There are several factors, which  are necessary in the running of an automotive company and workshop. A business owner has a responsibility of ensuring that he or she connects with other groups.  The focus of this discussion is to study the factors that affect the automotive industry in New Zealand. In this project, I will examine these factors in relation to MO2FIX service center in Auckland. The paper will focus on the major points that concern automotive company, which relate to financial, counseling, individual and collective contracts. Other contracts include the lawyer’s contract, advertising contract, cleaning contract, waste contract and accounting. Besides the contacts, the discussion will include the role of council taxes, lease finance, bank loans, warranty insurance, vehicle insurance, building insurance and public liability insurance in the industry. The paper will also argue on the significance of membership in professional bodies in the automotive industry, such as MTA, CRA, ACC, VTNZ, and AA (Thiessen, 1989).

Trade Finance

Trade finance refers to the facilitation of a business in terms of financial support to ensure that the business is running smoothly. It refers to the assuring of the well-being of a business when encountered with challenges which could bring it down. Trade facilitation aims at dropping transaction cost and time by reorganizing trade procedures and processes. Among the most significant challenges for traders in the transaction is finance securing so that the transaction may take place. The sooner and easier the process of financing the transaction is, the more the necessity of trade will be (Motor Trading Association, 2000). Trade finances are the types of finances that are available to the automotive sector and that facilitate in boosting the net worth of the company. At this level, the focus will be on the types on public finance, insurance and professional affiliation for the motor industry.

Trade finances can be categorized into various groups as used in the markets. They include derivatives, trade financing instruments, export credit insurances and export credit guarantees. A derivative is any financial instrument, the payoff of which depends directly on the value of an underlying variable. Derivatives are promises or contracts to sell or buy an asset later  with the same  price, quantity, and other specifications. The automotive sector uses these contracts to hedge against risks.

The export credit insurances safeguard the owner of the business against clients who may reject products that have already been exported to them. In this case, the exporter (the automobile industry) is likely to face shipping losses if the importer does not play his or her part to complete the transaction. Export credit guarantees protect the bank which has serviced the automotive industry to sustain the business; this works with the companies which have been given loans by banks. Trade financing instruments include documentary credit, counter trade, factoring, shipping finances and credit suppliers. In this context, MO2FIX has to pay attention on the particulars about the clients they are dealing with for every transaction. That is for both imports and exports of vehicles and spare parts. In case, there is a sign of corrupt business contact the company can involve their legal representative.

Insurance policies at MO2FIX service center in Auckland  play the same role as different trade finances. They also act as a measure of mitigation in case  of a risk occurrence. In addition to financing issues, the automotive sector is also subjected to risks, which can be either  political or commercial. Liquidity risks arise from factors like non-acceptance of goods by clients and declining of banks to honor documentary credits. Risks arise also from political factors, like war, riots and civil turmoil, blockage of foreign exchange transfers and currency depreciation (Gartner, 2006).

The automobile sector today uses a new way of mitigating loss through hedging. For firms with foreign transactions, their value is likely to be influenced by the exchange rate performance over the year. Assuming a firm with a long position in the foreign currency has sales, the rewards of hedging will be greater in the year the dollar appreciates. Hedging is comparatively less beneficial in the year the dollar depreciates to non-hedged firms than to the hedged firms.  Hedging adds value to firms during both, the dollar's appreciating and the dollar's depreciating stage. It becomes clear that hedging payment is much greater during the years the dollar has appreciated, and this is beneficial to firms in the process of mitigation against risk.

Professional Bodies and Membership

Professional bodies aim at protecting the public by keeping and enforcing standards of training and ethics in their line of work. They act like a labor union for the members of the profession (Governor-General, 2003). Examples of professional bodies in the automotive sector are AA, Motor Trade Association (MTA) and Collision Repair Association.  The associations provides to its  members with information on emergent technological innovations and any variations made to the regulations that affect the industry, so that they could offer better services to their customers. MO2FIX service center in Auckland is under  Motor Trade Association.  It also faces the standard and regulations of Motor Trade Association.  In addition, MO2FIX gets benefits from this association by having the best service providers in vehicles repairs, alternative fuel specialist, and  vehicle sales.  An independent audit takes place in the organizations under the association, and if any of them fails, then they face the risk of being removed from the program (Collision Repair Association, 1998).

Lease Finance

Leasing involves the use of a person’s asset, and, in return, makes periodic remittances. When leasing a car in the MO2FIX service center in Auckland, only a portion of the vehicle’s cost is going to be paid (Governor-General, 2010). Therefore, in Auckland leasing is a form of financing and not the same as renting. Lack of enough information to many clients confuses them where to buy or to lease, but leasing always remains the best option. MO2FIX service center in Auckland has established customer’s relations department to educate the customers in order to reduce the confusion.

