The Australian Federal Government is treating with caution a recommendation by its own Productivity Commission to allow imported used cars into the country, with a senior cabinet minister saying it wouldn’t become a “dumping ground for second-hand vehicles”.
The government has not said whether it will support or reject the recommendation, only that it “will be thoroughly considered” as part of a review of the Motor Vehicle Standards Act.
The report into Australia’s carmaking industry found that “the Australian Government should progressively relax the restriction on the importation of second-hand passenger and light commercial vehicles”.
The Productivity Commission recommended changes relating to second-hand imports should not start until after Holden, Ford and Toyota stop building cars over the next three years. It also suggested used imports must be less than five years old and comply with “vehicle design standards which are consistent with those recognised by Australia”.
Federal Minister for Industry Ian Macfarlane said in a statement: “No decision has been taken to reduce these restrictions and the government has no intention of allowing Australia to become the dumping ground for other countries’ old second hand vehicles.
“Changes to current arrangements for importation of second-hand vehicles will involve careful consideration of an appropriate regulatory framework and standards, with emphasis on safety, environmental performance and consumer protection”.
The Productivity Commission report says that allowing foreign second-hand cars on to the Australian market could make cars cheaper, particularly in segments “characterised by larger profit margins”.
“An increased supply of close substitutes in the form of late model second-hand imported premium vehicles could, in this segment, place downward pressure on prices for new vehicles,” it says.
Tony Weber, chief executive for the Federal Chamber of Automotive Industries, says Australia’s competitive vehicle market already put new, safe and competitively priced cars on the road.
“With the significant year-on-year improvements in vehicle technology, it goes without saying that a newer motor vehicle fleet is better for consumers as newer cars are safer, more environmentally friendly and more reliable,” said Weber.
“The high level of competition is benefiting consumers, with a vast majority of models sold in Australia at a cheaper price than other right-hand drive markets. We will continue to engage with the government about this matter.”
Australians can currently import vehicles through the Specialist and Enthusiast Vehicles Scheme, but those “grey import” cars are subject to strict requirements and do not include mainstream models, unlike New Zealand.
Australians opposed to used imports say most federal politicians have many new-vehicle dealers in their electorates who would lobby against second-hand arrivals. “There’s a risk that MPs, especially in loyal ‘Aussie, Aussie, Aussie’ areas, could lose their seats by supporting used stuff,” said an executive for one major Australian car company, who didn’t want to be named.
“The new-car market in Australia will become even more competitive once Holden, Ford, and Toyota stop making cars here,” he said. “We are selling more than one million new vehicles each year now, so I can’t see the federal government softening the rules on second-hand stuff from overseas.
“The only way I can see it working is if it (government) allows car companies themselves to bring in second-hand cars, the way Toyota does it in New Zealand with their Signature range. At least that way there are some controls, some protection for consumers.
“I’m sure the government wouldn’t do a New Zealand and allow almost anyone to become as a used-import dealer. We’ve all seen the mistakes New Zealand has made. There’s no way in the world an Aussie would privately be able to import a damaged used car from Japan, repair it, hide its history and sell it to the bloke down the road for a profit. That sort of racket won’t happen.”