As reported in The Australian, the Abbott Government is considering allowing personal imports of overseas vehicles, provided they are less than a year old and have travelled under 4,000 kilometres:
Assistant Infrastructure Minister Jamie Briggs, who has been consulting on changes to the Motor Vehicle Standards Act, said the government also wanted to harmonise Australian standards with international guidelines “as quickly as possible”.
“We want Australians to have access to the best possible vehicle fleet, the safest vehicle fleet and the cheapest vehicle fleet they can get access to. We want a competitive market,” he told The Australian.
Mr Briggs said the Act had not been reviewed since 2000 when 75 per cent of the country’s new vehicles were manufactured in Australia, compared to eight per cent today and “all but zero” expected in 2018.
Predictably, the proposed reforms have been met with resistance from the Motor Traders Association, which promptly released a media statement warning of dangers to consumers:
“If this Cabinet decision is upheld, anyone could realistically purchase any new car from any marketplace without realising the full upfront costs of purchasing and importing; not to mention the ongoing service costs of the vehicle,” Mr Unerkov said.
“And their simple response of ‘buyer be aware’ is an inadequate response from government.
“This decision will open Australian consumers to potential scams, unusable warranties, exorbitant service/repair costs and at the extreme, vehicles which are unable to be serviced in Australia due to a lack of knowledge, skills or available parts,” Mr Unerkov said…
“So we say to consumers, ‘be aware’ of the Government’s policy and the long term impacts it will have,” he said.
If anything, the Coalition’s proposed reforms do not go far enough, and should also allow the importation of high quality second hand vehicles, as occurs in New Zealand, where used imports represent around two-thirds of all vehicle registrations in a year, with most imports coming from Japan.
With the local automotive industry scheduled to shutter by 2017, there will no longer be any justification for punishing Australian consumers with over-inflated car costs. New Zealand consumers have gained greatly from opening its market to high quality Japanese used cars, lowering costs for consumers without compromising the safety of its vehicle fleet.
Indeed, the Productivity Commission’s (PC) report into Australia’s Automotive Manufacturing Industry, released last year, specifically recommended relaxing controls on so-called “grey” imports of second-hand cars, noting that Australian consumers are being fleeced, particularly when it comes to purchasing higher-end vehicles.
As reported by in the PC report, “a survey of prices for second hand Toyota Corollas found that vehicles of similar mileage were on average almost 20 per cent cheaper in New Zealand than in Australia”. Moreover, a 2005 study by researchers at the Monash University Accident Research Centre supported the safety efficacy of used imports, finding that “the used imports [into New Zealand] were as safe as those sold new when compared on a year of manufacture basis, and that the difference in crashworthiness performance between an average used imported vehicle and an average new vehicle was attributable to the date of manufacture of the used vehicle rather than its previous use in its country of origin”.
Nevertheless, that the Abbott Government is seeking to harmonise vehicle standards, as well as open up the market for near new cars (less that 12 months old and with less than 4,000 kilometres on the clock) is to its credit, and a big step in the right direction.