Government announces major changes to car import laws – more choice, but more risk?
The Government has announced changes to the Motor Vehicle Standards Act significantly altering personal car import laws. But, not everyone is happy.
THE GOVERNMENT, yesterday, announced changes to the Motor Vehicle Standards Act that has the car enthusiast community excited is the change to import laws. The law will come into effect from 2018 (after local manufacturing has finished in Australia). Here are the basics:
Personal New Car Import Changes
- You can import one vehicle every 24 months;
- From right-hand-drive countries with “comparable vehicle standards to Australia”;
- This presently means Japan and the UK (what? No NZ?) and motorcycles also from the USA and European Union countries; and
- Vehicle must have less than 500km on the odometer and be less than 12 months old.
Vehicles will need to be inspected by an independent third-party, and it is expected some modifications may be necessary such as installation of child-seat anchor points. Imported vehicles will be recorded on an online Register of Approved Vehicles.
The Department of Infrastructure and Regional Development will make information on the process available on its website, and this will include buyer purchase coverage for warranty and safety recalls. That’s because you can expect no sympathy from the local manufacturers.
The Government says that quads, commercial vehicles and buses will not be eligible for import.
The Australian Government will also amend the Customs Tariff Act 1995 to remove the $12,000 special duty on imported used vehicles from 2018.
Register of specialist and Enthusiast Vehicle SCHEME (SEVS REgister)
The Goverment says this Register “identifies vehicles that are of specialist or enthusiast interest, are not available in the Australian market, and are unable to be supplied without some concessions against the national standards in the Australian Design Rules (ADRs).” These vehicles would be imported via the Registered Automotive Workshops Scheme (RAWS).
The idea behind the SEVS Register is that “motorists are able to access genuine specialist and enthusiast vehicles without undermining the role of the Act in maintaining community safety” – in other words, cars that don’t meet the usual road laws but are deemed special enough to import. And there’s criteria for special, which is one of the following five areas according to the Government:
- performance – high-performance vehicles with specifications (e.g. power to weight ratio) significantly superior to mainstream vehicles in Australia;
- environmental – vehicles that offer environmental performance (e.g. emissions of carbon dioxide per km) significantly superior to mainstream vehicles in Australia;
- mobility – vehicles manufactured with special features to assist people with a disability;
- rarity – vehicles of which only small quantities have been produced; or
- left-hand-drive – vehicles originally manufactured as left-hand-drive, of which right-hand-drive versions are not available in any other country.
This looks like it covers pretty much everything, and the Government also says that “the eligibility thresholds under these criteria will be developed in light of further consultation.”
A vehicle can be listed on the SEVS Register three months after its release in any other country, down from 18 months, provided the vehicle is not available in Australia. This includes models if the specification is different to that of the Australian model. For example, and we’re speculating here, let’s say you really wanted a Mustang V6 instead of the 4 or 8 cylinder – that would probably be different enough.
Vehicles will be on the SEVS Register for two years, and then an application can be made to keep them there. The Register will be published online so everyone can see which cars are on it.
Registered Automotive Workshop Scheme (RAWS)
Changes here include removing the limit on the number of vehicles that a workshop can process, and the process for becoming a RAW will be made easier – all you need is workshop details and ISO 9000 accreditation. RAWS can import special vehicles on the SEVS register (above).
Concessional imports – easier to import unusual vehicles, competition cars, and classic cars
There are 12 import options at the moment and these will be reduced to four. The Government’s words are:
- Temporary / non-road use vehicles – which are not permitted general access for permanent road use (such as vehicles for exhibition or test vehicles not used on public roads). (This includes racecars).
- Non-standard vehicles – which are necessary for specialised operations, or for which there is a reasonable case to allow importation for use on public roads. This will include test and evaluation vehicles for road use, non-compliant plant and equipment (where a standard vehicle cannot perform the function, such as drilling rigs), vehicles owned and used overseas (the current ‘Personal Import’ arrangements) and other specialised vehicles such as military equipment and airport fire trucks.
- Older vehicles – which are eligible 25 years after date of manufacture, rather than the current pre-1989 cut-off. This pathway will require that vehicles are modified to meet requirements for older vehicles under the Australian Vehicle Standards Rules; and to be limited to passenger cars, light commercial vehicles (less than 3.5 tonnes Gross Vehicle Mass) and motorcycles.
- Heavy and light trailers – imported trailers will be required to meet the same standards as locally manufactured trailers
Why has the Government changed the laws?
The Motor Vehicle Standards Act was implemented in 1989 and reviewed in 2000. These reforms are, according to the Government, designed to simplify import laws, provide regulatory savings and allow Australians an easy way to import vehicles. The Government claims there will be up to 30,000 vehicles imported anually, and over 10 years this would be a $486 million benefit to the economy. Exactly how this figure is calculated is not clear.
What’s the reaction from the industry?
The Government says “During public stakeholder consultations, businesses in the automotive parts and servicing sectors expressed support for personally imported new vehicles and confirmed their capacity and willingness to meet the ongoing service needs of consumers. These stakeholders indicate they expect the policy to generate new opportunities and avenues of business.”
Senator Ricky Muir has supported and worked for reform of this nature, so was quick to welcome the move, saying “I believe that the proposed changes in relation to personal importation of new and near-new cars and motorcycles from other countries with standards comparable to Australia’s will potentially help drive down the overall cost of new vehicles in Australia by creating competition in the new vehicle market.” We think that might be a bit optimistic, as the average car buyer will prefer the ease of local buying and this import scheme is likely to be more for enthusiasts or those with special needs.
After the Minister issued a press release it was only a matter of time before an email arrived from the FCAI, and the contents were predictable, starting with:
“The Federal Chamber of Automotive Industries (FCAI) is extremely disappointed in the Australian Government’s announcement that it will allow personal imports of ‘near-new’ motor vehicles from 2018.”
