MOTOR TRADE ASSOCIATION - Submission to NZ Transport Agency


                                 Submission to

                              NZ Transport Agency


         Land Transport Rule: Vehicle Standards
          Compliance Amendment (No 2) 2013

Motor Trade Association Inc
P O Box 9244
Marion Square

Phone 04) 385 8859                                                          29 May 2013

Page 1                  MTA Submission – Compliance Amendment (No 2) 2013       May 2013
29 May 2013

Compliance Amendment (No 2) 2013
Rules Team
New Zealand Transport Agency
PO Box 2840

Dear Rules Team

Submission: Land Transport Rule: Compliance Amendment (No2) 2013

This submission is from:

Motor Trade Association
P O Box 9244
Marion Square
Wellington 6141

The contact person in respect of this submission is:

Name:        Garry Williams
Title:       Repairer Services Manager
Ph:          (04) 381 8817
Fax:         (04) 385 9517

Thank you for the opportunity for MTA to provide comment on the Land Transport Rule: Compliance
Amendment (No2) 2013 regarding the views of and its effect on the automotive industry.

Yours sincerely

Garry Williams for

Dougal Morrison
Advocacy and Training General Manager

Page 2                     MTA Submission – Compliance Amendment (No 2) 2013        May 2013
Land Transport Rule: Compliance Amendment (No2) 2013
1.   Introduction
     The Motor Trade Association (Inc) (MTA), which represents approximately 4,000 businesses
     within the automotive industry and allied services, takes this opportunity to convey its views on
     the Land Transport Rule Compliance Amendment (No2) 2013.

     Members of our association operate businesses ranging from heavy and light general
     automotive repairers, collision repairers, vehicle importers and distributors, vehicle and
     agricultural equipment sales, vehicle entry and in service inspection services, vehicle recovery
     and service stations.

     We have circulated the Compliance Amendment Rule to members giving them opportunity to
     provide comment either directly in their own right or through MTA.

     The key issues for MTA are:

     •     while supporting phasing in of annual WoFs for 2000 to 2008 vehicles we request this be
           delayed from that proposed. We recommend 2004 to 2008 vehicles be phased in from
           1April 2014 and 2000 to 2003 vehicles phased in from 1 October 2012
     •     that NZTA promote and enforce current compliance rule requirements that require a
           vehicle to have a WoF no older than 30 days at the time of sale of the vehicle
     •     that technical and administration areas that have been raised by industry over a number
           of years to improve the WoF be seriously consulted on in Phase II of this WoF review.

     In making this submission to the Compliance Rule amendment MTA re-iterates its position that
     we do not support a reduction of frequency for the Warrant of Fitness inspection from the period
     which applies now. We detailed the reasons in our submission to the Ministry of Transport on
     Vehicle Licensing Reform dated 31 October 2012.

     In summary this outlined that:

     •     nearly two thirds of motorists indicated in an independent survey they would be
           concerned to some degree about a change of WoF frequency – this was consistent
           across a number of MTA surveys
     •     many motorists rely on the WoF as a mechanical check of their vehicle and have a poor
           attitude to vehicle servicing
     •     51 percent of vehicles have work undertaken on them prompted by the need to pass a
     •     repair costs could increase if faults are not picked up at an early stage
     •     mechanical faults if not picked up early will increase the risk of accidents
     •     increased accidents (injury or non injury) would result in increased insurance costs
     •     many New Zealand roads are unforgiving by world standards increasing the need for
           vehicles to be safe
     •     New Zealand’s fleet is old by world standards (the proposal in the Compliance
           amendment that six month WoFs be retained for pre 1 Jan 2000 vehicles is
     •     a high number of motorists ignore the WoF and vehicle licensing
     •     there is a lack of on road vehicle safety enforcement – MTA was particularly concerned
           that reduced WoF frequency would not be adequately mitigated
     •     if WoF frequency were reduced there would be a significant impact on NZTA inspection
           agency business income resulting in a loss of jobs.

