NAIVE IMPORT DECISION GUARANTEES POOR CONSUMER OUTCOMES
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OFFICIAL PUBLICATION OF AADA
ISSUE 12 MARCH 2016
NAIVE MINEFIELD AWAITS
ON PARALLEL IMPORTS
IMPORT DECISION INDUSTRY REACTIONS
GUARANTEES TO IMPORT DECISION
GOVERNMENT RATIONALE
POOR CONSUMER FLAWED ON IMPORT DECISION
OUTCOMES WANT MORE AFFORDABLE CARS?
EASY - TAX THEM LESS
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WELCOME Australian Automotive Dealer Association
CONTENTS ISSUE 12 MARCH 2016
CONTACT AADA WELCOME
P.O. Box 4530
From the AADA Chairman...................................................................................................................................... 4
Eight Mile Plains, QLD 4133
From the AADA CEO............................................................................................................................................... 4
CONTACT AUTOMOTIVE DEALER
Level 1, 350 South Rd POLICY
Hampton East, VIC 3188 Terry Keating: Government Naive On Personal Vehicle Import Issue............................................................... 5
ABOUT US Issue No.12 March 2016 Parallel Imports Minefield .................................................................................................................................6-7
Parallel Imports: Other Reactions ........................................................................................................................ 8
PUBLISHER: AADA
The Government’s Rationale ................................................................................................................................. 9
MANAGING EDITOR: Changes to Parallel Import Laws – A Legal View ........................................................................................10-11
Luke Prendergast Federal Government Backs Plan To Save Holden Plant .............................................................................12-13
ART DIRECTOR: Vergil Dela Cruz QLD Committee Recommends Uniform Lemon Laws ...............................................................................14-15
AADA Advocates In WA Motor Vehicle Acts Review .......................................................................................... 16
ADVERTISING MANAGER: Geoff Vine Senate Committee Rejects Controversial Greens Bill ..................................................................................... 17
geoff@automotivedealer.com.au
Mobile: 0413 854 779
FEATURES
PRODUCTION MANAGER: Stace Nagle Vale Michael Tynan – A Giant Of The Industry ................................................................................................... 18
production@automotivedealer.com.au Want More Affordable Cars? Easy – Tax Them Less ........................................................................................ 19
Phone (03) 9576 9944 | Fax (03) 9576 7277 Dealer Profitability at 1.5% .................................................................................................................................. 20
The Battle For Vehicle-Generated Data ........................................................................................................21-22
AUTOMOTIVE DEALER More Manufacturing Jobs To Go ........................................................................................................................ 22
DELIVERY/CHANGE OF ADDRESS
Yazaki Corporate In Breach Of Cartel Laws ...................................................................................................... 23
(03) 9576 9944 or
2016 KPMG Automotive Executive Survey ......................................................................................................... 26
editor@automotivedealer.com.au
Another Massive Air Bag Recall ......................................................................................................................... 27
EDITORIAL Unconscionable Conduct In Business-To-Business Dealing .......................................................................... 28
editor@automotivedealer.com.au Insurers Warned Over Automatic Renewals ..................................................................................................... 29
EDITORIAL & ADVERTISING OFFICE ATO To Broaden Tax Transparency .................................................................................................................... 30
Lvl 1, 350 South Rd, Hampton East, VIC 3188 ATO To Focus On Large Business ...................................................................................................................... 31
Capital Gains Tax Changes To Help Growth – Minister .................................................................................... 31
DISTRIBUTION: 4,986
Federal Government Push To End Superannuation Rate Rises ..................................................................... 32
No responsibility is accepted by the publisher NTC Calls For Input On Automated Vehicle Laws ............................................................................................ 32
for the accuracy of information contained Deceptive Conduct Under ACCC Microscope .................................................................................................... 33
in advertisements in the Automotive Dealer
ANCAP Works With Automotive Industry To Improve Road Safety ................................................................. 35
magazine. Publication of any advertisement does
Australian School-Based Apprentice Of The Year Says Genuine Is Best ....................................................... 36
not constitute endorsement by the publisher
of any product, nor warrant its suitability. FCAI Welcomes Consultation On Reducing CO2 Emissions In Light Vehicles ............................................... 37
Advertisements are published as submitted by Mark Leads VIC Dealer Community To Raise $2.5M For Kids Cancer ......................................................38-39
advertisers. UK Report: Are Dealers ‘Attractive’ Again? ....................................................................................................... 40
To Train Or Not To Train? ...............................................................................................................................40-41
COPYRIGHT
Call For New Laws As Petrol Prices Finally Fall .............................................................................................. 41
No part of this magazine may be reproduced
without the publisher’s written permission. Top 10 New Techs for 2016 ............................................................................................................................42-43
Building Better Outcomes at the 2016 AADA Convention ................................................................................ 43
CONTRIBUTORS
Why Don’t Motor Sport Commentators And Journos Make Start Of Season Predictions? .....................44-46
The views expressed in Automotive Dealer by
Potential New Monaro Wows Detroit Auto Show .............................................................................................. 47
external contributors and advertisers are not
necessarily those of AADA.
