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Chorus against deregulation joined by Mazda chief

The case against: Mazda Australia managing director Martin Benders filed his submission on a proposed government for review of the Vehicle Standards Act 1989 which could see the market flooded with imported cars.

Mazda’s boss has outlined how the removal of import barriers will damage industry

31 Oct 2014

MORE than 200 public submissions have been made on a discussion paper released by the government on the terms of reference for a review of the Motor Vehicle Standards Act 1989, with Mazda’s Australian boss one of the vocal opponents to deregulation.

Submissions closed on October 20 and among them was Mazda Australia managing director Martin Benders’s plea to keep the current barriers to personal importation and avoid an influx of so-called 'grey imports' into the country.

Speaking at the Australian launch of the new Mazda2 this week Mr Benders said a removal of the barriers would flood the market with cars, damaging the auto industry.

“You just have to look at the New Zealand experience to see what’s happened there,” he said.

“We have a car parc that’s five years younger on average than New Zealand, we have new cars here that are cheaper than in New Zealand, so why would we just sit back and say the government has got it right? “You’ve got government members out there saying we need to have this price adjustment now that local manufacturing is stopping. In fact, the price adjustment has already happened – that’s why they’re going.” In his submission to the government Mr Benders puts forward three points: that the current barriers offer appropriate and balanced protection that reducing the protections will adversely affect the competitiveness of the industry to the detriment of consumers and that safety would be compromised.

“It will just pump more cars into a saturated market. Australia is pretty much a closed system in terms of cars, the ownership per person is on a par with the US or Western Europe, so if you shove in 100,000 or 200,000 used cars something has got to give and the only thing that gives is new cars because it goes straight back up the chain.

“What will happen is it will just increase the depreciation from a new car to the first layer of a used car. Which means that anybody who owns a car, especially those who bought new, will have such a depreciation gap that they’ll probably hold onto their car a bit longer and that’ll just stop the new car sales.” Mr Benders said that he doesn’t have problem with the government taking a fresh look at the Act, but said to review it with a means to removing red tape was unnecessary.

He argues that cars imported and distributed through current channels are “built for purpose” and used Australian-specific cooling systems as an example as to how they are made suitable for the hot climate.

He said if barriers were removed the imported cars may not function properly here leading to safety issues.

According to the government’s press release issued in September, the review into the Act – which delivers national standards for motor vehicles and regulates used imported vehicles – is necessary due to the changes which had taken place in the sector in the 14 years since it was last examined.

“The review will seek to ensure we strike the balance between appropriate safety standards, in line with international best practice, and consumer access to vehicles at the lowest possible cost, particularly given the end of vehicle manufacturing in Australia,” read the statement.

“The discussion paper considers all possible reform options including ideas put forward by the Productivity Commission in its Report on Australia's Automotive Manufacturing Industry.

“The Productivity Commission’s proposal to reduce restrictions on second-hand imports is one of many ideas canvassed in the paper.” Other car-makers that also made submissions include BMW, Mercedes-Benz, Holden, Ford, Mitsubishi, Volkswagen, Audi, Porsche, Skoda and Isuzu. Toyota along with 29 of its dealers also filed their submissions.

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