Page 3                  MTA Submission – Compliance Amendment (No 2) 2013                 May 2013
MTA accepts that the Government have put forward proposals that do not match our views and
     so we look forward to working with officials to maintain New Zealand fleet safety in the changed
     environment as this evolves.

2.   Warrant of Fitness
     WoF Frequency changes proposed by the Compliance amendment Rule

     •     Initial Inspection, then no WoF for three years
           MTA recommendation
           MTA submits that after the initial inspection that the next WoF should be after two years

           While vehicles have become more reliable in recent years, some new vehicle servicing
           periods have been extended up to 40,000 km or two years whichever comes sooner,
           dependant on driving conditions, and in future this could be extended further. New
           vehicles are typically covered by a three warranty but servicing remains the sole
           responsibility of the vehicle owner. (Occasionally manufacturers include the cost servicing
           in the vehicle sale price as an added benefit/incentive if owners take this up)

           About 70% of new vehicles are purchased by corporate and lease companies. Lease
           companies put pressure on service agents to minimise the service cost. Further, drivers
           of new vehicles travel longer distances per year and wear out tyres quickly.

           Longer service periods, and a WoF every three years means these vehicle will be
           operated for long periods reliant entirely on the operator, often not the owner, to
           undertake recommended servicing, maintenance and to check safety equipment.

           Statistics show year on year the WoF fail rate for the first three years shows a steep rise
           from year one to two and a further increase to year 3. This supports a WoF at two years.

           WoF fail rate in the first three years

            Vehicle age                    1              2               3
            2012 MTA survey               3%             22%            25%
            2011 WoF online               8%             14%            17%

           Note: WoF online typically under reports failures as these are often not entered by
           agencies. The MTA results are usually higher as this reports all work prompted or
           undertaken on the day of inspection by the need for a WoF.

     •     Additional request – WoF reminders
           MTA recommendation
           MTA submits that should the first WoF be extended to three years for new vehicles, then
           NZTA take responsibility to send a reminder to vehicle owners that their vehicle requires
           its first mandatory in-service WoF.

           Under the current annual then six months WoF frequency many owners simply forget to
           renew their WoF until they are prompted by their licence reminder or similar. MTA believe
           a three year gap will result in a higher rate of forgetfulness. While it might seem simple
           that responsibility for sending a reminder falls on the inspection, servicing or selling
           dealer, many vehicles are likely to fall off the servicing radar as their owner or operator, or
           the vehicle, shifts around over the three year period.

           For some vehicles NZTA might be the only organisation that has an owner address and
           so we suggest it become their responsibility to remind the owner that their vehicle is due
           its first mandatory in-service WoF. Beyond this period reminders from a WoF agency are
           more likely to be received by the operator.

Page 4                  MTA Submission – Compliance Amendment (No 2) 2013                  May 2013
•   Annual WoFs for light vehicles over three years old first registered on or after
         1 January 2000
         MTA support that vehicles over three years and registered on or after 1 January 2000
         receive an annual WoF.

     •   Six monthly inspections for vehicles first registered before 1 January 2000
         MTA support that vehicles first registered before 1 January 2000 be subject to a six
         monthly inspection.

     •   Proposal to phase in frequency change implementation from 1 October 2013
         MTA recommendation
         That annual WoFs for vehicles in the age band 2000 to 2008 be phased in two groups
         2000 to 2003 vehicles commencing on 1 April 2014 and 2004 to 2008 vehicles
         commencing on 1 October 2014.

         MTA agrees that the phase in of WoFs for vehicles in the age band of 2000 to 2008 in
         two groups, 2000/03 and 2004/08, would smooth the number of WoFs month on month in
         the future. We were, however, very concerned to learn that the NZTA planned to
         introduce this phasing from 1 October 2013. MTA believed there was an awareness of
         the need to ease frequency change into the market in a timely way to minimise affect on
         industry and NZTA Agents. Introducing the phase in early does not reflect this.

         Industry needs time to plan for the staff reductions that will result from a reduction in the
         number of WoFs undertaken.

         Originally the implementation was planned for July 2014. It was then brought forward to
         April 2014 and now it is proposed to effectively begin on 1 October 2013. MTA wonder at
         the reason for this rush as we do not believe from a practical viewpoint it is necessary.

