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Car makers criticise new-car private import changes

By Daniel DeGasperi, 11 Feb 2016 News

Car makers criticise new-car private import changes

All is not clear (or well) on the manufacturer side of the equation

Car makers have called the federal government’s lift on new-car private import restrictions short sighted and fraught with risk for the consumer.

Industry body the Federal Chamber of Automotive Industries (FCAI) first criticised yesterday's announcement which will allow an individual to privately import one ‘new’ car from the UK or Japan every two years, sidestepping local dealerships in the process.

The government warns that a local warranty will not apply to these and recall notices may not be properly applied. The FCAI believes this will leave owners unprotected, and consumers who are on-sold the car may not know that their vehicle is not covered by manufacturer-backed parts and servicing.

“Currently, consumers are offered the highest possible level of consumer protection when it comes to purchasing a new motor vehicle through an Australian dealership,” said FCAI chief executive Tony Weber in a statement.

“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.

“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.”

mercedes frontFor importers such as Mercedes-Benz – which has been most vocal in its opposition to the proposed changes – this means potentially having vehicles wearing its pointed-star badge on Australian roads, but in a specification that is not officially imported and will not have parts inventory at dealerships.

A statement from Mercedes-Benz Australia said: “Australian Consumer Law currently provides comprehensive protection for automotive consumers when a vehicle is imported to Australia by the OEM [but] the owner of a privately imported vehicle will have zero protection.”

“The Government has announced no demonstrable or detailed plans as to how consumers will be protected against buying a stolen, financed or insurance write off vehicle,” the statement added.

“Currently, any customer vehicle purchased through official channels has guaranteed title against such issues [and] the considerable and valuable work done by Australia’s National Motor Vehicle Theft Reduction Council will all be diminished by suspect vehicles crossing our borders without compliance plates,” the statement added.

“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.”

Among the proposed changes to the law, the definition of ‘new’ car is cited as a vehicle less than 12 months old and with less than 500km on the clock, something Benz says is definitely not a new vehicle. Imports will no longer be required to have compliance plates physically attached but rather will be registered on a new, online database – however Benz also questions who will run this and how consumers will access it when being on-sold a vehicle.

The government says it expects 30,000 new cars to be privately imported per year, less than 3.0 per cent of total new vehicles sold each year in Australia.

Horst von Sanden BenzBoth the FCAI, Benz and others claim they are not against industry reform, however both suggest there are other ways to assist with increasing choice and affordability for the consumer.“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,” commented Mr Weber.

“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 only ultimately hurt consumers.”

“Mercedes-Benz Australia is not frightened of reform,” the German company added. “What we are frightened of is the disruption and diminution of one of the rights of Australian consumers which this policy proposal completely and totally disregards. It will create second class consumers when there is no demonstrated need to do so”.

Porsche has also been vocal in its opposition to the proposed changes to new vehicle importation.

MOTOR will further investigate the performance cars that, from 2018, may be imported from the UK or Japan – currently the only two permitted countries to import from – and how the process may work.