On Monday, chief executive of the Federal Chamber of Automotive Industries (FCAI), Tony Weber, hilariously lobbied against allowing used (“grey”) car imports into Australia, claiming that there had been “instances in New Zealand where used car imports were linked to the Japanese mafia, the Yakuza, and instances where radioactive cars from the Fukushima nuclear disaster found their way to Russia”.
Today, Australia’s largest motoring club and car insurer, the NRMA, has farcically claimed that allowing grey car imports into Australia would see the Australian car market flooded with “pre-loved bangers of uncertain provenance”. From The AFR:
“We were … appalled by the likelihood of thousands of third-world clunkers being dumped on this market and flogged by dealers unaccountable to the brands whose car filled their rented lots,” NRMA president Kyle Loades told The Australian Financial Review…
Clearly, the NRMA has not given this issue much thought. Nor does it appear to have read the Productivity Commission’s (PC) detailed report into Australia’s Automotive Manufacturing Industry, which only recommended allowing grey imports subject to appropriate safeguards being in place (my emphasis):
The Commission expects that, in the long term, the progressive relaxation of restrictions on the wide scale importation of second hand passenger and light commercial vehicles would have net benefits for the community as a whole. Provided relaxing the import restrictions were undertaken within an appropriate regulatory standards and compliance framework, net benefits would arise through lower prices and/or improved product specification (vehicle features) as well as increased product choice and availability for vehicle buyers, including consumers, businesses and government fleet buyers…
If the policy change were designed to favour the increased supply of late model used vehicles, it could result in lower average vehicle fleet age and improved average vehicle fleet safety and emissions standards. Average vehicle standards could also improve in the new vehicle market if the additional source of competition encouraged vehicle manufacturers and importers to improve their product specifications, such as by adding advanced safety features as ‘standard’ rather than ‘extras’…
In the Commission’s view, the relaxation of second hand vehicle import restrictions should begin with vehicles under five years old (since the date of manufacture). The Commission considers that these relatively newer second hand vehicles would be the least likely to pose the safety, environmental and consumer protection concerns raised by some participants… The Commission also considers that second hand vehicle imports should be limited to source countries where vehicle design standards are consistent with those recognised by Australia.
The PC report also cited a 2005 study by researchers at the Monash University Accident Research Centre, which found 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”.
Hardly sounds like anyone is advocating allowing the open-slather importation of dodgy used cars from third world countries, does it, NRMA?
Moreover, as noted in today’s AFR article, New Zealand imports around 95% of its used cars from Japan, according to the latest NZ Transport Agency data. And the last time I checked, Japan was a highly developed country, thus making a mockery of the NRMA’s claims.
Thankfully, the Australian Automobile Association (AAA) – a peak organisation representing car insurers – disagrees with the NRMA’s position:
AAA chief Michael Bradley said his group has “consistently advocated for the relaxation of regulations relating to the importation of new and used vehicles.”
Mr Bradley said AAA’s position was “the position endorsed by the AAA Board, which comprises representatives of the Association’s seven state-based member clubs.”
As I keep arguing, the local car assembly industry is scheduled to close in 2017. And once it does, the rationale for restricting used car imports will disappear. The Government should, therefore, follow New Zealand’s lead and allow grey imports, thus increasing consumers’ spending power and potentially lowering the average age of Australia’s vehicle fleet.
There is simply no good reason for the Government to side with the automotive industry rent-seekers to the detriment of Australian consumers.
