Testing Stations

Exit from lockdown timely for industry

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“It’s been a challenging time and we have had a reduction of 95 per cent in revenue” – Gordon Shaw, VINZ Executive Director.

The move to COVID-19 alert level three will provide “light at the end of the tunnel” for many parts of the automotive industry, according to Vehicle Inspection New Zealand (VINZ) executive director Gordon Shaw.

A number of businesses are now looking to rebuild their workloads after the level-four lockdown that was in force for nearly five weeks was lifted at 11.59pm on April 27.
Shaw says all VINZ’s 200 staff received their full salaries while the country was at alert level four, but the company was on the verge of having to ask them to take pay cuts if that situation had continued.

“VINZ made a commitment to pay all our employees at 100 per cent during the lockdown and applied for the wage subsidy – and we’re very grateful to government to have access to that,” he told Autofile Online.

“For VINZ it’s been a challenging time and we’ve had a reduction of 95 per cent in revenue. Thankfully, we’ve got a good financial base and have been a well-run business for 25 years so we can ride out these challenges, such as the stink-bug crisis and GFC. But that can only run for a certain amount of time.

“We’re at a point now where there’s light at the end of the tunnel and at level three we expect to be back to 60 to 70 per cent of the work that we would normally be doing.”

Shaw, pictured, expects VINZ to be in demand over the coming weeks as thousands of imported vehicles that have been kept in storage because of the lockdown can now be sent for entry certification and compliance. He predicts it will take about six to eight weeks to process all the cars awaiting such checks.

“There’s tonnes of stock waiting for entry certification and compliance. Level three allows us to start doing that so long as we follow specific procedures around social distancing and contact tracing.

“We’re not going to incur costs on overtime or working longer shifts to get through that backlog and will plan it around what we can normally do around a 40-hour week.

“We anticipate that come the end of May that backlog will be done and then there will be a bit of a gap because the buying has slowed down in Japan.”

Shaw says the limited availability of storage has created headaches for some companies and he hopes the transition to level three will help ease those problems.

“Our testing stations have limited storage and we’re all full. We also know logistics providers were looking for innovative solutions to tackle the storage issue.

“There’s a limited amount of storage across New Zealand, and in Auckland there seems to be a lot of pressure. However, once we get the entry-certification process going again vehicles can be delivered to dealers and that will create openings at storage facilities.

“It’s definitely been a challenge for everyone. Storage isn’t cheap and it can add to the angst building up for people during this COVID-19 situation.”

Another possible benefit for the automotive industry post-lockdown is talk of people showing a desire to drive rather than relying on public transport as the nation gets back to business.

“There are reports of consumers not wanting to be on public transport because of concern over the transmission of germs, so households are thinking about buying an extra car. If there’s a little positive coming out of the COVID-19 situation for VINZ, it may be more car ownership and that would mean more WOFs and certifications for us, which may generate new income.”

Shaw is looking forward to work picking up for VINZ under level three and says the company is also turning its thoughts to what business will be like when the nation shifts to alert level two.

He adds the past few weeks have not been easy for either the new or used car sector and it may bring changes to how companies operate in the future.

“The industry has responded well to the challenges of the lockdown and it’s good we can now all start working again in limited ways. Our national support office and headquarters staff are still working from home, but it will be good to get most of our business back on stream. Our attention now turns to level two, which we will hopefully get in mid-May.

“I think COVID-19 is going to be a catalyst for accelerating change. From a VINZ perspective, it shows we can run our business with people working in a home-office scenario.  Rather than saying we have to trial operating like this, we now know we can run our business remotely and COVID-19 will be a catalyst for some changes in that area.”

Shaw, who is also a director at JEVIC, says business for the pre-inspection company has continued in Japan but at a slower rate because of the coronavirus pandemic and the country’s recently declared state of emergency.

“Japan is about two to three weeks behind New Zealand for going into its state of emergency, but the supply chain from Japan to New Zealand remains open,” he explains. “There’s still the ability to buy vehicles in Japan, it’s just the volumes are lower.”

He says JEVIC and other border-inspection companies remain vigilant in their work since the Ministry for Primary Industries (MPI) withdrew Biosecurity New Zealand inspectors from Japan in March. He adds the transition has had little effect on the supply chain overall.

“The on-shore verification process seems to be working smoothly,” Shaw adds. “It just shifts the border back to New Zealand but the procedures are all the same as when MPI were in Japan.

“The MPI’s focus is here in New Zealand and the vigilance of all approved operators in Japan is to ensure stink bugs and high-risk things don’t come across the border.

“The worst thing would be for us to have vehicles inspected in Japan and then find a problem here, which would see the number of vehicles for verification ramp up and, in turn, slow the process down.”

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