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Government scraps personal car imports from Japan and UK

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The upcoming vehicle import changes have been partially gutted.

The new scheme was to allow Australians to import one new car from right-hand drive countries every 12 months, including Japan and the UK. Now after months of industry consultation with Australia's car manufacturers and Australia's car import businesses the plan has been scrapped, in a move welcomed by Australian car manufacturers but decried by importers.

"The Turnbull Government has decided not to proceed with one element of changes proposed earlier, which would have allowed personal importation of new motor vehicles from the United Kingdom and Japan," said infrastructure minister Paul Fletcher, explaining that consumer and safety concerns, and "the cost and complexity of this particular change" were not offset by the "modest benefits of the personal import arrangement".

Some of the issues flagged were:

  • Only small price reductions, estimated to be less than 2% across the market
  • Issues with the manufacturer's warranty possibly not applying in Australia
  • Establishing systems to deal with a manufacturer's safety recall
  • Making sure that any subsequent purchasers of imported vehicles are aware of these issues

While the rest of the import scheme changes are still going to go ahead as planned, banning imports from Japan and the UK would greatly limit its potential.

The for and against

The scrapping was welcomed by the Federal Chamber of Automotive Industries (FCAI), representing many car manufacturers, with FCAI chief executive Tony Weber describing it as a win for both consumers and the industry. "The industry has long held the view that personal imports are not in the interest of consumers, nor of the 236,000 people who are either directly or indirectly employed in the Australian motor industry," he said.

However, the Australian Imported Motor Vehicles Industry Association (AIMVIA) was dismayed. AIMVIA president Jack Sandher pointedly said that "It will mean the decimation of our industry... the association and its board has devoted hundreds of thousands of dollars and countless hours to regular meetings with politicians... only to be ignored at the finish line. At a time when the automotive industry is already shrinking, it is ludicrous that the "government for small business" is prepared to watch 142 small-to-medium enterprises go to the wall for the sake of protecting the profits of overseas vehicle manufacturers."

AIMVIA also suggested that the integrity of the process may be at risk. According to the AIMVIA, "a senior government official charged with the task of overseeing the policy review and revision has just accepted a newly-created role within one of the industry associations heavily petitioning the government to tighten the Act and prevent further competition."

Will scrapping the import changes actually help protect consumers?

The main argument put forward for scrapping these changes is to make sure car buyers are protected by Australian consumer law, and understand when they might not be.

However, some of Australia's car manufacturers are currently under fire from the ACCC for not providing these benefits, even with Australian cars.

  • The ACCC has received more than 10,000 complaints about new car purchases and service in the last two years, many which specifically regard manufacturers dodging their warranty obligations under Australian law.
  • During the Takata airbag recalls, which are still underway and far from completion, many manufacturers simply ended up replacing the airbags with new ones that had the exact same issue.
  • Specific manufacturers have been accused of simply refusing to refund or replace faulty vehicles, and forcing customers to pay for replacement vehicles or repairs that they were entitled to under Australian law.
  • One of Australia's most prominent vehicle financing providers recently faced a class action lawsuit for selling "worthless" warranties for used vehicles, that simply doubled up on the same protections subsequent purchasers were already entitled to under Australian law.

The arguments put forward by the FCAI are true on paper, but against such an extensive backdrop of industry violations, most of which centre around the exact same talking points put forward by the FCAI, it's hard to believe manufacturers when they claim to be acting purely in the best interests of Australian consumers.

But that doesn't mean the benefits aren't real. Car imports from Japan and the UK might have been scrapped, but the advantages are there for Australian buyers to pick up.

Make sure you understand how a car warranty works under Australian law, and when you might be entitled to a free refund or repair. And remember to shop around for reliable car financing, because bigger isn't always better.

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