SALES AND MARKETING
Salespeople: When Is Too Much Follow-Up? .................................................................................................... 48
Share your WORKPLACE RELATIONS
Social Media Policy: Why Your Business Needs To Have One ......................................................................... 50
thoughts with us. EDITORIAL
Got a question, comment or Jim Richards And F1s Headline Phillip Island Classic ................................................................................52-53
Next Generation Of Auto Engineers On Display ................................................................................................ 54
want to tell us your theory on
the meaning of life? Write to us
at editor@automotivedealer.
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addressed to the editor and
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WELCOME Australian Automotive Dealer Association
FROM THE AADA CHAIRMAN
When, in 2014 and at his request, I took Firstly, be assured we are working to
over Michael’s role on AADA as the prepare the best submission to ASIC that
NSW director, he finished our telephone we can on the finance flex matter. To ASIC’s
Terry Keating conversation with the words, “God bless credit, they have allowed us some extra
AADA Chairman you”. At the time I thought it was an time to consult with interested parties and
unusual comment between two Dealers, prepare a quality submission. We will keep
but was struck by the sincerity and warmth you posted.
O
n the 8th of February I attended the of his words.
funeral of Michael Tynan OAM. The second issue is the surprise
Only at his funeral did I realise that announcement by Minister Fletcher on
Michael was a major new car Dealer in the this comment was his trademark way of personal imports of ‘new’ vehicles. Sadly,
Sutherland Shire area of Sydney, where he thanking people. the policy is flawed and we expect the
had operated for many decades. He was for public will become much better informed
On behalf of all of our members I would on the pitfalls in the near-two-year
a number of years prominent in local affairs
like to offer our condolences to Michael’s timeframe before its introduction.
as the mayor of his shire, as well as a past
family and our respects to his many friends
president of MTA NSW and, of course, the
and colleagues. Interestingly, the Minister describes a new
inaugural NSW director on AADA.
car as being less than one year old and with
On your behalf may I say, “God bless you, less than 500km. Try convincing your local
He was a man who was not only very
Michael”. Consumer Affairs office that a one-year-old
successful within, but also gave much back
to, our industry. Many businesses in the car is new.
Throughout our magazine and other press
wider motor industry, not just new car releases we address two new and equally
Dealers, may not know how great a debt of important issues.
gratitude they owed to Michael.
FROM THE AADA CEO
One of the central themes of our earlier, Another major risk will be customers’
detailed submissions to the Government on limited protection under Australian
this subject was the undeniable, empirical Consumer Law.
Bruce McDonald fact that the Australian new car buyer has a
Finally, but very importantly, a vehicle
phenomenal choice of makes and models.
AADA CEO identified as a ‘PIV’ will undoubtedly have
The feedback we had received was that the a less attractive resale value than a vehicle
R
ecently I participated in a media Government understood our argument. sold and serviced by Australia’s network of
conference at Parliament House, After all, the case is compelling. franchised Dealers.
Canberra.
Hence our strong, negative reaction This announcement is still very recent.
Fellow participants in the conference to their unexpected announcement, Much discussion and debate will be
were Tony Weber, CEO, Federal Chamber especially following the Government’s wise undertaken between now and 2018. All
of Automotive Industries (FCAI), and decision to reject the Harper Productivity parties, including AADA, will be expected
Geoff Gwilym, Executive Director, VACC, Commission recommendation to allow the to understand and, where appropriate,
representing the MTA. importation of used vehicles. confront the ‘devil in the detail’ of the
Government’s policy.
Senator Nick Xenophon, Independent The other major concern I strongly voiced
Senator for South Australia, arranged the on behalf of Australia’s franchised Dealers I assure you AADA will play a major role
event. Its purpose was to advise the media was the transfer of risk and associated in this vital area for our Dealers. One of
of our strong disappointment with the uncertainty this announcement meant for our major responsibilities is to support our
earlier announcement made by Minister car buyers who desired to purchase a PIV. franchised Dealers, who have invested tens
Paul Fletcher regarding the Government’s of millions of dollars in facilities, training
unexpected decision to allow personal In the flawed belief that Australian car and diagnostic equipment to ensure their
importation of near-new vehicles (PIVs) buyers need more choice, the PIV process customers’ experience is consistently
from 2018. will expose consumers to many risks and outstanding.
uncertainty, including the vehicle’s history,
My ‘headline’ comment to the media was lack of support from their local selling Please contact me at any time for an update
that AADA was surprised and disappointed Dealer (because there isn’t one!), no ADR to this matter.
by the announcement. compliance or ANCAP safety rating and
lack of manufacturer warranty. In the meantime…watch this space!
