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Hyundai lays bare industry concerns

Auto pilot: Hyundai is warning that Australia’s auto industry could end up like the landscape in New Zealand if the government doesn’t navigate the shifting tides carefully.

Major regulatory shake-up required to level auto industry says Hyundai boss

Hyundai logo31 Aug 2016

By DANIEL GARDNER

HYUNDAI Motor Company Australia (HMCA) chief operating officer Scott Grant has vented his concerns about the evolving but challenging Australian automotive industry and says critical areas of regulation, legislation and governance must change if all manufacturers, retailers and service providers are to be given a level playing field and a fair go.

The concerns about Australia’s unique industry do not come from a brand that is licking its wounds, with the South Korean manufacturer currently sitting in third place in the Australian market, but the car-maker has highlighted its areas of frustration that it says apply to all companies, large and small.

Speaking at a media event this week, Mr Grant explained to journalists the gravity of hot topics including parallel imports, splinter organisations and his view of the government’s responsibility in supporting the industry.

“Government knows that they can do almost anything to the car industry for their own advantage and it’s pretty hard for the industry to respond,” he said.

“If we truly want an equal playing field there’s lots of existing regulatory environments that need to change.”

One area of particular concern to the company is the emergence of small, self-appointed associations that can have a influential impact through government lobbying and indiscriminate systems of media analysis.

Mr Grant said a starting point would be for the Federal Chamber of Automotive Industries (FCAI) to establish a more holistic view of the industry to better represent all organisations under it.

“I think the FCAI probably needs to think about its future and structure, and probably needs to work more closely with the dealers, in my opinion. It has now merged with an importers group but it probably needs to merge with a dealer group to represent the original equipment industry.”

Mr Grant also voiced his concern for smaller relatively new associations that are gaining a voice and influence within the government, and named the Australian Imported Motor Vehicle Industry Association (AIMVIA) that is pushing for a change in used-car import laws as a prime example.

“The government is getting lobbied by a series of organisations that are claiming to represent the industry and the customer and what’s best for the market. The government needs to listen to somebody and obviously that’s incumbent for the industry to have a seat at the table, but there are plenty of other people who are putting forward other thoughts and some of them not factual.

“They (AIMVIA) issue press releases on a regular basis that get picked up unfortunately through the media scanning process that the government uses so they become evidence almost in the minds of the ACCC (Australian Competition and Consumer Commission).

“If it’s out there it’s going to get picked up and it’s going to get looked at by bureaucrats that don’t know a whole lot about what’s right or wrong.

“The FCAI, the AADA (Australian Automotive Dealer Association), AAAA (Australian Automotive Aftermarket Association), the AIMVIA: who’s listening to who, who’s setting the agenda and what are the vested interests? From an industry and original equipment standpoint we’ve go to do better.

“It’s a new open and free world that’s coming in the car industry with lots of people with lots of different ideas and lots of money to invest in areas that create their own vested interests.”

If the government is not consulting a balanced body of organisations, Mr Grant said he believes the industry is not being given a direct line when important decisions are made and the net result could result in a situation similar to what happened in New Zealand.

“If the industry doesn’t have a seat at the table in terms of policy development with government then the industry is importing and distributing and competing almost at a used-car level with others, then the level of investment that the OEs can make will be far less.

“The ability to import fuel-cell vehicles, look at new technologies as they emerge, driverless vehicles. It will become very difficult to do that if we don’t have a substantial industry with which to work from. We have the real risk of becoming like a New Zealand type of situation, which in my view is not really great for the country.”

Last year’s announcement by the federal government that it was looking to change parallel import laws has divided the industry and Mr Grant said that the authorisation to import vehicles from other global markets would cause numerous problems, the most serious of which relates to vehicle safety.

“It might have been subject to a recall in another jurisdiction and we would be unaware of it, we wouldn’t recognise the vehicle and we might not proactively take any action to repair it. Those kind of issues are somewhat lost in this argument about let’s have an open market place.”

Some advocates of parallel imports claim cost saving advantages for buyers, but several models indicate only minor savings in high-end marques and Mr Grant highlighted Australia’s diverse new-car market, which is broader than any other global market.

“The counter argument is that there are 400 different variants available today in 60-odd brands you can choose from. That’s probably a reasonable amount of choice.”

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