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The Government’s Misguided View on Car Imports Will Hurt Australian Consumers

The Australian Government’s complete disregard for the serious consequences that would flow from a plan to allow Australian consumers to personally import new motor vehicles is irresponsible and short-sighted. 

Calling for the Government to carefully consider the facts before making a final decision, FCAI Chief Executive Tony Weber said the Government's 'buyer beware' sentiment would see many Australians caught in high risk situations with their vehicles being outside established service networks.

"Currently, consumers are offered the highest possible level of consumer protection when it comes to purchasing a new motor vehicle through an Australian dealership. 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," Mr Weber said. “This system is also underpinned by Australian Consumer Law.”

“The industry is not ‘fearmongering’ when it says 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. Vehicles made for the Australian market are engineered for Australian conditions and safety specifications, so they will cope with the Australian climate, roads and lifestyle. 

"It is very simplistic and misguided to say there is no reason to regulate if you're now part of a global regime. Only 57 countries are part of the global regime. 

“Vehicles made for sale in Australia have the appropriate engine and transmission cooling systems to cope with Australia’s hot climate, towing requirements and fuel quality. It also includes having convenience items such as sat-nav, air-conditioning and infotainment systems specifically calibrated for Australia. 

“The cars may look the same on the outside, but there are differences when you lift the bonnet or look deeper into the interconnected systems.

“In addition, it is important to note that motor vehicle brands selling in Australia manage the complex logistical process to get a consumer’s vehicle from the factory to their drive-way. This includes managing the entire border control process, which includes everything from getting the car off the ship, through quarantine and to the consumer safely. How can a single consumer be expected to navigate this system confidently without the addition of significant bureaucratic red-tape—which the Government has said time and time again it is determined to reduce.

“I am bewildered that Assistant Infrastructure Minister Jamie Briggs can take such a simplistic view of an issue and appear to completely discount the advice of the industry it directly affects. It seems this position is driven by a misinformed view of the purchasing of a motor vehicle. The reality is that the whole of life cost of a vehicle under this scenario will become a significant burden for those who choose to import vehicles from overseas dealers, made for another country’s conditions.

“The FCAI strongly urges the Government to completely consider this matter by investigating the implications the proposal has on Australian consumers, on border security and quarantine, on automotive dealers, on service and repair networks, on future intelligent transport and communications systems, and on the automotive brands that invest in the tools, training and technicians that are available in this county to service a motor vehicle.”

The FCAI also notes this proposal risks unravelling much of the good work Australia’s National Motor Vehicle Theft Reduction Council has undertaken to reduce motor vehicle theft across the country. How would Australians importing cars privately be able to check the historical and legal records or the real provenance of the imported vehicle? We know that stolen cars in the UK are exported around the world to other right-hand drive markets. This move would give criminal elements a new market for those vehicles. 

The FCAI acknowledges that there has been plenty of misinformation about the cost of new cars in Australia, with some commentators arguing for an open slather approach to the import of new and used cars as a way of supposedly lowering prices. Our analysis of this matter has confirmed that Australia has one of the most competitive right-hand drive markets in the world and this is reflected in the price of new cars in this country. When we look at cars with the same level of specification, we find that the majority of cars made for Australian conditions are competitively priced in Australia compared to Japan, the UK or New Zealand. The FCAI research is robust and explained on the FCAI website.

Today Assistant Minister Briggs referred to an Australian Automobile Association (AAA) price comparison study to support the misguided view that cars in Australia are not competitive with prices around the world, ignoring the FCAI’s analysis. The Assistant Minister did not identify that the AAA analysis is not a like-for-like comparison. The AAA examined only 23 out of the more than 350 models available in Australia. Of these, the AAA showed only eight may be less expensive in overseas markets. These eight models are from the high-end of the market representing less than 2 per cent of annual sales.

“The reality is that new car prices in Australia are competitive compared to other right-hand drive markets around the world and affordability is at record levels, according to CommSec,” Mr Weber said.

“In one of the most competitive and affordable new car markets in the world, it is baffling why the Government is contributing to public misconceptions about the cost of new cars in this country. If the Government is so concerned about car affordability for all Australians then we would welcome a conversation on that, which would include the tax arrangements imposed on new motor vehicle sales. 

“Taxes and other government charges 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.”

For further information contact:
Sheena Ireland, Communications Manager
P: 02 6229 8221
M: 0458 038 555