PROPOSEDCHANGES TOFRINGE BENEFITS TAX17 July...

PROPOSEDCHANGES TOFRINGE BENEFITS TAX
17 July 2013
AutomotiveHoldingsGroup (ASX:AHE) advisesshareholdersthatthe proposed changesto Fringe
Benefits Tax provisions, announced yesterday by the federal government, are not expected to have
anymajor orsustained effect on theGroup'slong-termbusinessmodel.
AHGmanaging director BronteHowson said some ofthe headline reporting ofthe proposed changes
had been sensationalist and largely unsubstantiated.
"We read yesterday a headline thatsuggested the proposed FBT rules will cripple the carindustry,"
said MrHowson.
"Frankly the automotive retail industry hasseen similar predictions of doomand gloomfromthe
original introduction ofthe FBT to the carbon tax and the recentmanufacturing closure
announcements, none of which have sentretailsalesinto a tailspin.
"Novated lease salesrepresent a small, lowmargin element of our business,” he said.
"Theremay be some short-termeffects on the new carsector but AHGis well placed to capitalise on
the ongoing strength ofthe used vehiclemarket. We are strong in used carsales; our offering to
customersis broad and includesrevenue streamsfromnew, used,service, parts and finance and
insurance."
While acknowledging theremay be a degree of uncertainty overthe proposed changes until after
the federal election MrHowson said AHG's diverse income streams, including itsindustry leading
logistics businesses, provide a hedge against any reliance on the company's new carsales
operations.
If eventually enacted,the coststo business of compliance with the proposed changes will increase
andmay render novated leasesimpractical or unsustainable formany employers.
We anticipate employee salary packages and allowances will inevitably be restructured, however
companies with operationalfleetrequirements willstill purchase new vehicles and employees who
lose company vehicles willmostlikely buy their own vehicles, new or used, underrevised salary and
allowance packages.Subjectto how the specific FBT changes are applied AHGmay in fact benefitthroughmore direct
relationships with customers who presently purchase through novated leases, and the elimination of
marginsto intermediaries.
Currentlow interestrate campaigns offered by a number ofmanufacturers continue to supportthe
new carmarket.
MrHowson said AHG'ssignificantmarketshare and broad portfolio offranchise dealerships would
accommodate any change in consumersentimenttowardsthe type and price range of vehicles
preferred forfleet or private purchases.