Plans to loosen laws preventing ‘parallel’ vehicle imports have largely been shelved as part of the federal government’s re-jigged Road Vehicle Standards Bill, designed to take effect in 2019.
As you may recall, representatives from the Turnbull Government early last year flagged changes to the extant Motor Vehicle Standards Act 1987, to allow parallel ‘grey’ importation of near-new cars from 2018.
The news quite obviously sparked fury and derision from key players from all Australian new vehicle importers, and their peak body, the Federal Chamber of Automotive Industries (FCAI) – though not all industry stakeholders were opposed.
“After further detailed work on implementation arrangements, the Turnbull Government has decided not to proceed with one element of changes proposed earlier, which would have allowed personal importation of new motor vehicles from the United Kingdom and Japan,” said today’s government statement.
Specifically, the proposal from last year would have allowed buyers to purchase any vehicle 12 months old or less and with fewer than 500km on the odometer, from right-hand-drive markets with equivalent standards to ours, once every two years.
The government argued then that would offer wider choice to consumers. The new car industry countered by saying Australia’s 60-plus brands for 1.2 million annual new vehicle sales was vastly more competitive and fragmented than most markets already.
Leading the just-announced decision to cull the former plan was Minister for Urban Infrastructure, Paul Fletcher MP, who replaced the ousted Jamie Briggs – a proponent of the plan to allow parallel imports – in July last year.
In a statement posted today, his office inferred that research into the issue backed up the car industry’s voluble – and, of course, partially self-serving – assertions that the plan would not stack up.
“That work has highlighted the cost and complexity of providing appropriate consumer awareness and protection arrangements, including investigation of each vehicle before it was imported to Australia; ensuring consumers were aware that the manufacturer’s warranty may not apply in Australia; and establishing systems to deal with a manufacturer’s safety recall,” it said.
“It would also have been necessary to ensure that subsequent purchasers of a vehicle, which had been personally imported into Australia as a new vehicle, were aware of this fact—and the consequences of this, such as the manufacturer’s warranty not applying.
“Weighing these issues up against the modest benefits of the personal import arrangements—including price reductions estimated to be less than 2 per cent across the market—the Government has concluded that the benefits do not justify the cost and complexity of this particular change.”
The news was welcomed by the FCAI, whose CEO Tony Weber said: “The industry has long held the view that personal imports are not in the interest of consumers, nor of the 236,000 people who are either directly or indirectly employed in the Australian motor industry”.
“Australia already has one of the most competitive motor vehicle markets in the world, delivering world quality vehicles and outstanding value for the consumer.
“To allow personal imports would have exposed consumers to enormous risks, which the Government’s own analysis has clearly identified.”
Mercedes-Benz Australia senior manager of corporate communications David McCarthy, a long-outspoken critic of the now-axed proposal, naturally also welcomed the news.
“What the minister said about consumer protection, that was absolutely on the money. We made that case pretty hard, how you’d deal with recalls, warranties, how successive owners would know their car’s history,” he said.
“It’s a good decision. In my 11 years at Benz I have never seen the market more competitive than it is now, so the consumer is well served by pricing in the market. It doesn’t matter which measure you want to use, cars have never been safer, or more affordable.
“It gives an industry that’s very capital-intensive at a manufacturer and retail level, it gives some certainty… it’s the right decision, and it’s based on good, sound evidence, not pie-in-the-sky nonsense.”
Additionally, the Australian Automotive Dealer Association (AADA) supported the decision to axe the proposal – obviously. Its CEO, David Blackhall, said the outcome was the result of evidence-based research.
“The AADA has been in close consultation with Minister Fletcher since the proposal to allow new car imports was first mooted. We have sincerely appreciated the Minister’s willingness to engage in productive consultation and to understand the many risks to consumers that such a plan might entail.”
Also part of the government’s proposed new Road Vehicle Standards Bill is the “streamlining and improving” of existing pathways for importing specialist and enthusiast vehicles.
This includes expanding the range of vehicles eligible for consideration as a specialist and enthusiast vehicle, with vehicles now to be required to meet only one of six eligibility criteria instead of meeting two out of four eligibility criteria as was previously required.
Over recent months, the government says it “has consulted extensively concerning these improved pathways”. The six eligibility criteria will be:
Commenting on this part of the plan, the FCAI said it saw merit in these changes, but added that it wanted to work through the detail with the government on elements of the revised scheme “to ensure the necessary consumer protections are in place”.
“The broad picture offered by the Government in its statement is one which now provides legislative certainty and clarity and most importantly, better protection for Australian consumers,” Weber said.
Did you see the proposed loosening of private import restrictions as a positive? Would you have been willing to source your own consumer protection? Or did the mad-as-hell car industry make good points?
Tell us your thoughts in the comments below.
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