Yesterday’s announcement that the government was planning to allow the private importation of new or near-new vehicles from 2018 may have been slammed by existing factory distributors, but not all of the car industry was up in arms.
The Australian Automotive Aftermarket Association (AAAA), the peak body representing the interest of the automotive parts, accessories, tools and equipment industry, has come out strongly in favour.
“This reform is in line with improving competition and consumer choice. It is also consistent with both the Productivity Commission and Harper Review recommendations for the future direction of the Australian automotive industry and the wider economy,” said executive director Stuart Charity.
“The AAAA made important contributions to these reviews with the aim of enhancing industry competition, while ensuring that public safety and consumer rights are protected.”
The AAA also said it “recognised the logic” in one of the proposal’s key stipulations — limiting personal imports to the right hand driving nations of Japan and the United Kingdom.
“The Government has recognised these markets as having similar safety standards to Australia,” it said. “This first move to de-regulate Australia’s vehicle market will benefit consumers by ensuring that the car companies sharpen their pricing,” it conjectured.
We (CarAdvice) would point out that this measure is billed as being about improving choice, not pricing, however. Even the government doesn’t expect prices to drop markedly.
For those not across yesterday’s news, the government’s plan to allow private ‘grey’ imports stipulates that: buyers can purchase any vehicle 12-months old or less and with fewer than 500km on the odometer, from right-hand-drive markets with standards equivalent to ours.
But you can only buy one car every two years, so you won’t see parallel businesses cropping up, save for brokerages.
The government argues it will offer wider choice to consumers, who will be able to purchase vehicles not sold here but which are available in the aforementioned markets. This might be an all-wheel-drive sedan, or a Japanese Kei car, or perhaps some variant sold at a cheaper price because it has a lower specification level.
In time, the government suggests up to 30,000 vehicles a year may be personally imported.
Below is our quick Q and A with a ministerial spokesman.
Local car importers aren’t obliged to cover warranties on private imports, so what are the consumer protections in place? Is it buyer beware?
Most vehicle warranties only apply in the country where the vehicle was purchased. Warranties are generally provided by automotive dealers as part of the purchasing package. The insurance industry has confirmed that it is in a position to provide warranty insurance to individuals seeking to import a new vehicle.
Consumers purchasing a new motor vehicle manufactured overseas from within Australia may be offered some protection under the existing Australian Consumer Law (ACL) protections. The Department’s website will include information on this to enable buyers to be informed prior to importing a vehicle. I note that there are many cars imported by individuals now, so this is not a new issue.
What are the ramifications in regards to safety recalls? They won’t be on each car maker’s databases…
The details of each personal new import vehicle will be contained on the new online and publicly searchable database, so individually imported vehicles will be more easily identifiable for recalls.
Will the luxury car tax cover parallel imports? One might suggest that if it won’t, it’s not an even playing field.
Yes the luxury car tax will apply to personal new import vehicles. It already applies to other vehicles imported to Australia.
Does the government acknowledge the potential risks to jobs within dealer networks here, which are often small businesses?
The Government does not expect a material effect on dealerships from the personal new imports scheme. More than 1 million new vehicles are sold through dealers now and we expect dealerships to continue to be the main source for consumers to purchase a vehicle.