         There are a number of points relating to this which MTA believed will cause significant

         –     Bringing the phase in date for 2004 to 2008 vehicles forward to October 2013 for
               the issue of annual WoFs would also bring forward the time at which WoF number
               fall off. This would reduce industry and NZTA inspection agency income and
               employment earlier than anticipated.
         –     The original implementation date of July 2014 for WoF frequency change would
               have reduced WoFs numbers from January 2015. Under the new proposal of
               introducing change from 1 October 2013 WoF numbers would reduce from April
               2014 a full eight months earlier.
         –     Publicity - MTA members are already reporting that the public are confused by the
               proposed frequency change. Those that own a vehicle that might be changed to an
               annual WoF believe they will have a year before requiring their next WoF
               irrespective of the expiry date on the label.
               NZTA will need to first give very clear information to the inspection industry well in
               advance of change so this can be passed onto the motoring public. NZTA will also
               need to provide very clear information to the public themselves.

         While supporting phasing in of the WoF, MTA recommend that this begin from
         1 April 2014. This gives industry a reasonable time to plan and implement changes to
         their business to reflect the reduction on WoF numbers.

Page 5                MTA Submission – Compliance Amendment (No 2) 2013                  May 2013
•     Inspection frequency veteran and vintage vehicles
           MTA recommendation
           MTA submits that Veteran and Vintage vehicles should be issued a WoF annually.

           We also support the current definitions:

           –     veteran vehicles – manufactured before 1 January 1919
           –     vintage vehicles – manufactured on or after 1 January 1919 and are at least
                 40 years old on the date that they are registered, reregistered or licensed.

3.   Additional point affecting the Warrant of Fitness inspection frequency
     •     WoF at the time of change of ownership
           MTA recommendation
           MTA submits that NZTA actively promote that vehicles require a Warrant of Fitness no
           older that 30 days at the time of sale and provide greater enforcement of the Compliance

           The Compliance Rule currently requires that ‘a person who sells a vehicle that may not
           be operated on a road without a current warrant of fitness, must ensure that it has been
           certified for in-service fitness within one month before the date of delivery of the vehicle to
           the purchaser.’

           There are however, ‘exceptions’, clauses 9.12 (4) a) and b), where the purchaser is
           required to provide to the seller an undertaking in writing that:

           a)    for a vehicle whose WoF is not current the purchaser will not operate the vehicle
                 on a road other than for the purpose of obtaining a WoF, and

           b)    for a vehicle that has a current WoF issued more than one month before the date
                 of delivery the purchaser accepts that the vehicle has been certified one month or
                 more previously.

           In very few instances would the seller require the purchaser, or purchaser provide to the
           seller, any form of undertaking in writing. These clauses are not actively promoted or
           enforced by NZTA.

           The primary purpose of a WoF at the time of sale of a vehicle is consumer protection. A
           common reason for selling a vehicle is that there is something wrong with it. In many
           cases the seller hopes the fault will not be picked up by the purchaser until after the sale,
           ie that he/she can simply pass the problem on with minimum affect to them. This is often
           successful and of concern, particularly if a vehicle safety item is involved.

           The NZTA statistics available to MTA suggest that there are approximately 550,000
           vehicles requiring a WoF sold each year private to private. MTA believe the majority of
           these will be sold with a current WoF that is older than 30 days. In addition, with the
           advent of internet based sales, vehicles are purchased by a buyer located in a different
           city to the seller sight unseen.

           MTA have been advised by NZTA that a high percentage of complaints to them are from
           people who have just purchased a vehicle and want redress relating to a problem they
           have discovered very soon after the sale. This is certainly the case through the MTA
           Mediation line. If a private seller is involved generally there is very little that can be done.
           There might be redress against a WoF issuer but in many cases the WoF was issued
           many months earlier, possibly before the issue became apparent. Increasing the WoF
           frequency to twelve months for many vehicles will accentuate this problem.

