ISSUE N0. 7 2011
INFOCUS
SUZLON GETS BEAUT UTES, THANKS TO TFM
Australia’s leading supplier of wind
turbines has acquired a specialised
fleet of four-wheel drive utilities with
the help of Toyota Fleet Management.
Suzlon Energy Australia is servicing its rapidly
growing wind power business with a fleet of
over 100 utes, predominantly Toyota HiLux,
equipped with accessories purpose-fitted
for its unique operations.
“We don’t just build wind farms, we also
service them and that’s where a lot of our
business growth is right now – which requires
an increasing fleet of vehicles,” says Suzlon’s
procurement manager Antoinette Brandi.
Ms Brandi says the decision to consolidate
the Suzlon vehicles into Fully Maintained
Operating Leases with TFM has increased
the efficiency and accuracy of the
company’s reporting.
“It is very important for us to gather data
and track the maintenance on our vehicles
to ensure we are meeting the safety
parameters, for OH&S reasons.
“We also need to ensure that we are
using genuine parts, and that we are not
compromising the vehicles with the amount
of safety modifications we have made to
the cars,” she said.
The flexibility of TFM products enables Suzlon
to specifically tailor the fleet to its needs.
“Our Account Manager worked with our
service and supply teams to develop safety
standards. He identified three different
vehicle types, each with its own level of
required safety equipment – flashing lights,
towbars, the correct tyres and towbars.
“This has made such a big difference to the
consistency of our vehicle standards.”
PROPOSED IASB CHANGES CAUSE CONCERN
New Lease accounting proposals
published by the International
Accounting Standards Board (IASB)
are overly complex and likely to
have a negative impact on vehicle
operators, according to Toyota Fleet
Management (TFM).
TFM says it is concerned about the
complexity of the proposed changes which,
if confirmed, would significantly alter how
leases are accounted for in Australia.
The lessee accounting proposals are currently
understood to include:
• all operating leases with terms of greater
than 12 months would be on balance sheet;
• an asset and liability will be shown on
balance sheet with the calculated value
using the present value of future lease
rentals (excluding the calculated market
value at lease end);
• fleet services would be recorded separately
(eg maintenance and tyre budgets) and
expensed in line with current practices.
There is discussion about a number of other
changes that have been recommended
by the IASB, including the treatment of
rental expense.
The IASB has proposed changing this
from a straight line to a principal-andinterest method, thereby “front-loading”
the interest component.
“We have communicated our concerns to
Ms Brandi says that TFM’s ability to respond
quickly to Suzlon’s requirements has been
most valuable.
“HiLuxes are in such high demand because
of the resources boom, and one of the
biggest challenges we faced initially was
securing the cars.
“TFM used its contacts across the entire
Toyota dealer network to secure cars for
us from all around Australia.”
the IASB, both directly and via the various
Australian leasing industry association
bodies,” said TFM’s senior manager of
finance, David Robinson.
“The proposed change to the treatment
of operating leases is a particular concern,
because of the potential effect it could have
on the borrowing ability of the company.
“The early indications are that the IASB
is responding to feedback and is already
modifying some of the controversial
aspects of the proposals.”
The final Lease standard is expected to
be published later this year, with January
2015 seen as the most likely date for the
changes to take effect.
David Robinson says further changes are
likely to the proposed standard before it
is implemented.
INFOCUS
FROM THE GENERAL MANAGER’S DESK
What a year it’s been so far. Floods, cyclones,
earthquakes and tsunamis have been in
the headlines for much of the first half of
2011, presenting unusual challenges for the
automotive industry and fleet operators alike.
We have been pleased to be involved in
assisting some of our Customers and Dealers
through the impact of some of these events
in Australia, and it has been rewarding to
see the ‘get up and go’ attitude of some
really adversely affected Customers –
you show a true Aussie fighting spirit.
I have also been amazed at the unbelievable
resilience of our parent groups around the
word. At the time of writing Toyota, Lexus,
Hino and Toyota Material Handling have
almost returned to normal production.
Toyota Fleet Management implemented a
number of strategies to keep our Customers
on the road. For example, we’ve extended
existing leases at a concession rate with
an easy swap-over at no cost when the
new vehicle(s) finally arrive. This facility
has been very popular with our Customers
and is a good example of everyone
working in partnership – Manufacturer,
FMO and Customer.
Personal Property Security Register
The Australian Government’s new national
security register is still scheduled to go live
in October. Called the Personal Property
Security Register (PPSR), it will replace all
of the various state registers for vehicles
and other assets.
While this is clearly a positive step, it has
important implications – particularly for
our rental company customers who are
leasing or hiring out TFM-funded goods
to their customers.