POLICY Australian Automotive Dealer Association
TERRY KEATING:
GOVERNMENT NAIVE ON
PERSONAL VEHICLE
IMPORT ISSUE
I
am amazed at the naiveté of the Federal car where they can, but if a vehicle requires problems with balancing his budget. The
Government’s decision to allow the parallel diagnostic equipment unique to that model deficits are scary. Yet this same administration
importation of motor vehicles by individuals. and not available in Australia, where to then? says it will happily ship offshore a raft of
government revenue to either the UK or Japan.
For a start, a Federal Government Minister has You will all be aware of other issues, such
put out an implied promise that buyers will as lack of recall notices, limited warranty If our federal masters were genuinely serious
save money by opting to purchase overseas. (international warranty is usually two years), about making new cars more affordable in
This is highly misleading, as the facts suggest inappropriate cooling systems and, of course, this country, they should look at the tax take
that anyone with a budget up to $100,000 very questionable resale value. on every vehicle sold. Minister, do the public
would be seriously out of pocket on the a real favour. Get rid of the Luxury Car Tax.
purchase price alone, without factoring in If this policy is to survive it is incumbent on Take a look at the stamp duty and registration
all the other problems they would face. Even the minister to ensure potential buyers are costs. Have a think about how much new car
where the transaction price is much higher, it fully informed, otherwise this government has Dealers in this country pay to state and federal
put out false hope and hidden the fine print. authorities in income tax, payroll tax, land
would in most cases be line ball or worse to
opt for an offshore purchase. tax, workers compensation fees and the super
It is also amazing that the Minister defines
guarantee levy.
a new car as less than one year old and with
None of this takes into account the many other
less than 500km on the speedo. The average I’m not suggesting some of these imposts
potential problems a buyer would encounter.
Australian has a very clear definition of ‘new’, should not be there, but they are costs we incur
For example, luxury vehicles made to
as do we. Cars of that age and mileage are because our employees want and are entitled
United Kingdom specifications have engines
secondhand. This, of course, then opens up the to a decent standard of living.
calibrated to run on low sulphur content fuel.
opportunity for organised crime to steal cars
That quality of fuel is not available in Australia.
to order. If it is under one year old the mileage Finally, I have had many calls and emails from
The end result of using sub-optimal fuel is loss is irrelevant. They will simply ‘give it a haircut’ Dealers right around Australia. We should all
of performance and possible (that may well and, bingo – 500km. That also opens the contact our local member and make sure he or
be probable) engine degradation. Any such possibility that some unsuspecting buyer who she fully understands the fallout. If a buyer of
problem would not be warrantable, as the got a great bargain has no title to the goods. a personal import has major problems, we will
owner’s handbook stipulates the type of fuel to And I could go on. probably not be able to help them. Nor will
be used. Consumer Affairs. Nor, I suspect, will a lawyer.
I am staggered when we read daily that Their only redress will be their local member.
Servicing in Australia could also be an issue. Treasurer, Scott Morrison, is having enormous
Australian Dealers will gladly service any
automotivedealer.com.au | MARCH 2016 | 5
POLICY Australian Automotive Dealer Association
PARALLEL IMPORTS MINEFIELD
T
he Federal Government’s decision to Former AADA Chairman, Ian Field, said the process, for the life of the vehicle. These are not
allow the private importation of new- change of heart opens up potential minefields consumer durables that get thrown away. They
near cars has huge potential negative for Australian Dealers and consumers. last for a long time, they are highly technical
ramifications for the local industry, AADA and they require competent people to maintain
believes. “In Australia, it is part of the Franchise them. But they also require educated drivers
Agreement that a Dealer must personally who know what it is they’re supposed to be
The Government announced planned changes deliver the vehicle to the customer. You can’t doing. If there is no process, if we’re going to
to the Motor Vehicle Standards Act 1989 just put it on a truck and send it to them; cut out that process completely and they’re just
in early February, claiming it would “give you have to personally deliver it to explain going to have them delivered to the wharfs in
more choice for car buyers and save industry the systems and make sure the customer is Australia, what we’re saying is, ‘good luck!’”