           Promoting and enforcing the requirement for a new WoF at the time a change of
           ownership would reduce many of the issues that affect the safety of the vehicle at the
           time of sale. It would also serve as a useful consumer protection mechanism.

Page 6                  MTA Submission – Compliance Amendment (No 2) 2013                    May 2013
In Victoria Australia if a vehicle does not pass a roadworthiness inspection within 30 days
           before the sale it cannot be sold unless the vehicles registration is put on hold.
           Responsibility is then with the purchaser to make the vehicle safe and then pass the
           roadworthy before the registration is re-established.

           MTA request that NZTA actively promote that vehicles require a Warrant of Fitness no
           older that 30 days at the time of sale.

4.   Certificate of Fitness
     •      CoF B heavy vehicles – frequency change
            MTA support that the Certificate of Fitness variable frequency change from 3 to 9 months
            to 3 to 12 months with the default period remaining at 6 months.

     •     CoF A rental cars inspection period
           MTA recommendation
           MTA submits that light rental vehicles be given a Warrant of Fitness, annual for first year
           then every six months.

           A rental car is required to meet the same inspection criteria as the same type of car
           owned by a business or a private citizen requiring a WoF. If it is considered there is a
           conflict of interest then it could be required that a rental vehicle not be inspected by its
           owner, be this a company or individual. This would allow a more convenient and
           accessible service to be provided to the rental vehicle industry.

5.   Wider issues affecting vehicle inspection
     MTA recommendation
     That the many issues affecting the vehicle inspection and administration raised by MTA over a
     number of years be given consideration in Phase II of the WoF/CoF review.

     There were a wide range of ideas raised within the vehicle licensing reform consultation process
     affecting vehicle inspection beyond just frequency. MTA is looking forward to working with
     NZTA to develop an improved WoF inspection and administration to improve vehicle safety
     which is the intent of these ideas.

     Broadly the standards of inspection in New Zealand is regarded as meeting international
     practice. There are some ideas that if introduced would align the inspection with best practice.
     MTA considers quality objective testing would lead to improved fleet safety, lower operating
     costs to consumers and provide value to the New Zealand economy, improve human health
     outcomes and reduce greenhouse emissions.

     Some ideas were previously raised by MTA within our Vehicle Licensing Reform submission
     dated 31 October 2012. These are summarised in the addendum attached. We would suggest
     these are included in a wider consultation on inspection content and process as Phase II of the
     WoF review.

Page 7                  MTA Submission – Compliance Amendment (No 2) 2013                   May 2013
Addendum to the Compliance Rule Amendment Consultation
Review of the Warrant of Fitness Inspection and inspection process
MTA have over the years raised a number of issues relating to improvement of the WoF inspection
and WoF administration. These have been considered by NZTA with many of them put off to a period
when a major review of the WoF is underway. Right now a major review is underway and still many of
these issues have not been promoted for serious consultation.

In our submission dated 31 October 2012 to the Vehicle Licensing Reform MTA provided detail on
these issues and our request is that they be given serious consideration.

In summary these include:

•     WoF administration
      –    28 day WoF fee expiry period
           Remove of the 28 day WoF fee expiry period and replace this with a 15 day inspection
           expiry period.

            ~     Allow inspection agencies the option of charging a re-check fee up to 15 days from
                  the initial inspection.
            ~     Allow inspection agencies to charge a full inspection fee beyond 15 days from the
                  initial inspection.


            ~     CoF inspectors can charge a fee for rechecks
            ~     agencies are expected to include a fee in their inspection charge to cover
                  re-inspections - this penalises motorists whose vehicle passes first time
            ~     the current commercial environment allows repairs to be completed within 15 days
            ~     many motorists choose to believe they are allowed to drive their vehicle in the
                  28 day fee expiry period – allowing a recheck fee to be charged and requiring a full
                  check after 15 days would reduce the number of unsafe vehicles on the road and
                  the time they are on the road.

      –     WoF Online
            Update WoF Online to provide at least the same level of service as the TSDA direct link
            to LATIS.