Not only does TFM need to register our
interest in the leased goods (the contract
between TFM and you) but you also need to
register your interest in the funded goods.
The effect of this legislation is that, if you
failed to register your interest and the end
customer failed, then your title to those
goods could be jeopardised.
We strongly urge you to seek appropriate
advice on how to manage this matter.
Changes in FBT
We recently wrote to you about the changes
in the FBT Statutory Fraction. At the time of
writing this column, the legislation has still
not been tabled.
This legislation was first recommended by
the Henry Taxation Review. Since it was first
mooted we have been of the strong view
that, although the tax benefits for certain
employees will change (for better or for
worse), Novated Leasing will continue to
deliver benefits for most and the growth of
salary packaged vehicle finance will continue.
As the Employee Contribution Method and
Operating Cost Method remain unchanged
these are options that will become more
important, particularly Operating Cost Method
for high-kilometre tool-of-trade vehicles.
Accounting standards
I wrote to you in the last In Focus about the
issue of proposed changes to accounting
standards. It is pleasing to note that since
then the Accounting Bodies appear to
have agreed to some of the amendments
requested by the industry; concessions
that we believe will give more certainty to
reporting entities. The draft of the standard
has been delayed beyond the originally
planned June date and its release is now
expected in the second half of 2011.
And finally …
Toyota Fleet Management finished our
financial year in March and I am pleased to
report that we have prospered, growing at
over 30 per cent for the third consecutive
year. As a result our portfolio now exceeds
$2 billion and over 80,000 units, making
Toyota Fleet Management the fastestgrowing FMO in Australia.
This could not have been achieved without
the considerable support of our valued
Customers both existing and new.
We thank you for that support.
TFM’s strategic focus in 2011 will not be
growth; rather we want to grow our existing
relationships and work closely with you to
further develop our relationships this year.
Ed Stanistreet
General Manager - Fleet Sales
Time to ditch the rego?
Fuel cards are an essential, convenient and
efficient tool to assist in the smooth running
of vehicle fleets. However, they do have one
weakness created by the convention of having
vehicle rego numbers printed on the card.
TFM have a KPI of five days to get the fuel card
to the driver. The challenge is to eliminate the
gap between the dealer notifying us of the
vehicle rego and ordering the fuel card –
but in practice this is very difficult to do.
Currently most fuel cards cannot be ordered
for a fleet customer until they receive a
registration number for the vehicle. This
creates a problem in that, by the time the fuel
card is ordered, received, processed and then
dispatched to the customer using conventional
post, the vehicle it belongs to may have
already been on the road for over a week.
Suggestion:
TFM ensures all new vehicles are delivered
with a full tank, or 75 litres, as a minimum.
This buys us approximately a week of travel.
However, if the driver doesn’t have a fuel
card the first time they need to re-fuel, they
end up having to use their own money or a
company credit card. This transaction then
has to be expensed, details reconciled against
the vehicle contract, and so on. It’s messy,
inconvenient and annoying to both the driver
and our customers.
There is an argument that a driver’s name
on the fuel card would also be a stronger
security measure as a deterrent to card
misuse. Fuel station cashiers can rarely
see the vehicle rego plate, let alone check
it against the fuel card!
It may be better to avoid the problem
altogether by having the fuel card carry
the driver’s name (as well as the company’s
name) rather than a rego number, and
perhaps a brief description of the car –
ie ‘Toyota Camry Blue’.
Think about it. When was the last time
you used a fuel card and the cashier
checked the rego number on the card
against the number plate on your vehicle?
If the card carried a name on it, the cashier
could potentially ask for corresponding ID
like a driver’s licence if they thought there
was anything untoward about the purchase.
Toyota Fleet Management knows of occasions
when fuel cards have been used to buy
unusually large amounts of fuel or 10’s of litres
of expensive oils – what better deterent?
This editorial does not suggest that the case
for replacing rego numbers on fuel cards with
driver’s names is beyond debate. After all,
no system is perfect. As part of Toyota Fleet
Management’s commitment to the continuous
improvement of its products and services we
want your feedback on this important issue.
To have your say email
tfm.feedback@toyota.com.au
INFOCUS
Miles in front
As well as being more user-friendly, the new
Miles system will also provide more speed
and performance, as well as even stronger
security and integrity of customer data.
Toyota Fleet Management’s Miles
project is on track for customer rollout in October after the specialist fleet
management and finance system
recently passed a crucial milestone.
“One aspect that we have focused heavily
on since the project’s inception is the
integrity of the system, especially the
integrity of our customers’ data. We are
going to great lengths to ensure that the
data is migrated successfully without error,”
Mr Boxsell says.
