of the Mollison Kyneton racing team. They also won numerous state rally championships from 1970 to 1976.

"They were good times; we even sold cars to people from Melbourne. If we had a purple one or a silver one and people could not get that colour in Melbourne, they would come up and buy it from us."

Now the empty showrooms have meant about 15 people are directly out of work with the future of many others uncertain. In a microcosm of how the car industry affects the greater economy, Roger Jukes, who runs the local tyre and battery supplier, believes the closure will cost him $80,000 a year.

"We supplied all their tyres and batteries, another company provided lubricants and one of the smash repairers did the detailing on their used cars," he says.

"All that will be gone and in those businesses alone the cost will be at least $250,000."

But Harvey believes the cost will be much greater. "First there is the loss of about 15 jobs and when they go their skills are often lost to the town," the Mayor says.

"But it isn't just the loss of the car sales when a dealership closes, neither is it just the servicing and repairs. When country people get their car serviced they often make a day of it when they come to town. They will have lunch at a local restaurant or cafe and do shopping.

"The ladies might buy some new clothes, the men some new boots and they might get a haircut and the ladies visit the hairdresser and so it goes on.

"Now to buy a new car they will go to Sunbury or Bendigo. With new cars, you have to go back to the dealers for servicing or warranty problems. We might have some small backyard service businesses still operating in town, but they are unlikely to be used for servicing your new car."

When Harvey moved into the town 25 years ago there were stand-alone dealerships for five makes — Mitsubishi, Mazda, Ford, Holden and Toyota. With Mollison's closure all that is left now is a small branch dealership for Ford.

John Lee says that when his father started in the business there was an even greater choice of new cars available. "In the late '50s there were 15 or 16 car franchises in town and six fuel depots. They were mainly English and American cars with a few European — Hillman, Austin, Chrysler, Plymouth.

"Then gradually the smaller dealers got forced out with more people buying cars in Bendigo or Melbourne.

"It was a real country town with tractor repairers as common as car dealers. There were other big employers in town too, a VDO factory that made automotive instruments, the John Brown sock factory, Ajax Pumps and an abattoirs, all gone now.

"These days it is a bit of a dormitory place with many people commuting to Melbourne. If you go to the railway station in the morning you can't park your car. So when you have people who work in Melbourne, they don't necessarily feel a loyalty to the town, they will buy a car where they work."

AS WELL as the success of their Toranas, another change happened to Mollison Motors in the 1970s they began to sell Toyotas, a joint dealership that continued until two years ago.

"Toyota were tough, whereas GMH gave you some flexibility, but with Toyota it was their way or not at all."

The 1970s was also the period when the manufacturers introduced the floor plan, financed by companies they often controlled themselves. John Lee says it came as a bit of a shock. "We had to lease the cars in our showrooms from the finance companies and if that wasn't bad enough we then discovered if we didn't sell a car within three or six months, we had to pay for it outright. Dealers were not given a choice about floor plans, they were forced upon us."

His words seem ironic now. When it suited the big companies they imposed their finance arrangements on dealers. Then when times were tough, floor plans were literally ripped from under them.

Now the Mollison Motors business is gone. Others are frightened of following.