            Now that most WoF agencies have updated from dial-up modems and are using or have
            broadband available WoF Online could be redeveloped to provide the same service level
            as LATIS used by Transport Service Delivery Agents. From a WoF Online agency’s
            viewpoint there are a number of improvements that could be made, the key one being
            easy access to a vehicles recent inspection history.

•     WoF inspection
      Inspection improvement has been considered. MTA requests the following issues be given
      consideration for inclusion in the Warrant of Fitness inspection

      –     Brake fluid for water content
            Brake fluid absorbs water which causes it to boil at lower temperature. Boiling brake fluid
            causes brake failure.

      –     Wheels off brake inspection
            Brake components can only be effectively inspected and measured after the wheels have
            been removed.

Page 8                   MTA Submission – Compliance Amendment (No 2) 2013                May 2013
–     Brake testing equipment upgrade
           Tapley/Bowmonk meters cannot prove brakes meet legal performance requirements and
           should be removed as approved equipment. Electronic decelerometers or in floor test
           equipment should remain approved.

     –     Shock absorber performance testing
           Effective shock absorber performance is essential for vehicle handling and correct
           function of antilock braking and electronic stability control.

     –     Suspension, steering and wheel alignment improved test
           Incorrect wheel alignment is an indicator of suspension wear.

     –     Tyre pressure check
           Visually incorrect tyre pressure is already a reason for rejecting a WoF. Checking the
           actual pressure to ensure it is safe for the vehicle is a simple upgrade.

     –     Battery security
           An insecure battery can cause fires in the event of an accident by shorting out and
           sparking against vehicle bodywork.

     –     Constant velocity joints and boots
           Rear wheel drive shafts and universal joints are included in the current in-service
           inspection. The front constant velocity joint, an essential part allowing a vehicle to be
           steered, and its boot should also be included.

     –     Light trailer gross vehicle mass marked on the trailer.
           Light trailer braking and coupling requirements are differentiated on a trailer weight basis.
           There is no requirement to include a GVM on the trailer to clarify its load limit and brake
           and coupling equipment requirement.

     –     Method of checking tyre tread depth
           The current method of checking tyre tread depth can allow an unsafe tyre to be passed.
           An improved check procedure would overcome this.

•    Vehicle Emission testing
     MTA recommendation
     That a government working group be set up to assess the benefits of in-service vehicle
     emission testing in New Zealand.

     Vehicle emission testing is undertaken in many overseas jurisdictions either stand alone or in
     conjunction with vehicle safety inspection. The government have taken a lead from overseas
     jurisdictions when undertaking a review of vehicle inspection frequency in New Zealand. MTA
     request vehicle emission testing undertaken in other markets also provide a lead in undertaking
     this service in New Zealand.

•    Opening the CoF market to other providers
     MTA support the initiative to set up an industry working group to consider the proposal to open
     up the CoF market to other providers.

     MTA have undertaken a survey of 154 MTA heavy vehicle repairers on their views on
     undertaking CoF. Members were asked to list in order their preferences relating to:

     –     No change – only Independent Testing Stations (TSDAs) should be able to undertake
           CoF B inspections.
     –     A partial change – where an approved and independent CoF B inspector could inspect
           heavy vehicles inside a qualifying repairer/fleet operator premises, assuming that
           appropriate test equipment was available.

Page 9                  MTA Submission – Compliance Amendment (No 2) 2013                  May 2013
–     Open up the CoF B market, meaning repairers could participate in the CoF B market if
           they met premises and equipment criteria and employ suitably trained and authorised
           inspection staff. Also TSDAs would be permitted to enter the repair market, assuming
           they had suitable premises.

     The preferred choice of the 64 that responded was:

            Number               Preference               Percentage
               25                 No change                  39%
               14               Partial change               22%
               25            Open up the market              39%

     This spread indicates a wide range of views are held. It indicates formal consultation is
     necessary to understand the effects of changing CoF inspection participation on delivery of CoF
     across New Zealand, inspection quality and affects on industry participants and the wider public
     who share the roads with heavy vehicles.

Page 10                 MTA Submission – Compliance Amendment (No 2) 2013              May 2013
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