The recommendation is part of the Productivity Commission’s final report on the Australian automotive manufacturing industry, released today.
The report recommends new rules for ‘grey import’ vehicles should not commence before 2018, should initially be limited to vehicles manufactured no earlier than five years prior to the date of application for importation, and should be limited to second-hand vehicles imported from countries that have vehicle design standards consistent with those recognised by Australia.
It calls on the Australian Government to accelerate the harmonisation of Australian Design Rules with the United Nations Economic Commission for Europe Regulations and the mutual recognition of other appropriate vehicle standards.
The report also recommends the Australian Government removes the $12,000 specific duty on imported second-hand vehicle from the Customs Tariff as soon as practicable.
Federal Industry Minister Ian MacFarlane today reiterated that no decision has been taken to relax the restrictions relating to grey imports.
“We have no intention of allowing Australia to become the dumping ground for other countries’ old second-hand vehicles,” a statement read.
“This issue will be considered in detail as part of the government’s review of the Motor Vehicle Standards Act 1989, mindful of the need to maintain the highest safeguards for consumers and the impact of any changes on the domestic car retail market.”
Federal Chamber of Automotive Industries CEO Tony Weber welcomed MacFarlane’s comments, insisting that Australia has the most competitive new car market in the world and that competition brings the latest environmental and safety technologies for consumers.
“With the significant year-on-year improvements in vehicle technology, it goes without saying that a newer motor vehicle fleet is better for consumers as newer cars are safer, more environmentally friendly and more reliable,” Weber said.
“We will continue to engage with the government about this matter.”
Earlier this month, GM Holden chairman and managing director Gerry Dorizas warned against the relaxation of grey import restrictions, telling CarAdvice a change in policy could cut Australia’s new vehicle market in half.
“I think it’s not only Holden’s business model [that it affects], I think it’s everyone’s business model,” Dorizas said.
“I think it’s not about Holden, [it’s] the whole business, whatever is going to happen to Holden is going to happen to everybody, in terms of residuals, in terms of older cars on the market, it’s just going to be a mess.”
The Productivity Commission also supports an end to government funding for the automotive industry when current support programs end, calling on the government to repeal the Automotive Transformation Scheme after the end of local production, the discontinuation of the Automotive New Markets Initiative at their scheduled closure in 2015-2016, and no replacement of the Green Car Innovation Fund after the final payments are made in 2014-2015.
It also recommends the Australian, state and territory governments should not provide any further ongoing or ad hoc assistance, including capital subsidies, to the firms in the automotive manufacturing industry beyond that already committed.