Uproar over car import changes

PROPOSED changes to the laws governing the importation of new vehicles have been loudly condemned by some sections of the automotive industry, that claim the government’s attitude of “buyer beware” is reckless.

Some consumer-oriented groups have applauded the move, but a number of key industry figures believe the changes will be vulnerable to abuse and criminal activity by removing consumer protections and the ability to effectively identify a vehicle.

The minister for major projects, territories and local government Paul Fletcher announced proposed changes to the Motor Vehicle Standards Act that would allow consumers to import cars from some right-hand-drive markets providing they are no more than 12 months old and have up to 500km on the odometer.

Mercedes-Benz Australia/Pacific senior manager public relations, product and corporate communications David McCarthy highlighted the German car-maker's concerns around safety and protection of the consumer.

“Our concern is that safety and consumer protection are paramount,” he told GoAuto.

“If you import a car from the UK, Australian consumer law will not protect you.

You are on your own, and the government acknowledges as much.

“In a Motor Vehicle Standards Act overview brochure on the department’s website, the government recommends that buyers purchase insurance to cover warranty claims, repairs and safety recalls.

“Who is going to insure you for a safety recall?” Mr McCarthy asked.

Mr McCarthy noted that former Liberal party minister Jamie Briggs had previously admitted in a radio interview that the “buyer beware” dictum would apply to buyers importing cars themselves.

Mr McCarthy went on to say that another issue of concern is the plan to do away with compliance plates, which indicate the standards each particular vehicle meets.

Instead, the government says it will save the industry $18 million a year by creating a database of cars in which every new vehicle’s details will be entered.

“This database is non-existent, ill-defined and unfunded. Where is it, who’s going to operate it, what’s on it?“The big worry is, if a vehicle doesn’t have a compliance plate on it, how does the government know, how does the customer know, that that vehicle meets the global standards the minister talks about?“There are 197 countries in the world, only 57 of them comply with the global standards.”

Mr McCarthy acknowledged that the minister indicated that right-hand drive cars meeting Australian standards are available in England and Japan, but the lack of compliance plates makes this meaningless.

“How do you know it meets UK type approval? How do you know it hasn’t come from India or South Africa? How do you know it’s not stolen, how do you know it’s not a write-off, how do you know it is not under finance?“All of this, I would say, the government couldn’t care less about because, for consumer protection, they are recommending you buy insurance for warranty, repairs and safety recalls.

“They want to make things easy. You know who they are making things easy for? Crooks, shonks and Arthur Daley. And the Yakuza. That’s who they are making it easy for.”

Mr McCarthy said he believes the government appears to have made its decision based on a hunch, or the wishes of some consumers who think they can buy a cheaper Porsche or Ferrari overseas.

The changes announced by the minister for major projects, territories and local government Paul Fletcher were not accompanied by a Regulatory Impact Statement (RIS), which is a compulsory document that explains the implications of a proposed law change, according to Mr McCarthy.

“My source in the department told me the RIS will only appear when the legislation is drafted. Hang on, the RIS comes before you release the legislation, not afterwards,” he said.

“What is the basis on which they made this decision? It’s actually about getting potentially cheaper cars for fat-cat mates and the implication is that those people and other people are going to be at risk.”

The decision also drew a sharp reaction from leading sportscar importer, Porsche Cars Australia (PCA), which said the “downsides are endless” for consumers and the motor industry.

PCA public relations director Paul Ellis reiterated Mr McCarthy's concerns and said such cars would not be covered by the industry’s safety recall protocols, meaning the vehicles could fall through gaps in the process, potentially posing a danger to both their drivers and other road users.

He said cars imported by manufacturers were also specifically designed and engineered for Australian conditions, including vital cooling systems for the hot-weather climate.

“We as an importer are not able to offer a warranty on such cars, meaning a potential consumer issue.”

Mr Ellis said car theft gangs operating in the United Kingdom routinely shipped stolen cars overseas, and without proper controls, there was potential for such cars to end up in Australia.

“The Australian government potentially is inadvertently creating a market for stolen high-end luxury cars,” he said.

The Federal Chamber of Automotive Industries (FCAI), which represents all domestic and international car-makers, also pointed out that the government failed to acknowledge the possibility of buyers acquiring a vehicle that does not operate as required in Australian driving conditions.

FCAI executive director Tony Weber said the proposal had implications for Australian consumers, border security and quarantine, dealers, service networks and the automotive brands that invest in tools, training and technicians needed to service motor vehicles.

“If the government is so concerned about car affordability, it should look at the taxes and other government charges that make up around 20 per cent of the price of new cars in Australia,” he said.

“Fixing those tax arrangements, including the poorly designed luxury car tax (LCT), is a better, more targeted way of addressing car affordability.”

The Victorian Automobile Chamber of Commerce (VACC) weighed-in on the debate saying the government’s definition of a new car did not match the definition used by the industry.

VACC chief executive Geoff Gwilym argued the government was actually going back on its word because it was now proposing to allow used vehicles to be imported.

“A new vehicles has less than 10kms on it, not up to 500kms, and it certainly is not up to 12 months old,” he said.

“This proposal still brings the same problems as we have pointed out in the past. Where do you take a car that needs repair? Who is the conduit when the car has problem.”

He said a consumer might buy a car from Japan that has been made in Taiwan and is not fitted with the additional requirements for Australian conditions.

“Buyers will be unable to find parts and not be able to get service. And when there is a bad news story, you can be sure it will be an automotive problem, not a government problem.”

In contrast, the Australian Automobile Association (AAA), which represents the state and territory motoring clubs including the NRMA and the RACQ, said the proposed changes would give Australians more choice and help drive down car prices.

“This is a big win for consumers and a decision that will open up choice, help put downward pressure on prices and increase competition within the Australian car market,” AAA chief executive Michael Bradley said.

Mr Bradley said he believed the proposed changes would bring safety and environmental benefits because it would encourage a more rapid renewal of the Australian car fleet.

“Australia’s private car fleet has an average age of 10 years, which is old by global standards. The fact that Australians often pay over the odds for new cars plays no small part on this.”

The Australian Automotive Aftermarket Association (AAAA) executive director Stuart Charity also added his support to the proposed law changes.

“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,” he said.