over $70 million a year in lower regulatory familiar with their responsibilities as well as
compliance costs”. the Dealer’s responsibilities, and explain the Mr Field said the media was making a big deal
warranty procedure. It’s part of the process,” of customers being able to bypass Australian
The law will be changed so that, from 2018, a he said. Dealers, but in reality the new policy would
consumer will be able to personally import a just send business to overseas Dealers.
new car or motorcycle from another country “If our systems are compatible with the vehicle
with comparable standards to Australia, up to on-board computer systems, we will be able “Where do they think they’re going to buy
once every two years, if specified conditions to service them, but they are not necessarily them from? The factory’s not going to supply
are met. spec-ed exactly the same. They have different them. Factories supply them to their Dealer
communication systems for different body; they don’t sell them to the public. If this
The vehicle must be a motorcycle or right- markets and we won’t necessarily have the is about the Tesla model, that somehow the
hand drive passenger vehicle, be no more than communication technology to communicate factories are going to start delivering them
12 months old and have no more than 500km with the car and be able to service it easily. I anywhere in the world, that’s not going to
on the odometer. know of one instance where a guy bought a happen.
car in South-East Asia and no matter what
The Australian Government will specify the they did, they just couldn’t fix it. It was really This is the point politicians miss: if it’s that
countries considered to have comparable a compatibility issue with the on-board easy and cars are that much cheaper, do they
standards. Of the world’s right-hand drive computers. They actually sent him to Malaysia think the Dealers aren’t going to do it? If that’s
countries, Japan and the United Kingdom to get fixed! what it’s all about – letting us go and buy
currently meet the standard. Other countries them – well I don’t want to, because I won’t
may be included upon reaching a comparable The manufacturers understand it’s not just have the support that I need to look after my
standard. the sales process; it’s the sales and support customers.”
6 | MARCH 2016 | automotivedealer.com.au
“It’s not just selling the vehicle; it’s all of the assumes it’s self-interest. The trouble is the
stuff that comes with the lifetime ownership, people who own the Ferrari will go to the
and at the end of the ownership period – I Australian Ferrari Dealer and say, ‘what are
can tell you this as a Dealer – the resale value you going to do about it?’, and what we’re
of a car that is not compliant to Australian saying is, we don’t know what to do with these
specifications – in other words, a vehicle that vehicles. We don’t want to be embarrassed or
does not have an Australian compliance plate have the customers who buy these products
– is something we just don’t want to know. being embarrassed. We tried to tell the
We do not buy them. My company’s policy Government that this is fraught with issues
is we do not buy cars without an Australian and will cause enormous consumer issues – for
compliance plate. So I don’t know where us, because of bad policy.”
they’re going to sell them. Maybe they can sell
them back to the English Dealer they bought In attempting to improve choice for
them from.” consumers, the Government had opened a can contribution Dealers make,” he said.
of worms and slapped Dealers in the face, Mr
Mr Field said consumers would be vulnerable Field said. “The government makes a lot of money from
under the new policy. the Australian auto industry. Why would it
“Dealers are a community of business people want to divert some of that income to other
“A lot of these cars will be bought online, sight who employ 68,000 people in Australia and countries’ governments?
unseen. What happens if the car arrives and it’s are the largest skills training provider in the
not quite right?” he said. automotive sector. Between them, Dealers “They’ve made the decision on the
have $17 billion-worth of facilities around the philosophical view that somehow cars will
“How will taxes like LCT be applied to these country. We make a significant investment be cheaper. The industry disputes that, but
cars? Will GST be applied to them? Is someone in the country in terms of employment and we do believe it will create lots of problems
going to make sure that the emission control training, and the Government seems to for consumers that Dealers will be asked to
system is actually working? want to bypass that and, instead, support rectify. And we’re not able to do that, for these
Dealerships in London and Tokyo. They reasons.”
“When we argue this way the Government
are clearly undermining the value of the
GERMAN
TECHNOLOGY
Developed for Australian conditions
L U B R I C A N T S .
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P E O P L E .
POLICY Australian Automotive Dealer Association
PARALLEL IMPORTS:
OTHER REACTIONS
currently offered consumers the highest
possible level of protection when it comes
to purchasing a new motor vehicle through
an Australian Dealership, but would not be
able to offer the same protection with parallel
imports.
“Brands selling in this country make
substantial investments in Australia by way
of Dealerships, workshops, technology and
training to support and service their products.
“This means consumers can be certain
their vehicles can be serviced and repaired
appropriately, and that recalls are captured so
consumers are informed if something needs
to be fixed.