Vehicle Insurance

Loans are offered at a cost to the automotive industry which is the interest rate, but is much lesser than the corporate interest rate, and this encourages the automotive segments. In  most automotive workshops, there is a high risk of losses. Therefore, insurance of the property in these workshops is mandatory.  In addition, insurance can play a vital role in the issues that concern security failures. In cases of theft, the company is assured that  all losses will be covered (McLeod 2010). These types of policies are imposed by the New Zealand government and are compulsory. The Third Motor Policy is an example of public liability insurance (Satyanand, 2010).

At MO2FIX, the workshop is insured by Capricorn. Capricorn ensures that all equipment, vehicles, and spare parts are safe. Capricorn provided an addition to its members as the issue of security in the workshops rose. Capricorn then came up with an insurance policy for its members to offer protection in the workshops. In this regard, Capricorn has gained more members in Australia due to the protection that is made to fit the needs of an automotive industry. In addition, Capricorn can also decide to insure companies which are at risk of serious losses such as fire and theft (West 2011).

Individual and Collective Contracts

Working in a workshop can be extremely involving. The individuals who will have obtained  contracts to work in the workshop should be people strong people that are alert at all times. One of the most attractive features in MO2FIX service center , is the interrelationship at the enterprise and macro economical level. A recent incident, which slowed down business, is the workers strike of NZ steel due to the poor working conditions. Such happenings are a high risk to the automotive industry. In addition, employees are retrained to enhance performance, and productivity in vehicle assembly (A guide to automotive Workshop safety 2004). Therefore, it is noteworthy that MO2FIX takes care of the workers as per the terms and condition set in the contract with the workers or the service providers.

Council and Taxes

Automotive industries have to ensure that they pay taxes to the relevant authorities in New Zealand. The MO2FIX is currently actively paying three types of taxes. These include profit income tax which is paid yearly, employee’s monthly taxes, and the ACCC tax that is paid every six months. However, ACCC plays a significant role in tax implementation. The issue of taxes has interfered with the pricing of the vehicles. That is, due to the taxes induced to these automotive industries, the car sellers have  a hard time in determining the prices of vehicles and the spare parts (Wilks 1988).


MO2FIX has involved its marketing teams in advertising it to the world market at large. The company has used internet marketing to publicize its products and services. In MO2FIX, advertising has been put on social sites, such as Facebook. The company also has a website which advertises the company to the world market (WOF Aukland  2011). They have also involved promotion strategies e.g. calendars, T-shirt and pens. It also does marketing in some malls e.g. Winz. In these sites, the company advertises all spare parts, vehicles, and other maintenance services.


MO2FIX has contracted several companies, which have taken the responsibility of servicing their business in cleaning and disposing all waste matter from the workshop. The aspect of cleaning in the workshop is vital. In the workshop, there are high chances of fluid leakages e.g. battery fluid. Some of these fluids are slippery and can be hazardous. Hence, it is necessary to have cleaners in the workshop working all the time to maintain cleanliness and hygiene at all times (A guide to automotive Workshop safety 2004). The team responsible for cleaning can also be given the duty of ensuring that hanging and moving objects are at safe distances from the people.

This table shows the common waste in MO2FIX workshop and the contractors who give the service to MO2FIX.


Type of waste

Method of waste disposal

Quantity per month


Waste fluid

Collect by  Salters Cartage Ltd for free

400-600 Liters


Brake fluid

Collect by  Salters Cartage Ltd for free

4 Liters







Sales to J.J.Laughton  

80 Tyres



Sales to Auckland Metals

4 Batteries



Give it to Salters Cartage Ltd for free




Auckland City Council




Auckland City Council




Sales to Auckland Metals




Collect by  J.J. Richards



Oil Filters

Sales to Auckland Metals




In the automotive industry, lawyers are essential.  This is because they play a vital role in the company. The company deals with many issues that may require legal intervention. For instance, in signing contracts with other service providers. In addition, the lawyer plays a crucial part in the hiring of workers (Walawender 2011). Hence, it is worth noting for such a leading company to have a legal representative. On the other hand, the lawyer comes in handy when the company is encountering disputes or losses by other external factors. MO2FIX has its own legal representative who stands for the company at large with matters that concern its well-being.


MO2FIX has an advantage in the accounting sector. The company has a contract with Capricorn. Hence, Capricorn provides MO2FIX with all the necessary services that concern accounting as lone of the benefits, which come with the contract. Capricorn also provides information to MO2FIX with, which is needed in running a typical workshop. In addition, Capricorn provides MO2FIX with financial statements, advices and solutions for issues which concern its finances (Capricorn society Limited 2010).


The automotive industry is the one that has to be well thought of before starting the business. A proper business plan comes in handy while organizing the links and connections with other businesses that will facilitate the automotive company at its grass roots and beyond. MO2FIX automotive company is one of the companies which produce the best vehicles. The company is dedicated to giving the best services to its clients in New Zealand and the world at a large scale. It has partnered with other automotive companies, so that they could give the best products and services to buyers.  In addition, the company has ensured that it has involved itself with all the necessary insurance boards, which facilitate its daily operations. In this regard, the company is assured of its tomorrow in service, and the clients also have a chance to trust and do business with MO2FIX.    

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