As www.carshowroom.com.au reported yesterday, the Federal Government has proposed changes to the Motor Vehicles Standards Act which will permit private individuals to import new cars from either Japan or the United Kingdom.
We backgrounded in yesterday’s story that the risks to consumers were enormous: no warranty or after-sales service from their seller, no guarantee of spare parts availability, no way to check included safety features like side intrusion beams or airbags, no ability to check the history of the car being purchased (has it been crashed, is it encumbered by a finance deal from a previous owner) – just to name a few challenges to be faced by Australian buyers.
The proposed changes come despite more than two years of consultation with the automotive industry and were announced without warning.
And the proposal clearly undoes the excellent work put-in over considerable time and at great expense by Australia’s Motor Vehicle Theft Reduction Council to prevent dodgy cars entering Australia without the mandated Compliance Plate.
Reaction has been swift.
Under the heading of Consumers Sold A Dud On Personal Imports, Tony Weber, Chief executive of the Canberra-based Federal Chamber of Automotive Industries (FCAI) said: “Currently consumers are offered the highest possible level of consumer protection when it comes to purchasing a new motor vehicle through an Australian dealership. Brands selling in this country make substantial investments in Australia by way of dealerships, workshops, technology and training to support and service their products. This means consumers can be certain their vehicles can be serviced and repaired appropriately, and that recalls are captured so consumers are informed if something needs to be fixed.”
Despite the lengthy two-year consultation with industry, as we read the Government’s press release, it seems Federal Major Projects Minister Paul Fletcher is somewhat short on knowledge of how the car industry works: for example, different consumer requirements and legislative rules mean a Porsche sold in England (a right-hand-drive market like ours) will probably not be identical to the same model sold in Australia.
While Porsche Cars Australia is required by law to stock replacements parts for all models distributed by the company here, it is unreasonable and financially impossible to expect the company to also carry replacement parts for vehicles sold in the UK and Japan to the extent currently required under the Motor Vehicle Standards Act.
Yet there is no mention of changes to those parts of the Act which dictate the replacement parts which an automotive company must stock and for how long it must stock them.
At the thrust of Minister Fletcher’s press release is the statement: “a big win for consumers”.
The industry has major issues with that claim.
“In its announcement today, the Government failed to acknowledge that Australians who personally import a vehicle made for another country may end up with a vehicle that does not meet their needs or operate as required in Australian driving conditions,” Mr Weber added. “The best way to continue to deliver a greater range of choice in new cars and motorcycles is to accelerate the removal of unique regulatory standards and administration. 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. Fixing those tax arrangements, including the poorly-designed Luxury Car Tax, is a better and more targeted way of addressing car affordability than a change that will ultimately hurt consumers.”
And despite the Minister’s claim that consumers will be the big winners and up to 30,000 cars per year could be imported under the new proposal, industry experts agree that the outcome will in fact only be wealthy individuals importing premium luxury and high-performance machines.
So, in the absence of any official statements from the likes of BMW Australia, Audi Australia, Porsche Cars Australia or even Alfa Romeo Australia, Mercedes-Benz Australia Pacific has responded with typical detail and accuracy.
“Despite two years of consultation with the industry, the announcement was not accompanied by a Regulatory Impact Statement or any specific detail as to how these planned changes would be implemented,” explained Mercedes-Benz Australia Pacific’s CEO Horst von Sanden. “This is not just disappointing, but seems to indicate that the Government actually has no plan for how they implement the changes. The matters that we are very concerned about go to the heart of consumer protection and the integrity of the new vehicle market in Australia.”
Even the Federal Government admits the owner of a privately imported vehicle has no rights to protection under Australian consumer law and says on its own website: “Information for individuals seeking to purchase a vehicle overseas, and subsequent buyers in the Australian used vehicle market, will be made available through the Department’s website, including a recommendation that buyers purchase insurance and/or warranty coverage for repairs and possible safety recalls.”
So there’s the first extra cost for those buying from Britain or Japan.
Under the proposal from Minister Fletcher, no ‘second-hand’ vehicles can be imported but a ‘new’ vehicle is considered to be up to 12 months old and having covered less than 500kms.
But nowhere in the world is a 12 month old car with 500kms on the odometer considered a ‘new’ car – even under Australian law such a vehicle would be classed as a second-hand ‘Demonstrator’ model.
‘Benz points-out there is no RIS (Regulatory Impact Statement) accompanying the proposal, denying both industry and consumers any knowledge about the implications of the policy change and how the decision was reached.
Even the Department Of Prime Minister and Cabinet website says: “A RIS is a document prepared by the department, agency, statutory authority or board responsible for the regulatory policy proposal that formalizes and provides evidence of the key steps taken during the development of the proposal, and includes an assessment of the costs and benefits of each option. Preparation of a RIS ensures that all relevant information is documented and that the decision-making processes are made explicit and transparent”.
Notwithstanding its appearance to come straight from the script of the old TV series Yes Minister, or more lately the Australian production Utopia, that information is clearly lacking in Minister Fletcher’s proposal.
Local MPs whose electorates have importers’ head offices can expect to be bombarded with calls for action (in Melbourne, the Federal seat of Bruce, currently held by Labor’s Alan Griffin, contains the Australian HQ’s of Mercedes-Benz, BMW, Mazda and Renault as well as the Southern Region office of Hyundai).
So our advice to anyone considering buying a ‘Demonstrator’ car from Britain or Japan is: DON’T.
