Despite a recommendation to approve parallel imports being knocked back by Prime Minister Malcolm Turnbull only several months ago, the government now plans to allow the parallel/grey import of vehicles into Australia from 2018.
Highlights of the changes include:
- Individuals can now import one new car every two years
- Each parallel import must be 12 months old or less, and must have travelled less than 500km
- Imports will only be allowed initially from the United Kingdom and Japan due to high safety standards and right-hand drive
- Changes will be made to the import of classic and convertible cars over 25 years old, scrapping a historic $12,000 duty on imports.
According to The Guardian, the changes to Australia's vehicle import policy were announced today by major projects minister Paul Fletcher, with the expectation that around 30,000 Australians will access the scheme per year.
“It is true car dealers are not enthusiastic about this change, but we expect the quantity of imports to be modest,” he said.
“Most Australians will continue to purchase cars directly imported by manufacturers and sold through their existing dealership network.”
Australian Automotive Association chief Michael Bradley, said that the change in policy should also reduce the price of vehicles locally and help increase consumer competition when it comes to purchasing.
"[The decision is] a big win for consumers and a decision that will open up choice and increase competition within the Australian car market,” Bradley said.
“It will also produce environmental and safety benefits because it will encourage faster renewal of Australia’s vehicle fleet.”
“Australia’s private car fleet has an average age of 10 years, which is quite old by global standards and the fact that Australians often pay over the odds for new cars plays no small part in this,” he said.
In addition to the approval of parallel imports from 2017, imported vehicles will no longer have to affix identification plates, which is expected to save the industry around $70 million per year, according to Fletcher.
A 2014 survey by the Australian Automotive Association found that vehicles in Japan were around 20 per cent cheaper than in Australia, while vehicles from the UK were more expensive.
What does the local industry think about these changes? They're not happy. The Federal Chamber of Automotive Industries (the FCAI) said that the changes are "misguided" and show a "complete disregard" for the consequences.
“Currently, consumers are offered the highest possible level of consumer protection when it comes to purchasing a new motor vehicle through an Australian dealership,” said chief executive Tony Weber.
“Brands selling in this country make substantial investments in Australia by way of dealerships, workshops, technology and training to support and service their products.
"This means consumers can be certain their vehicles can be serviced and repaired appropriately, and that recalls are captured so consumers are informed if something needs to be fixed.”
"The system is also underpinned by the Australian Consumer Law."
Spokesperson for Mercedes-Benz Australia, David McCarthy, disagreed vehemently with the changes last year, suggesting impact on the industry would be high.
“Mercedes-Benz and the industry have made our position very clear in submissions to the commission enquiry, statements and submissions to the minister,” McCarthy said.
“There is certainly no guarantee that the consumer will enjoy the same level of protection that they currently do.”
McCarthy also said that “there is zero daylight between our position and the industry position on consumer protection. There is a robust system that exists in Australia and has for decades. We accept that, back that and are part of that”.