“The Government failed to acknowledge that
T
he Government’s decision to allow Senator Xenophon also highlighted the reason Australians who personally import a vehicle
parallel imports met with immediate given by the Government for the import rules made for another country may end up with
opposition, not just from Dealers but to be relaxed – the impending closure of local a vehicle that does not meet their needs or
also the Federal Chamber of Automotive auto manufacturing – as being inconsistent operate as required in Australian driving
Industries (FCAI), the Victorian Automobile with the Government’s recent announcements conditions.”
Chamber of Commerce (VACC) and to support a proposal by Punch Corporation
Independent Senator for South Australia, Nick to keep making cars in Australia. Mr Weber said the FCAI had, over the
Xenophon. past two years, urged the Government to
“This move is in the opposite direction and investigate the implications the proposal
In a Canberra media conference with FCAI crashing head-on with the Government’s would have on not just Australian consumers,
Chief Executive, Tony Weber, AADA CEO, support for reviving auto-making in Australia,” but also on border security and quarantine,
Bruce McDonald, and VACC Executive he said. automotive Dealers, service and repair
Director, Geoff Gwilym, Senator Xenophon networks, future intelligent transport and
urged the Government to scrap the revised “The Government can’t have it both ways on communications systems, and on the
policy. this. Slackening the rules on parallel imports automotive brands that invest in the tools,
will make it harder for a local car-making training and technicians available in this
The decision will allow a flood of imported industry to be revived post-2017.” county to service a modern motor vehicle.
vehicles into the country, which Senator
Xenophon sees as a dramatic loosening of Mr Weber said the FCAI was “extremely “The industry supports the closer
current safeguards in relation to vehicles being disappointed” in the announcement, saying harmonisation of ADRs with international
privately imported. the policy decision would mislead consumers. standards, and the industry has been working
“Not only is the Government taking a ‘buyer with the Government on this for a long time.
“Anyone who privately imports a vehicle
beware’ sentiment that would see many But the reality is that there are only a few
under these new proposed rules will be
Australians caught in high-risk situations, with standards that are still different and we ask
playing ‘unlucky dip’ because they won’t know
their vehicles being outside established service the Government to commit more resources to
what they will be getting and the warranties
networks, the Government is misleading hasten their completion,” he said.
consumers get now won’t apply,” he said.
consumers by telling them a used vehicle with “The best way to continue to deliver a greater
“It will also undermine the jobs and Dealer 500km or one that is 12 months old is new,” range of choice in new cars and motorcycles is
networks that have cost billions to establish he said. to accelerate the removal of unique regulatory
and could end up costing the rest of us more as
Mr Weber said Australian Consumer Law standards and administration.”
those economies of scale are undermined.”
8 | MARCH 2016 | automotivedealer.com.au
POLICY Australian Automotive Dealer Association
THE GOVERNMENT’S RATIONALE
T
he Hon Paul Fletcher MP, Minister for and Enthusiast Vehicles will be
Major Projects, Territories and Local revamped, and limits on the
Government, said the changes to parallel number of vehicles that can be
laws would give consumers more choice in imported by each Registered
three main ways: Automotive Workshop will be
removed.”
1. Personal import of new motor vehicles
In line with the Australian
“With around 30,000 vehicles a year expected Government’s deregulation
to be personally imported, most Australians agenda, the changes will
will continue to purchase vehicles directly also simplify the pathways
imported by manufacturers and sold through for importing non-standard
their existing Dealer networks,” Mr Fletcher vehicles used for special
said. purposes, such as mining
equipment, exhibition vehicles
”These new arrangements, however, will offer and vehicles not permitted for
consumers greater choice. If a manufacturer general road use.
chooses not to sell a particular model in
3. Removal of $12,000 special duty on while maintaining high standards for vehicle
Australia, a consumer may now have an option
imported used vehicles safety and environmental performance.”
to source this model overseas.”
The Government will amend the Customs The changes will also simplify the importation
2. Improvements to existing schemes for
Tariff Act 1995 to remove the $12,000 special and certification arrangements for vehicles, to
specialist and non-standard vehicles
duty on imported used vehicles from 2018. improve efficiency and remove unnecessary
“The changes will improve the existing red tape for businesses.
“Although this duty is not often applied, it is on
arrangements for importing exotic, rare,
the statute books, costing more to administer Under the new law there will no longer
classic, collectable and special purpose than it raises – and is seen by consumers as be a requirement to physically affix an
vehicles. a hurdle to importing secondhand cars even identification plate to vehicles. Instead the
in the specific circumstances where such vehicle’s details will be entered on a new
“Today, individuals can import a car or
imports are permitted. By removing this duty Register of Approved Vehicles – an online,
motorcycle under concessional arrangements
we will provide more options for Australian publicly searchable database of new and
if it was manufactured before 1 January 1989.
consumers,” Mr Fletcher said. used vehicles approved for use in Australia.