Miles hit its first targets, on time and on
budget, following the restructuring of the
project in January.
Validation processes are in place to ensure
the system is reviewed by internal end-users
at each stage of the build before moving on
to the next phase of development.
Business Requirements and Readiness
Manager, Phillip Boxsell, says that the
successful completion of the first build
stage is a crucial step towards meeting
the target for Miles’ launch.
“We have a very clear plan, we have the
right resources in place, we understand
exactly what needs to be done to deliver
the project on time and we have structured
the project accordingly.”
He says that, when fully operational, Miles
will consolidate the functions of existing
Fleet Management systems onto a single
system platform.
“Miles will streamline customer requests
by giving them access to their own
information through a secure web portal.”
Phil Boxsel and Danny Hua
Fleet and Novated Lease customers will be
able to create a quote for a new vehicle
contract, run reports and view information
about their portfolio of vehicles.
“Importantly for customers, Miles will
free-up TFM resources, allowing our team
to spend more time working to find more
efficient ways for customers to manage
their portfolio.”
“Our goal is that it will be business as usual
for customers during the roll-out of Miles,
and we will not go live unless we are sure
it won’t negatively affect them,” he says.
The second wave of the build is on schedule
and will be delivered by the end of June.
Training of the TFM team and customers are
key elements of the program launch, which
will be activated during September this year.
“All of our team and our customers will be
kept up to date with the progress of the
system development, training and roll-out
as each phase of the Project is delivered,”
Mr Boxsell says.
Motor Vehicle FBT Changes
We recently announced the Federal
Parliament introduction of a single flat
rate of 20 per cent to calculate Fringe
Benefits Tax (FBT) on vehicles under
the Statutory Formula Method.
Since our last bulletin The Tax Laws
Amendment (2011 Measures No 5) Bill 2011,
(the Bill), was introduced into Federal
Parliament accompanied by an Explanatory
Memorandum (EM) providing further details
of the May 10 announcement.
A Summary of TFM’s May bulletin notes that
no changes have been made to the Operating
Cost Method, stating that the new FBT rates
apply to new vehicle contracts entered into
after 7:30PM (AEST) on Tuesday, 10 May 2011,
but will be phased-in over the next four years
as detailed below.
Essentially all existing contracts will remain
unchanged. Any new contract entered into
ANNUALISED KM’S
after the effective date will have the new
rates phased-in over the next four years.
Full details of the changes are not currently
available, and will not be until legislation
is passed by Parliament. To enable customers
to continue processing transactions TFM
has taken the following interim strategies
and assumptions until the changes have
been legislated.
A “new vehicle contract” covers:
• a new or second-hand vehicle that has a
vehicle purchase order, a lease contract or
a finance contract (whichever comes first)
entered into after 7.30pm (AEST) on 10 May 2011
The new vehicle contract date is:
• New vehicles ordered by TFM on behalf
of the Customer
- the vehicle order date
• New vehicles not ordered by TFM
- the TFM Contract Start date
(also the Registration date)
EXISTING
CONTRACTS
10-MAY-11
7.30PM
01-APR-12
01-APR-13
01-APR-14
0 - 14,999
26%
20%
20%
20%
20%
15,000 - 24,999
20%
20%
20%
20%
20%
25,000 - 40,000
11%
14%
17%
20%
20%
40,001 plus
7%
10%
13%
17%
20%
he second-hand vehicle contract date
T
for vehicles new to the Employer is:
• The TFM Contract Start date
- Vehicles that are re-financed, extended or
varied or changing employer after 10 May
2011 are new commitments and therefore
will be subject to the new arrangements.
- If the changes are made part way through
the year, the new rates will apply from
the beginning of the next FBT year.
- Employers and employees who seek to
terminate existing contracts early and
immediately enter into new contracts
just to get the benefit of the new FBT
rates may be caught by the general antiavoidance provisions.
• Where TFM calculates the FBT liability for
new vehicle contracts the rates used are
shown in the column headed 10-May-2011
below. The FBT liability for these vehicles
in future FBT years will change for vehicles
travelling 25,000km or more, in accordance
with the table.
We will be issuing further bulletins when
the new legislation is passed by parliament,
and will seek further clarification and provide
updates, including a detailed analysis of
alternative strategies. TFM will comply
with the legislation and will make
adjustments to the contracts accordingly.
For more information on The Bill and the
EM please visit the Parliament of Australia,
Parlinfo Search website.
INFOCUS
FJ CRUISER EXCITES USER-CHOOSERS
and quality necessary for enjoyment as
both an on and off-road vehicle.
FJ Cruiser is powered by a 200kW, 380Nm
4.0-litre V6 petrol engine with five-speed
automatic transmission, part-time 4x4, an
electrically activated rear differential lock and
switchable Active Traction Control technology
to maximise off-road climbing ability.
