Questions and answers: the risks associated with personal imports

Are all vehicle models the same around the world?

No. Automotive brands engineer their motor vehicles for each market they are sold in. Accordingly, motor vehicles supplied to the Australian market by brands are engineered for our local conditions. These conditions vary considerably when compared to other geographic regions around the world. 

How is a vehicle engineered for Australia different to one made for an overseas market?

Australia’s climatic and environmental conditions are significantly different to other major right-hand drive markets, such as the United Kingdom and Japan, which are generally cooler and less prone to extreme high temperatures. These differences necessitate substantial engineering changes to motor vehicles imported into Australia to enable those motor vehicles to perform as intended. 

Australian consumers can be assured that cars made for Australian conditions and safety specifications will cope with the Australian climate, lifestyle and roads. This includes having the appropriate engine and transmission cooling systems to cope with Australia’s hot climate, towing requirements and fuel quality. It also includes having specifically calibrated convenience items such as sat-nav, air-conditioning and infotainment systems.

How is the engine different?

Fuel quality differs from country to country, which means engines and the Engine Control Units (ECU) that control them are required to be calibrated differently. Using the incorrect fuel in an engine not calibrated for that fuel increases the likelihood that the engine will suffer from degraded performance and increased emissions. It also increases the likelihood that the engine will not meet the expectations of the consumer, and may need replacing sooner than would ordinarily be the case for an equivalent Australian specified model.

Examples of this are available on pages 17 and 18 of the FCAI submission to the Motor Vehicle Standards Act Review

Vehicle safety is a global issue, aren’t the safety features in all cars around the world the same?

Passenger cars, Light Commercials and SUVs supplied to Australia, the UK and Japan all meet the minimum international standards (i.e. UN Regulations). However, there are some safety differences between overseas-market motor vehicles and Australian- specified motor vehicles.

For example, cars made for European markets (including the UK) are able to switch off passenger airbags to cater for rearward facing child restraints that are fitted into the front passenger seat. This is not the practice in Australia as the Government’s interpretation of ADR 69/00 and ADR 73/00 require all airbags to be active on Australian-specified motor vehicles, unless it can be demonstrated that the vehicle meets both ADR 69/00 and ADR 73/00 with the passenger airbag disabled.

Similarly, some motor vehicles sold in other markets do not contain the same number of airbags that an otherwise comparable Australian specified model. Car manufacturers have, for example, identified that base-level models in other countries do not include the side, curtain or knee airbags that are equipped as standard on the Australian specified model.

More examples are available on pages 18 and 19 of the FCAI submission to the Motor Vehicle Standards Act Review

I’ve heard reducing the restrictions on personal imports can lead to increased security risks. Is this true?

The history and provenance of cars sold in Australia are well known as state registration data bases are linked, there is a written-off vehicle register (i.e. wrecks register), as well as a Personal Property Security Register.

This information is not available for personal imports. While the original owner might be well aware and willing to take the risk, there is an issue over the impact on the subsequent owners of the vehicle.

In their submission to the Motor Vehicle Standards Act Review, the National Motor Vehicle Theft Reduction Council highlighted the risk to consumers from increasing access to importation of vehicles (either new or used) outside the brand and dealer network:

It is important that consumers are afforded recourse against misrepresentation to protect them from being sold a vehicle that is either stolen or of a lower grade than they should reasonably expect, when this is because it has been imported rather than sourced via a mainstream new vehicle programmes.

In New Zealand, where there are no restrictions on the importation of parallel vehicles, FCAI member brands advise that fraudulent activity with rebirthing of motor vehicles continues to be a problem, with the result that at the very least, non-compliant vehicles are operating on New Zealand roads. Examples of this are available on pages 13 and 14 of the FCAI submission to the Motor Vehicle Standards Act Review

Motor vehicle theft rates have been decreasing year on year and are at the lowest recorded levels since the 1970s. This is the result of a number of Australia-wide initiatives promoted and implemented by various organisations, including Federal and state governments. In addition to reducing risk to purchasers of second hand vehicles, these systems have reduced the ability for stolen cars to be ‘re-birthed’ i.e. the identification of a damaged vehicle being used to re-register a stolen vehicle in another state/territory. This situation cannot be guaranteed where personal motor vehicle imports are concerned.

Recently, the UK National Crime Agency released an on-line video showing the disruption of one shipment of 44 stolen prestige and luxury cars and SUVs (and parts) destined for overseas right hand drive markets. In 2013, around 90,000 motor vehicles were stolen in the UK, with many destined for overseas markets. 

What other risks do consumers face?

Consumers purchasing a motor vehicle outside of Australia, such as through dealers in other countries and via the internet, carry a large risk. As the experience in New Zealand has shown, consumers who purchase a motor vehicle outside of the established brand and authorised dealer network can find themselves exposed if something goes wrong.

Buyer risk is minimal when purchasing a new car from a franchised dealership. The vehicle brand and dealer carry all of the risk due to their obligations under the Australian Consumer Law. This includes warranty, service and parts, and recalls.

Recalls

In Australia, in the event of a recall, brands are able to notify the known owners of cars or motorcycles bought through the brand and its authorised dealers in this country. The brand does not know and is simply not able to notify owners of a recall where a motor vehicle sits outside the established brand infrastructure, such as a personal import.

Examples of this are available on pages 11 and 12 of the FCAI submission to the Motor Vehicle Standards Act Review. 

Servicing

The existing service and dealer network in Australia provide assurances to consumers that their car is serviced properly. In its Motor Vehicle Standards Act Review submission, the FCAI has questioned how a parallel vehicle importer would ensure that the same level of service and support, as required under Australian Consumer Law. The cost of servicing and obtaining parts for motor vehicles that are not supported by established brands, and the limited availability of trained technicians to service offshore models that are not currently imported into Australia by the authorised distributor of the brand in this market, must be carefully considered. 

It is likely that consumers will believe that a local dealer of vehicles of the same brand as their personal import is able to service their vehicle. If the personal import is made specifically for another country or is a model which is not present in the Australian market, a consumer who imports directly from an overseas supplier may face difficulty in obtaining appropriate spare parts and specialised servicing.

Why is consumer protection such an issue for the FCAI and Car Brands?

Our member brands have substantial investments made over many years in Australia. These are serious investments made in dealerships, workshops, technology and training to support and service their products.

Buyers of parallel imports may end up with a vehicle that does not meet their needs or operate as required in the Australian driving conditions. The car owner is then likely to blame the brand rather than accept that they purchased a car that was not engineered for Australian conditions.