The FCAI also went on to warn about the government “taking a ‘buyer beware’ sentiment that would see many Australians caught in high-risk situations with their vehicles being outside established service networks” and that “the Government failed to acknowledge that 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” and they claimed that the Government had not produced a Regulatory Impact Statement (RIS).
Despite that, there was some support for improved alignment with standards stating “the industry supports the closer harmonisation of ADRs with international standards, and the industry has been working with the Government on this for a long time”.
They make a good point that there are other ways to reduce compliance costs; their view is that “the best way to continue to deliver a greater range of choice in new cars and motorcycles is to accelerate the removal of unique regulatory standards and administration” and “if the Government is so concerned about car affordability, it should look at the taxes and other government charges that make up around 20% 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.”
Mercedes-Benz, always a vocal critic of such laws was also quick to make the same points, but so far no other carmarkers have issued a press release.
If the FCAI was opposed, then it was equally no surprise to see the Australian Automotive Aftermarket Association (AAAA) support the changes. Executive Director Stuart Charity said “this reform is in line with improving competition and consumer choice. It is also consistent with both the Productivity Commission and Harper Review recommendations for the future direction of the Australian automotive industry and the wider economy”.
The Expert View
We discussed the changes with one of the Australia’s leading specialists in vehicle imports, Kristian Appelt of Auto Services Group and Iron Chef Imports.
PM: Would it be fair to say that the personal import changes are more about choice than saving money?
KA: Because buyers are required to pay tax on their vehicles overseas, then tax when the vehicle enters Australia, the financial benefits of importing their own vehicle are greatly reduced. It does, however, give importers far greater choice of new vehicles, and will be of great use when waiting lists on locally-delivered equivalents (like the Porsche GT3 RS) stretch out beyond 12 months.
PM: Can you think of any cars that *would* be a saving if imported, eg. massively more expensive here than in Japan or the UK?
KA: The price differential seems to grow the further upmarket you go. Most Porsches are horrendously over-priced here.
PM: How would you describe the risks of a personal import?
KA: Calculated. I don’t believe the potential market will reach anywhere near the numbers the government is suggesting. I suspect those who are prepared to take the risk will have done their research – those that haven’t would benefit from using an import broker familiar with the importing process as a safeguard.
PM: So not 30,000 then? What would you say is a fair target?
KA: Providing the market stays similar to current conditions, and with a similar exchange rate, I doubt many more than 3000 units per annum will come in via the Personal New Import Scheme.
PM: With these new laws, approximately how much cheaper would it be to import a car?
KA: Not including the cost of the vehicle or taxes, it will drop from $8-10,000 to closer to $5,000 for a personal, new vehicle.
What cars might you be able to import?
You can start to browse British and Japanese car manufacturer websites, where you will see vehicles like this Honda Civic Type R which we wish Honda Australia would import. Now you don’t need to wait for an official decision, you can get your own. This may of course spur manufacturers to bring in more cars before the importers beat them to it.
A counter view is provided by Kristian Appelt, who says “although currently there is some disquiet being expressed by the Federal Chamber of Automotive Industries and its members, the proposed changes to the act may reduce the pressure on some manufacturers to import a specific vehicle expected to sell in small numbers only.”
Either way, how can more choice be anything other than a positive?
Here’s something available in Japan but not in Australia, a 4WD Delica peoplemover:
Maybe a Toyota Alphard, a peoplemover not available in Australia, larger than a Tarago. If you must buy a peoplemover, wouldn’t you want one hardly anyone else drives?
Or how about a seven-seat Pajero Sport, as we only get the 5-seat version?
Would you like to cruise in a top-spec Toyota Crown hybrid?
Perhaps some tiny little Nissan or Honda cuteness could fit in your garage?
We can’t get the Prado shortie in Australia, but you can in the UK. Like it? (and it’s a manual!)
Who wouldn’t like a tiny, rear-drive manual sportscar like the Honda S660?
These changes are more about choice than money saving, especially with the exchange rate the way it is now, and even if the rates change in favour of imports don’t expect to grab a cut-price car from overseas as the import costs are likely to cancel out much or all of the savings.
The changes also reflect a growing focus on consumer rights, and there’s also the push for lemon laws we covered earlier.
Reasons we can think of to import:
- Can’t get the car – the model you want simply isn’t available in Australia
- Don’t want to wait – it is available, but there’s a very long waiting list
- Different trim specifications – maybe you want a top spec model not sold here, or a three-door version of a five-door wagon, or automatic or manual transmission. Or even a plug-in hybrid version.
What car would you import? Tell us in the comments…
List of right-hand drive countries
Here’s a list of right-hand drive countries. Most of them are tiny and connected in some way to the UK. Notable ones that perhaps could have “comparable standards” to Australia are Brunei, Hong Kong, Ireland and South Africa – and definitely New Zealand. Malaysia, India and Thailand could be interesting sources of cars too. As it stands, only Japan and the UK are mentioned as approved countries.
|British Virgin Islands|
|Channel Islands (Guernsey & Jersey)|
|Cocos (Keeling) Islands|
|Turks and Caicos Islands|
|United States Virgin Islands|
|Virgin Islands (British)|
|Virgin Islands (USA)|
|Northern Mariana Islands|
|Antigua and Barbuda|
|East Timor (Timor-Leste)|
|Great Britain (GB)|
|Isle of Man|
|Papua New Guinea|
|Saint Kitts and Nevis (officially the Federation of Saint Christopher and Nevis)|
|Saint Vincent and the Grenadines|
|Trinidad and Tobago|
|United Kingdom (UK)|