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Car industry rejects relaxation of import rules

Second hand: A proposal for parallel new and used vehicle imports raises many questions.

“Absolutely ludicrous” car import rules proposal raises ire of motor traders

2 Apr 2015

THE Australian automotive trade has dismissed as “absolutely ludicrous” a proposition to allow parallel importing of new cars or the importing of used cars.

Peak bodies including the Victorian Automobile Chamber of Commerce (VACC) and the Australian Automotive Dealer Association (AADA) were quick to dismiss the proposition put forward this week by the Competition Policy Review panel in its final report this week.

The panel was chaired by Professor Ian Harper, who previously headed the Howard government’s Australian Fair Pay Commission that was set up to implement the Work Choices policy.

The recommendation to relax vehicle importing rules prompted a chorus of protest from the automotive trade concerned that the derestriction of imports would bring many new problems into the industry such as the potential for rebirthing of cars stolen overseas, inability to have imported cars repaired and, in some cases, the inability of cars to safely use local high-sulphur fuel.

“VACC is disappointed with the panel’s recommendation to relax regulations on second hand imports,” VACC executive director Geoff Gwilym said.

“We opposed this notion when it was proposed by the Productivity Commission it was not a good idea then and it is not a good idea now,” he said.

Mr Gwilyn also pointed out that the notion contradicted the government’s previous stance that “it had no intention of allowing Australia to become the dumping ground for other countries’ old second-hand vehicles”.

Mr Gwilym said the government would not be able to adequately police unrestricted imports of used vehicles if it were made legal.

The review panel’s final report asserted that relaxing parallel import restrictions would provide a net benefit to the community “provided appropriate regulatory and compliance frameworks and consumer education programs were in place”.

Mr Gwilym cast doubt on that proposition, saying he did not believe any enforcement regime would have the capacity to identify whether a vehicle had been tampered with before export.

“Even in Australia, where the life of a vehicle can be tracked and traced through its registration, there are still incidents where private buyers find out that the vehicle they bought through a personal sale has been subject to unscrupulous tampering of odometers.

“I have no idea how an officer at Customs will have the equipment or capacity to confidently confirm the kilometres and history of cars coming from a multitude of countries.”

And there could be life and death questions involved in the import of used cars if they have been repaired overseas.

“In many countries the training of vehicle repair technicians is poor and this may be reflected in the quality and integrity of a vehicle repair,” Mr Gwilym said.

“Just because a car or light truck is only a few years old, there is no guarantee it hasn’t been in a serious crash before.” The AADA’s outgoing chief executive Patrick Tessier said the derestricting of imports was an “absolutely ludicrous proposition”.

Quite apart from the problems posed by importing used vehicles, he said the new car section of the automotive trade was not in need of any more competition.

“Let’s look at the simple facts - if their objective is to make us more competitive, they are not paying attention.

“We have 67 brands of cars for sale in Australia, every day. We are, without question, the most competitive car market in the world.

“We have a population of 23.5 million people. We have 7.5 million households.

We have 2.2 cars every household.

“How competitive do you want to be? You can buy a new car today, with a seven-year warranty, for $15,000.

“Where’s the benefit (of relaxing restrictions)? There’s no benefit here.

“I really do think they have lost the plot when it comes to this. In my mind, this has the potential to become another pink batts issue.”

Mr Tessier said that if people imported some new top-end European cars, they would find that the high-sulphur fuel sold in Australia would mean they might only get 30,000 or 40,000 kilometres of life out of their engines.

And there were other issues with used imports.

“If they were to do this, our park would go from about 10 years of age to about 14 years of age in no time.

“The environmental impact from our car parc because of an influx of second hand cars – it’s just stupidity.”

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