Keeping this fixed date would have steadily
Mr Fletcher said this measure would save
reduced the scope for importing genuine “Industry will enjoy lower regulatory manufacturers an estimated $18 million per
classic cars into the future. The new rule will compliance costs, as these changes to year.
allow a vehicle which is at least 25 years old to the Motor Vehicle Standards Act will
be imported under these arrangements. align Australian rules more closely with Legislation to implement the changes will be
international vehicle standards. This will introduced into Parliament later this year.
“For newer vehicles, the Register of Specialist reduce regulatory costs for manufacturers
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POLICY Australian Automotive Dealer Association
CHANGES TO PARALLEL
IMPORT LAWS - A LEGAL VIEW
of Vehicle Standards. The identification or
Evan Stents compliance plate entitles the vehicle to be
Lead Partner, registered in Australia and sold. All imported
Automotive Industry new vehicles sold commercially in Australia by
Group | HWL manufacturers come with this certification and
Ebsworth Lawyers the identification or compliance plate.
Vehicles (new or used) without an
O
identification or compliance plate may not
n 10 February 2016, the Federal Changes to legislation mean you could
currently be imported unless they have a
Government announced it will relax buy your next Ferrari overseas.
specific ‘Vehicle Import Approval’. A Vehicle
the restrictions that apply to all imports
Import Approval can take the form, for
of motor vehicles (whether new or used),
example, of a Used Import Plate or a Personal restrictions on the parallel import of used
including parallel imports, under the Motor
Import Plate. Approval can be applied for on motor vehicles.
Vehicle Standards Act 1989 (Cth).
a case-by-case basis, according to a variety of
The announcement comes in the context of eligibility criteria which vary depending on The Federal Government’s consultation
the Government’s review of the Motor Vehicles factors such as the age of the vehicle and its use process included two detailed submissions
or the applicant for approval. from AADA. In its submissions, AADA has
Standards Act, having regard to (among other
been opposed to the de-restriction of parallel
things) the end to local Australian motor
Obtaining approval is not a simple process and imports of used cars, in particular citing the
vehicle manufacturing by 2017 and what the
quotas can apply to the number of approvals safety and financial risks posed to consumers
Government considers to be high current
granted under particular eligibility criteria who purchase imported used cars from
regulatory compliance costs.
(for example, such as under the ‘Low Volume overseas suppliers.
The Federal Government has said that relaxing Scheme’ for new vehicles on the register of
Specialist and Enthusiast Vehicles). New cars
the restrictions for new motor vehicles,
along with other legislative reforms, will Despite its stance on the parallel import of
There is also a special customs duty of $12,000
save the automotive industry $70 million in used cars, the Federal Government announced
that can apply to the import of used vehicles.
compliance costs. that it would amend the Motor Vehicle
Reforms to existing laws Standards Act to reduce existing restrictions on
Parallel imports
the parallel import of new motor vehicles.
Existing laws have had the practical effect of
In the context of motor vehicles, the term
heavily restricting the parallel import of both Precise details of the amendments are yet to
‘parallel import’ refers to a vehicle imported
new and used motor vehicles that do not have be released and the Government has stated
through private means, without the
an identification or compliance plate. There that they will be refined through further
involvement of an overseas manufacturer’s
have been strong policy reasons for those consultation with stakeholders. However, the
local distribution and/or Dealer network.
restrictions, even though those policies are headline changes are that the Government
‘Parallel imported’ cars are also known as ‘grey
now the subject of change. will:
imports’.
Used cars 1. no longer require imported vehicles to
Existing laws
carry an identification or compliance
In 2015, the Harper Review (an independent plate (instead there will be an online
Under the current Motor Vehicle Standards
review of Australia’s competition law and register of approved vehicles)
Act, it is prohibited to supply new imported
policy) recommended that restrictions on
vehicles unless they are certified as ‘standard’ –
the parallel import of used motor vehicles 2. allow consumers to personally import
that is, they comply with all applicable vehicle
be scrapped. However in response, on 24 ‘new’ vehicles (without a compliance
standards (such as the Australian Design Rules
November 2015, the Federal Government plate), on the following conditions:
and emissions standards) and have a vehicle
announced that, following a consultation
identification plate (or ‘compliance plate’) (a) The vehicle must be imported
process, it does not intend to reduce existing
fitted with the approval of the Administrator
10 | MARCH 2016 | automotivedealer.com.aufrom a country with ‘comparable Other reforms c. Mobility – vehicles manufactured with
standards’ to Australia’s - at present the special features to assist people with a
Government has acknowledged that While the Government does not propose to disability.
