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Proposed Govt. changes to the vehicle import regulations in 2018 would lead to increased competition in the Australian Car market by allowing the direct import of new cars by individuals.
The Australian car industry is protected by restrictive import regulations (and taxes) which means all Australians pay much more for cars than they should, in some cases more than double.
Not surprisingly, instead of embracing the change and looking to legitimate ways to use the new regulations to help consumers and promote their product and brand, the large car manufacturers and their dealer outlets in Australia have been lobbying the Govt. hard to stop the changes and prevent Australian consumers from having free choice by maintaining their stranglehold over the market.
In a Govt. requested report, the independent Productivity Commission recommended an opening up of the market to secondhand cars of up to several years old to increase competition and allow Australian consumers to buy cars at international pricing. This was watered down by the Govt. to new cars from selected markets; a significant step back from their initial recommendation.
Now it seems the import of new cars will also be blocked by back benchers in the Senate who are listening to a handful of dealers in their electorates who are experts at using scare tactics and misinformation to get what they want — to continue ripping off the Australian public and serve their own commercial interests.
The result if this happens ? We will all continue to pay way too much for cars in Australia, which in turn means for the same spend we will on average be driving less safe and less efficient vehicles. Younger drivers with a limited budget for their first car and at most risk on the roads will perhaps be the worst off, by missing out on the opportunity to buy newer and safer vehicles.
The large car manufacturers and dealers clearly care more about their bottom line than anything else.
The following is reproduced from an AIMVIA MEDIA RELEASE – 23 February 2017.
A TALE OF TWO TOYOTAS
Prior to the introduction of used imported vehicles, New Zealand car buyers paid some the highest prices for cars anywhere in the world. Demand was such that many near-new vehicles were fetching over the recommended new price, forcing the NZ government to lock new car buyers into 12 month contracts to prevent them on-selling their new rides for a profit.
In 1998, a removal of tariffs on most vehicles being imported into New Zealand resulted in the remaining four NZ manufacturers – Toyota, Mitsubishi, Honda and Nissan – closing their doors. Recognising the growing popularity of used imported vehicles in New Zealand, Toyota NZ converted their Thames facility from manufacturing to refurbishment of used vehicles from Japan. The Thames refurbishment centre continues to the current day, supplying used imported vehicles to Toyota dealerships. These vehicles are then sold to the general public via Signature Class branding, giving consumers peace of mind when purchasing a used imported vehicle.
Most importantly, the switch to refurbishment meant that Toyota NZ could retain most of its manufacturing workforce at the time, giving workers new positions that allowed them to utilise their skills and expertise.
Like New Zealand, Toyota Australia made the difficult decision to cease local manufacturing in October 2017. While Australia is a competitive marketplace for new vehicles, the crucial difference between it and 1990s New Zealand is that the importation of used vehicles has been heavily restricted in order to protect local manufacturing. But with the end of all vehicle manufacturing in Australia, the need for such protection is no longer necessary.
With two separate government reviews by the Productivity Commission and ACCC recommending the relaxation of regulations regarding used imported vehicles, rumours have persisted that Toyota Australia subsequently investigated the establishment of a Signature Series refurbishment centre, either at its existing plant in Altona, or at a new facility in South Australia. Given that the current review of the legislation is now in its fourth year and the new system is due to be introduced in late 2017, the timing would have been perfect; such a facility would have created (or saved) hundreds of jobs in the manufacturing sector and helped stimulate local economies right at a time when automotive manufacturing was winding down.
Fearful of the added competition that imported used vehicles would create in the marketplace, representative groups such as the Federal Chamber of Automotive Industries (FCAI) and the Australian Automotive Dealers Association (AADA) swung into action, persistently lobbying the federal government to ignore the recommendations of its own taxpayer-funded reviews and block any changes to scale back current importing restrictions.
To highlight the ‘cracking a nut with a sledgehammer’ nature of this move, a mere 6,700 used vehicles were imported to Australia in 2016, against a backdrop of 1,178,000 new vehicle sales for the same period. Even if proposed changes to the legislation were very generous for used vehicle importers, a projected figure of 30,000 vehicles per annum would still represent just 2.5% of new vehicle sales.
So why push back so hard? It’s simple: new vehicle importers are operating an oligopoly; one that is currently being aided by government legislation. Without the parallel importation of used vehicles, there is no external pressure on new car dealers to reduce their prices and compete with used imported vehicles. They, therefore, have a vested interest in maintaining the status quo.
And so we end up with a ludicrous situation where Toyota Australia has opted to toe the protectionist industry line, denying its own workers the opportunity to continue in new jobs in a Signature Class refurbishment centre, using skills they’ve already acquired in manufacturing. These same workers will instead be given significant support from both state and federal governments (funded by taxpayers, naturally) to retrain and find new jobs elsewhere.
To make matters worse, Toyota dealers, who would benefit from selling Signature Class vehicles in their yards, have instead led the fight against used imported vehicles. petitioning their local MPs and citing a potential loss of jobs at their dealerships ! What superb irony.
So which Toyota made the right choice to protect the jobs of its workers ?
The below video shows how Toyota NZ’s Signature Class process works
AIMVIA remains committed to fighting for a fairer automotive marketplace and for protecting and creating Australian jobs. But they need your help.
Have your say by speaking to your local MP and by contacting Minister Paul Fletcher using the email below:
If you’ve been considering AIMVIA membership, there has never been a better time to get behind them – they need your support as they carry the torch for the industry in Canberra.
Further details on the vehicle import regulation reforms is available on the Department of Infrastructure and Regional Development’s website.