Luxury taxes holding HSV back: Walkinshaw

HOLDEN Special Vehicles (HSV) owner and director Ryan Walkinshaw says the company could potentially double the output from its fast-growing vehicle conversion and enhancement operations if federal and state luxury car taxes were withdrawn.

HSV has become a significant player in the Australian automotive landscape in the wake of the 2017 exit of the last remaining mainstream vehicle manufacturers, Toyota and Holden, producing locally converted premium vehicles – the Chevrolet Camaro sportscar and Silverado pick-up truck, and on behalf of Ateco Group, Ram pick-ups.

It is also responsible for the significantly enhanced HSV Colorado SportsCat+ mid-size utility, and is looking to expand with further models.

All of the current models with which HSV is involved, except the Colorado, are subject to the 33 per cent federal luxury car tax where the threshold is currently $67,525, and many are also hit further by Victoria and Queensland’s respective “super-luxury” taxes that each kick in at $100,000.

“It’s a rough estimate, but we believe we could double our sales volume, particular in passenger cars, if we didn’t have the luxury car tax being levied on our products,” Mr Walkinshaw told GoAuto.

He said levying the taxes on HSV’s remanufactured vehicles actually contradicted the stated aim of the federal LCT, which was to encourage purchase of locally made vehicles.

“It’s a pretty difficult pill to swallow when you are investing so much in local manufacturing and employing 600 people,” he said.

Speaking to us after federal industry, science and technology minister Karen Andrews visited the company’s factory in Melbourne, Mr Walkinshaw drew a distinction between HSV’s vehicles, which are made elsewhere but extensively modified at its Clayton South plant, and the wide range of imported sports-luxury vehicles and supercars that also attract the taxes.

“It’s pretty tough to take,” he said.

“We are paying tens of millions of dollars in additional tax, a tax that was supposed to encourage people to purchase local products and not internationally produced products.

“We’re the ones producing locally and we’re getting taxed the same as the importers.”

Mr Walkinshaw said that if the taxes were withdrawn, sales would potentially double and employment would also rise sharply, if not directly in line with sales.

“It’s not incremental growth in jobs because there would be efficiencies achieved with the process, but there’s every possibility we could get very close to doubling job numbers,” he said.

HSV currently operates four assembly lines, one each for Camaro, Silverado, SportsCat and Ram, with the latter running three shifts a day.

The company has tripled employment and sales in the past two years, including the acquisition of the country’s second largest caravan-maker, New Age.

HSV completed the acquisition over a three-year period.

The acquisition came after HSV’s head of engineering, Joel Stoddart, left the company in 2013 to join Australia’s largest maker of caravans, Jayco.

He returned two years later – he is now director of engineering – and sparked interest at HSV in the growing caravan market.

“He came back to us and convinced us there was a lot of opportunity for someone with the disciplines and experience we have – design, engineering and manufacturing in the automotive industry – getting into the caravan industry and improving the products,” Mr Walkinshaw said.

The HSV chief said improvements could be made in almost every aspect of caravans, from styling to engineering and in manufacturing processes and quality control as well as servicing and in sales and marketing.

“We have only had management control of that business since June, even though we started purchasing it three years ago, and so now we are starting to roll off some of our new products and new improvements, which is pretty exciting,” he said.

Mr Walkinshaw said the caravan industry was only now starting to use technology to combat the problem of sway at speed and under braking.

“Yes, that stuff has been on cars for 30 years. It shows how far behind the caravan industry is. Just the basic stuff,” he said.

“We aim to be the leader in properly designed and engineered and manufactured caravans in this country over the next few years.”