Japan and the United Kingdom (both change the existing eligibility criteria for the
right-hand drive markets) meet this personal import of used cars, the proposed d. Rarity – vehicles of which only small
standard for cars, and that motorcycles reforms will modify how those criteria are quantities have been produced
could also be imported from the USA assessed and approvals given. For example,
under the proposed reforms the Government e. Left-hand-drive – vehicles originally
and the EU.
will agree to the following: manufactured as left-hand-drive of
(b) The vehicle must be less than 12 which right-hand-drive versions are
months old and have no more than 1. Remove quotas on the number of vehicles not available in any other country.
500km on the odometer, that can be imported by ‘Registered
Automotive Workshops’. 3. Adjust the ‘older vehicle’ criterion from
(c) A limit of one vehicle every two years vehicles manufactured before 1989 to
will apply. 2. Allow imported used vehicles to be vehicles older than 25 years.
entered on the Register of Specialist and
3. accelerate the process of harmonising Enthusiast Vehicles if they meet any one Implementation of new laws
the Australian Design Rules with of the following five criteria:
The Government’s planned reforms to the
international standards, and
a. Performance – high-performance Motor Vehicles and Standards Act are expected
4. under the Government’s reform plans, vehicles with specifications (e.g. power to be introduced in 2018. ‘
imported new vehicles will undergo to weight ratio) significantly superior
Parallel Imports - As per our previous contributions
1.
inspection by an independent third party. to mainstream vehicles in Australia - with Evan’s portrait and title ‘Lead Partner,
Some differences in the ‘comparable Automotive Industry Group | HWL Ebsworth
standards’ are proposed to be addressed b. Environmental – vehicles that offer Lawyers (see page 24 of the December edition for an
through modification requirements environmental performance (e.g. example); and please also add the following text at
(for example, in the context of child emissions of carbon dioxide per km) the foot of the article:
restraints). significantly superior to mainstream
vehicles in Australia This article was written by Evan Stents - Lead Partner
and Christian Teese - Associate, Automotive Industry
Group | HWL Ebsworth Lawyers.
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ancap.com.auPOLICY Australian Automotive Dealer Association
FEDERAL GOVERNMENT BACKS
PLAN TO SAVE HOLDEN PLANT
F
ederal Industry Minister, Christopher He said if Mr Dumarey was successful in “A lot rests with the decisions that General
Pyne, has backed a Belgian businessman’s buying the plant from Holden and produced Motors make in Detroit and that’s why I’ll be
plan to keep Holden’s South Australian enough cars, he would be able to access money writing to the chairman of General Motors in
manufacturing plant open past its current from the Federal Government’s Automotive Detroit, to the senior executive members there,
planned closing date in 2017. Transformation Scheme until 2021. encouraging them to have a very open mind to
Punch Corporation’s proposal.
Guido Dumarey, head of Punch International, “As the Industry Minister, my priority is to
wants to keep building the Holden create jobs and growth, whether it is in South “I think they’re waiting to see a serious
Commodore and has asked Australian Australia or whether it is anywhere else in the business case. Multi-national corporations are
governments for support. country,” Mr Pyne said. quite bureaucratic and I imagine they have
quite serious processes to go through, but
It is understood Mr Dumarey is seeking “I’m hopeful, but I’m not getting over-excited there are a couple of big positives for General
substantial assistance via the $800 million because I don’t want the workers at Holden to Motors. One is if they can seriously pull
have two sets of periods of grieving.” off the keeping open of the plant at Holden
Automotive Transformation Scheme. Mr Pyne
said he was behind the plan. and work with Punch, it’ll do a lot for their
Mr Dumarey successfully turned a General
reputation in Australia. And, of course, if
Motors facility in France from a failing
“Everybody in the Government would like Punch Corporation takes over the remediation
business into a profitable driveline component
there to be a car manufacturing business in of the site at Holden it’ll save them a great deal
constructor, and Mr Pyne told ‘Today Tonight’
Australia,” he told ABC Radio. of money.
he believes the Belgian can do something
similar here. “Having met with him a couple of times,
“I’ve engaged closely with him and with
General Motors and given him a letter I’m of the view that he can bring it off with
“Mr Dumarey does have a serious proposal,
of support from the Commonwealth government support and, of course, with the
representing Punch Corporation. He’s done
acquiescence of General Motors who are the
Government indicating we will do what we it before with General Motors at Strasbourg
ones who are selling the plant.”
can to help him realise his goal,” Mr Pyne said. in Europe and I strongly support the efforts
he’s putting into working with the South Mr Dumarey has met with South Australian
Mr Pyne said Mr Dumarey had a “track Australian, Victorian and Commonwealth and federal politicians to enlist backing for
record” of turning factories around. Governments,” Mr Pyne said.
