Kia exec would give private importers ‘free kick’

KIA Motors Australia (KMAu) chief operating officer Damien Meredith has revealed that he would take a proactive approach and consider offering shorter-term warranties to people who privately import Kia models if proposed changes to Australia’s parallel import laws are introduced.

Emphasising that the issue “hasn’t been discussed internally at length” at KMAu, Mr Meredith said the proposed regulatory changes were not likely to have much impact on the South Korean brand, with premium marques to be more heavily targeted.

However, offering a shorter-term warranty – over, say, three years rather than Kia’s usual seven – could be a way of getting the privately imported vehicles into dealerships for an initial assessment to ensure they fully comply with Australian standards and/or expectations of the brand in Australia.

According to Mr Meredith, this could be the best outcome for cars brought in from manufacturing hubs such as South Africa and India, where the cars might be produced at a different standard or level of specification to those normally expected in Australia.

“First thing is, I don’t think we will be affected greatly,” Mr Meredith told journalists at a media event in Melbourne last week.

“Second thing is that … if they do come – this is my view and it hasn’t been discussed internally – we have got a seven-year warranty … (and) I would give the importers a free kick.

“I would say, ‘Take your car to a Kia dealer, get a 101-point check and if it is okay we will give you three years’ warranty.’“That is my personal view, and I think that is the best way to overcome any issue whatsoever about a them-and-us situation.”

Mr Meredith said he expected the proposed changes to be passed through parliament and introduced if the Turnbull government is re-elected.

“It’s probably easy for me to say because I don’t think we will be affected, but if we are, we will be ready,” he said.

Federal minister for major projects, territories and local government Paul Fletcher announced the planned changes in February this year and, if passed, will come into effect from 2018 – after Ford, GM Holden and Toyota have all closed their Australian manufacturing operations.

The laws will allow consumers to buy a car or motorcycle from another country as long as it has “comparable standards” to Australia’s.

Buyers will be restricted to making purchases up to once every two years, per person, as long as specific requirements are met, according to a government statement.

The countries that consumers can import vehicles from would be strictly limited to right-hand-drive markets, with the government specifying Japan and the United Kingdom, and the vehicles being imported must be no more than 12 months old and have no more than 500km on the odometer.

India is also a right-hand-drive market, where Kia is understood to be planning a major manufacturing initiative – potentially in collaboration with sister brand Hyundai, which already has a presence on the subcontinent.

Notably, Hyundai Motor Co Australia (HMCA) has decided not to sell the Indian-built ix25 small SUV in Australia – one of the fastest-growing segments in the market – due to its inability to meet a five-star level of safety as set down by the Australasian New Car Assessment Program (ANCAP).

That said, HMCA has sold Indian-built vehicles here in the past, such as the previous top-selling i20 light car, and was forced to pass on the new-generation model when its manufacturing base shifted from India to Turkey.

Industry bodies including the Australian Automotive Dealer Association (AADA) and the Federal Chamber of Automotive Industries (FCAI), as well as several car manufacturers including Mercedes-Benz Australia/Pacific, have come out against the planned changes to import rules, arguing that it would allow a flood of vehicles into the country that are not designed for local conditions and not covered by manufacturers’ warranties.

Independent senator Nick Xenophon also recently weighed in to the issue, saying that the laws would have an adverse effect on automotive retail businesses in Australia.