It features impressive road clearance – a
36-degree approach angle, 31-degree departure
angle and 29-degree break-over angle. The
latter two dimensions are the best for any
vehicle in Toyota’s local four-wheel drive range.
Toyota’s new FJ Cruiser is proving to
be a popular novated lease vehicle,
generating strong interest among
those looking to take a vehicle as
part of their salary package.
Styled as a modern interpretation of
the classic FJ40 LandCruiser model of the
1960s, the funky new four-wheel drive
is proving popular among young men
looking for a vehicle that can combine
work with weekend recreation.
Toyota has retained the two-door appeal
of the original FJ while providing easy entry
to the second row of seats by incorporating
rear-opening access doors.
Using clever design, the B-pillars are built
into the access doors and support the upper
and lower front seatbelt anchorages.
Flexible seating can be folded or even
removed to expand cargo space and store
items up to three metres long.
Launched in the second half of March, FJ
Cruiser comes to Australia in a single grade
of specification, with all the equipment
Safety is a priority, with six airbags, vehicle
stability control, anti-skid brakes with brake
assist and electronic brakeforce distribution,
active front-seat head restraints and a
reversing camera with the display located
in the electro-chromatic rear-view mirror.
Other features include 17-inch alloy wheels
(including the spare), rear fog lamps, privacy
glass, rear parking sonars, cruise control,
air-conditioning, a premium steering wheel
with audio controls, multi-information
display, and central locking.
For FJ Cruiser’s music-loving customers,
Toyota developed a world-first where
the ceiling is an integral part of the
eight-speaker CD stacker audio system,
‘showering’ occupants with sound.
Fuel consumption will vary depending on driving conditions / style, vehicle conditions and options / accessories. Towing capacity subject to regulatory requirements, towbar design, vehicle design and towing
equipment limitations. Reversing Camera is designed as a driver assist device only and should not be used as a substitute for skilled driving and safe parking practices. The area into which the vehicle is to be
reversed must be visually monitored by the driver while parking. Parking Sensors are designed as a driver assist device only and should not be used as a substitute for skilled driving and safe parking practices.
The area into which the vehicle is to be reversed must be visually monitored by the driver while parking.
Clean and Simple FROM HINO
Hino has re-powered its 500 Series
standard-cab medium truck range to
improve fuel economy while continuing
to meet the tough Euro 5 emissions
standards mandated earlier this year.
ADR80/30 emissions regulations (otherwise
known as Euro 5) to the Australian market.
The Hino FC, FD and FE models are equipped
with the new five-cylinder J07E engine, which
delivers more power and torque and better fuel
economy than the previous six-cylinder engine.
Alex Stewart, divisional manager, Product
Strategy and Development, said Hino’s entire
500 Series made the transition to the new
emissions standards with relative ease.
The J07E is the latest in engine development
from Hino, offering leading-edge technology
that achieves increased fuel efficiency and
lower emissions.
“The standard-cab models have the new engine,
while the wide-cab FG, GH and FM8J models
have an improved version of the J08E engine.”
Hino was one of the first manufacturers to
introduce trucks capable of meeting the strict
Improvements made to the J08E six-cylinder
engine to meet Euro 5 standards include
Introduced in January, the regulations allow
for no more than 0.02 grams of particulate
matter per kilowatt hour, and 2.0 grams per
hour of nitrogen oxides.
breaking down pollutants in the exhaust
gases via a cooled exhaust gas recirculation
system (EGR) and a diesel oxidation catalyst
with a particulate filter (DPR)*.
*hino.com.au/Models_AboutEuro5.aspx?TabID=3
Regions
Contact Manager
Tel. No.
EMAIL ADDRESS
National Fleet/Rental
Glen Tomlinson
(02) 9430 0104
Glen.tomlinson@toyota.com.au
NSW/ACT
Chris Baillie
(02) 9430 0358
Chris.baillie@toyota.com.au
VIC/TAS
Gavin Jackson
(03) 9647 4046
Gavin.jackson@toyota.com.au
QLD
Gary Wilson
(07) 3853 8523
Gary.wilson@toyota.com.au
SA/NT
Andrew Nash
(08) 8291 3908
Andrew.nash@toyota.com.au
WA
Brian Mooney
(08) 9489 1007
Brian.mooney@toyota.com.au
GENERAL INFORMATION
toyotafleetmanagement@com.au
CUSTOMER FLEET MANAGERS
tfsfleetonline.com.au
Novated Drivers
novatedonline.com.au
GENERAL COMMENTS/FEEDBACK
tfm.feedback@toyota.com.au