Parallel imports dead on arrival

THE federal government has killed off a proposal to free up personal new-vehicle imports from Japan and the United Kingdom, but will still make it easier for enthusiasts and specialist vehicle importers to bring in some vehicles under sweeping changes to the Road Vehicle Standards Act to take effect by 2019.

The changes will also tighten the rules on safety recalls and vehicle identification number (VIN) plates on imported vehicles to help protect consumers.

Industry peak body, the Federal Chamber of Automotive Industries (FCAI), has welcomed the announcement by urban infrastructure minister Paul Fletcher, describing it as a win for consumers and the industry.

Likewise, the Victorian Automobile Chamber of Commerce (VACC) has described the move as a good decision, saying it will not only protect consumers but also protect licensed vehicle traders from the fall-out of customer complaints about privately imported cars.

The new rules effectively stymie the growth of a parallel import vehicle market that some government members and consumer bureaucrats saw as a way to put downward pressure on Australian vehicle prices.

Japan and the UK were the nominated markets because the vehicles sold there are right-hand drive and have similar levels of safety and emissions to those sold by factory importers in Australia.

In his announcement in Canberra today, Mr Fletcher said detailed work on the proposal had highlighted the cost and complexity of such a scheme.

He said it would have required appropriate consumer and protection arrangements, including investigation of each vehicle before it was imported to Australia, ensuring consumers were aware that the manufacturer’s warranty may not apply in Australia, and establishing systems to deal with manufacturer safety recalls.

“Weighing these issues up against the modest benefits of the personal import arrangements – including price reductions estimated to be less than 2.0 per cent across the market – the government has concluded that the benefits do not justify the cost and complexity of this particular change,” he said in a prepared statement.

FCAI chief executive Tony Weber said the industry had long held the view that personal imports were not in the interest of consumers or of the 236,000 people directly or indirectly employed in the Australian motor industry.

“Australia already has one of the most competitive motor vehicle markets in the world, delivering world quality vehicles and outstanding value for the consumer,” he said.

“To allow personal imports would have exposed consumers to enormous risks, which the government’s own analysis has clearly identified.”

The FCAI had a more luke-warm response to government plans to measures to streamline procedures for the importation of unique, specialist and enthusiast vehicles.

Under the proposed rules, the range of vehicles eligible for consideration under specialist and enthusiast categories will be expanded, and importers will now be required to meet only one of six eligibility criteria instead of the current two out of four eligibility criteria requirement.

The FCAI said the changes had merit on the surface, but that it was keen to work through the detail with the government on elements of the revised scheme to ensure the necessary consumer protections were in place.

“The broad picture offered by the government in its statement is one which now provides legislative certainty and clarity and most importantly, better protection for Australian consumers,” Mr Weber said.

As described by Mr Fletcher, the six eligibility criteria will be:

Performance – a new graduated threshold formula measured from 110 kilowatts per tonne (kW/T) in 1992, increasing by 1 kW/T each year after.

Environmental performance – an objective vehicle technology based on an alternate power source to internal combustion or a micro-car subcategory for low power (low emissions) vehicles.

Mobility – originally manufactured or fitted from the factory with substantive specialist mobility features to assist people with disabilities.

Rarity – total worldwide production of the vehicle ‘make’ is fewer than 3000 units a year or total worldwide production of the vehicle model is fewer than 1000 units a year or total worldwide production of the vehicle variant is fewer than 100 vehicles a year. Left-hand drive vehicles imported under the rarity criterion will not require conversion to right-hand drive but will need state or territory agreement for use on their roads.

Left-hand drive – originally manufactured as a left-hand-drive vehicle and not available as an originally manufactured right-hand-drive vehicle in another world market. These vehicles will require conversion to right-hand drive for safety reasons.

Campervans and Motorhomes – originally manufactured as a campervan or motorhome.

Apart from these changes to the private import rules, the new bill – to be introduced to parliament by the end of this year – introduces reforms designed to modernise and strengthen the laws governing the introduction of new road vehicles and clarify vehicle recall arrangements.

“The new Act will better protect the community when it comes to vehicle recalls, by mirroring the safety recalls provisions in the Australian Consumer Law,” Mr Fletcher said.

“This means vehicle recalls provisions will apply to all road vehicles sold in Australia, whether private or commercial.

“Following consultation with police agencies, the government will require all new vehicles to have a secure vehicle identification (VIN) marking as a deterrent to motor vehicle theft and re-birthing.”

VACC media spokesman David Dowsey said the VACC had campaigned hard against the proposed legislation on behalf of its Victorian Automobile Dealer Association (VADA) members, and was pleased that the Turnbull government had listened to the experience contained within the automotive industry.

“Changing the existing personal importation laws for new vehicles would have necessitated complex communications programs to alert consumers of the possible issues surrounding personal imports and/or subsequently purchasing a personally imported vehicle, such as a possible lack of consumer protection arrangements, the possibility that a manufacturer's warranty may not extend to a vehicle imported into a non-intended region, and the arrangements around possible manufacturer safety recalls,” he said.