AADA has provided its most critical submission to the Government advocating against large-scale used car importation for the good of consumers, the auto industry and the economy.

The AADA has worked tirelessly this year rallying in favour of a continued ban on large-scale used car imports into Australia and recently the Association submitted its most important document on the issue to date.

In its final submission in response to the Government’s 2014 Review of the Motor Vehicle Standards Act 1989 (the Act), the AADA reiterated its stance that a change in policy may very well ‘erode Australia’s extremely high standards in motor vehicle safety, theft protection, environmental protection and consumer protection.’

It is a risk that has been consistently covered in the pages of Automotive Dealer, and by now, most Australian Dealers will be aware of the impact that large-scale imports could have on consumers and the industry.

From the arrival of cars with tampered odometers and no history, to uncertainty surrounding recall and warranty, as well as the dramatic reduction in value of Australia’s current fleet – the potential pitfalls are considerable.

What’s more, these risks seem even more unnecessary when you consider that Australian consumers already enjoy the benefits of the most competitive retail car market in the world. New car prices are at 20 year lows and more than 65 brands and 350 models compete for market share – substantially more than in the UK and US.

Despite this, earlier in the year the Productivity Commission recommended to the Government that it reduces restrictions on large-scale second hand imports.

Whilst a media release from the Hon Jamie Briggs MP, Assistant Minister for Infrastructure and Regional Development, states that the Government has ‘no intention to allow Australia to become the dumping ground for other countries’ second-hand lemons’ – it naturally concedes that it must consider all options, ‘particularly given the end of vehicle manufacturing in Australia.’

AADA’s position is consistent with the Harper Competition Review Draft Recommendation that ‘Competition Principles’ should be subject to a ‘public interest’ test that:

• The principles should apply unless the costs outweigh the benefits; and
• The objectives of the legislation or government policy can only be achieved by restricting competition.

And that’s where the AADA’s final submission comes in.

In line with the Government’s Options Discussion Paper, the AADA has included feedback on a number of courses of action in its submission, including:

• Do nothing or repeal the Act;
• Modernise and strengthen the legislation; and
• Harmonise with international standards and streamline certification.

In summary, the AADA agrees that modernising the Act (which is now 25 years old) is an important step, and one that could continue to meet the Government’s stated public policy objectives of:

• Community protection through vehicles that are safe and have low emissions;
• Consumer protection through vehicles that meet buyers’ expectations and are theft resistant; and
• Competition through vehicles that are readily available and reasonably priced.

As such, AADA contends that maintaining current legislation could result in an Act that’s inflexible and fails to recognise global forces of change both in the economy and Australia’s automotive industry, such as the end of local manufacturing.

AADA agrees with the Productivity Commission recommendation that the Australian Government ‘should accelerate the harmonisation of Australian Design Rules (ADRs) with the United Nations Economic Commission for Europe (UNECE) Regulations and the mutual recognition of other appropriate vehicle standards.’

AADA supports the retention of the current practice to apply the UN Regulations through the ADRs providing Australia with a degree of flexibility to control vehicle safety design standards.

Whilst it was made clear in its submission that the AADA does not support a policy promoting large-scale importation of used vehicles, it did recognise that used vehicles listed on the register of Specialist and Enthusiast Vehicles Scheme (SEVS) and imported under the Registered Automotive Workshop Scheme (RAWS) were acceptable as long as they strictly complied with design and safety benchmarks. Of course, the AADA still highlighted its concerns about the management, compliance, and enforcement of these schemes.

AADA also stated that ‘the personal importation of a new motor vehicle may satisfy and enhance individual consumer choice, but carries with it a number of risks.

Those risks should be brought to the attention of the consumer. A full volume importer registered in Australia and its authorised franchised Dealer network should not bear any regulatory responsibility for warranties, recalls and provision of service and repairs’ the submission adds.

What’s more, questions about the intended use of the vehicle, imposing a time limit on ownership, limiting to non-commercial quantities and enforcement measures to ensure the system is not abused must also be addressed.

The AADA’s submission concludes with a statement that the ‘cessation of motor vehicle manufacturing in Australia in 2017 is no justification for major changes to an industry that has operated successfully for over 100 years and is highly competitive and well regulated.’

Indeed, the wealth of choice and competitive pricing of new cars at consumers’ fingertips in Australia makes selecting safe, compliant and efficient vehicles arguably better here than anywhere else in the world. This fact is reiterated in the closing comments of the AADA’s submission, along with an appeal that any changes in policy must be accompanied by major new regulatory and enforcement practices.

Ultimately, this will help ensure community and consumer protection as well as a fair playing field for all motor vehicle retailers.

The AADA will continue to closely follow this issue and it’s expected that a decision on the large-scale importation of used-cars and personal importation of new or near-new vehicles, will be reached by the Government before the next election.