As an advanced, sophisticated economy, Australia doesn’t need used car imports and the parallel import of new cars is very dangerous from the perspective of the consumer.
This is the opinion of the Federal Chamber of Automotive Industries (FCAI) chief executive, Tony Weber, speaking to AutoTalk yesterday.
Weber says the harmonisation of ADR’s is already quite strong in Australia without needing more easing of restrictions. He also reiterates claims that new cars in Australia are some of the cheapest seen anywhere in the world.
His comments come as a National Road Safety Forum – in which the FCAI was present – discussed putting the brakes on second hand car imports into the country, citing the example of New Zealand becoming a dumping ground for second hand cars which did not have appropriate safety standards in place, making it harder to service and recall any second hand cars labelled as ‘orphan cars’.
“We go back to the point of what does it do for safety and the consumer – you only have to look at the New Zealand situation to see what path Australia will go down.
The orphaned car situation, according to Weber, alludes to the notion of “private buyers bringing in a new car bought from overseas into Australia, which is outside the dealer network, and if it has a unique specification there will not be tools, trained mechanics, spare parts to service these cars, and the know-how from mechanics to fix these cars will be missing.”
“If there is an international warranty recall, which is not uncommon happening in 2014 – as cars push the barriers on safety and technology very often – how do you get picked up for a recall if you are outside of the network? It is a huge question and what does it mean for the owner?” Weber told AutoTalk.
Weber points out there are cases where some high end luxury vehicles may be cheaper to purchase in other markets, but in his view, “these are the cars that you will want to have within the dealer network of that particular brand because they require more and more specific knowledge and tools to maintain them.”
“The danger will be even more substantial according to Weber in the decades to come when vehicles get more and more technologically sophisticated.”
An options paper which canvassed a Productivity Commission proposal to allow the importation of second hand vehicles would be likely rejected by the government, assistant infrastructure minister Jamie Briggs told the forum.
“Clearly one of the most important factors in better safety outcomes on our roads is the age of the fleet. In this respect and given the risk of a decline in safety outcomes, we are not inclined to open the Australian market to second hand imports,” says Briggs.
In another move, but this time around new car imports, Briggs’ department is currently mulling the possibility of removing current Australian Design Rules (ADR) barriers restricting individuals from being able to purchase new cars from overseas. Currently a person cannot import a vehicle unless granted special approval, with only about 3000 cars personally imported each year.
In regards to easing restrictions on new car imports for private buyers, Briggs told The Australian last month: “Why shouldn’t consumers have the option to do that if there is no good safety reason why they can’t? There would be an element of buyer beware that people will need to be conscious of; it is a big purchase to buy something sight unseen.”
However, Weber told AutoTalk: “We basically have quite a high harmonisation level with UN standards at the moment, there’s only two unique ADRs’ in relation to motor vehicles, and we will continue to push in that regard. The issue for buyers, is if the car is specified for the operating environment in Australia.”
Weber welcomes the government’s backflip on second hand imports and says: “At a road safety forum you can’t have your cake and eat it too. You can’t have a government with a focus on safety and reducing injuries, and also be promoting second hand imports. The government realises this and has made a very sensible decision, in my view, to not to do that.
“We have a very competitive market with many brands, and competition leads to lower prices which is what we are seeing at the moment. Why you would actually ever change the current model by bringing in used vehicles would be a very strange decision in my view,” Weber notes.
Weber also points out that research carried out by the FCAI shows Australia is one of the most competitive car markets of new vehicles in the world when you compare it like for like.
“Many may argue that new cars are cheaper in other markets, and I’m sure there are some situations where cars are cheaper. But what you need to do is compare the same vehicle in two different markets, rather than the same vehicle with the same badge on it, because the specification levels are substantially different – we have seen this within the Australian market – let alone other markets,” he says.
“Our research shows that the vast majority of new vehicles are cheaper in Australia than in any other right hand market in the world. We will have eliminated tariffs on two thirds of vehicles coming into the country, once the FTA’s from Japan and South Korea are signed.”
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