12 | MARCH 2016 | automotivedealer.com.auhis proposal. He is also attempting to obtain “There’s a growing awareness that the decision there as a willing partner, obviously that ends
Holden’s rear-wheel-drive architecture to close the car industry was beginning to look it.”
intellectual property for the Commodore, like a pretty big mistake,” Mr Weatherill said.
as well as the facilities to keep building it. In Mr Weatherill is meeting GM executives in
early February he met with Prime Minister, “The fact that we’ve got somebody who thinks Detroit this month, in a bid to get them to sign
Malcolm Turnbull, who, Mr Pyne said, was he can continue to make the plant a car plant is off on the deal.
“very encouraging” of the plan. a very interesting development, I think.
A Holden spokesman was coy on the subject,
However, Mr Turnbull said the plan was still “With the low Australian dollar and the saying only that Holden and GM would assess
a long shot and warned South Australians circumstances that pertain now, if the decision all options if a party was interested in one of
against getting their hopes up. had been made in this environment I think a their sites.
very different decision would have been made.”
“It’s very encouraging, but I don’t think Every car maker has seen fit to pull out of
we want to get ahead of ourselves. They’ve Mr Weatherill cautiously endorsed the plan Australian manufacturing. AADA hopes Mr
obviously got to have talks with General but, like Mr Pyne, was careful not to get too Dumarey can arrest the decline.
Motors. There’s a lot of work that would need excited.
to be done,” he said on 5AA radio.
“If this [Mr Dumarey’s plan] stacks up and
South Australian Premier, Jay Weatherill, it’s the best use of the property from our
confirmed he had met Mr Dumarey more perspective, we will certainty get behind it,”
than once. He said that although several he said.
proposals have been put forward for use of the
“We’ve got to assess how realistic it is. The
Elizabeth site, Mr Dumarey’s would keep the
truth is, if an idea is just pie in the sky, if an
Australian automotive manufacturing industry
idea also requires a big Federal Government
alive.
buy-in and if the Federal Government isn’t
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automotivedealer.com.au | MARCH 2016 | 13POLICY Australian Automotive Dealer Association
QLD COMMITTEE
RECOMMENDS
UNIFORM LEMON LAWS
A
Queensland report into proposed (OFT) suggests that that while complaints Furthermore, the Committee recommended
‘lemon laws’ has recommended about motor vehicles are consistently one of the government consider appointing
amending the Australian Consumer the five subjects of all complaints lodged by independent assessors, with investigative
Law to establish nationally consistent laws consumers with the OFT over the last four powers and specialised knowledge in relation
applicable to new ‘lemon’ motor vehicles. years, complaints about ‘lemons’ represent less to motor vehicle disputes, to deal with the
than one percent of those1 . issues of how consumers prove that they meet
Late last year the Legal Affairs and the ‘lemon’ motor vehicle threshold criteria.
Community Safety Committee presented The Committee noted that while there was This would be an alternative to consumers
its report, “Lemon Laws – Inquiry into insufficient evidence presented to enable initiating Queensland Civil and Administrative
consumer protections and remedies for buyers it to draw a conclusion that ‘lemons’ are a Tribunal (QCAT) and/or court proceedings.
of new motor vehicles”, to the Queensland prevalent issue, what is very clear is that, where
Parliament.” a consumer has purchased what they perceive Additionally, the Committee made
is a lemon, it is of great individual significance recommendations that, for matters involving
The report is in response to the Queensland to that individual, with significant health and new motor vehicles with major defects,
Parliament’s request to enquire into and financial costs. Further, the Committee found the government change the Queensland
report on whether there is a need to improve there is risk that cars perceived to be lemons Civil and Administrative Tribunal (QCAT)
the consumer protections and remedies for are often on-sold, and where the defects are a jurisdictional limit of $25,000. Government
buyers of new motor vehicles with numerous, safety issue, unsuspecting purchasers of those Committee members recommend the limit be
severe defects that reoccur despite multiple vehicles and other road users could be at risk. removed, so no cap applies. Non-government
repair attempts or where defects have caused Committee members recommend the limit be
a new motor vehicle to be out of service for a In its final report, the Committee made increased to $40,000.
prolonged period of time. Such a vehicle has nine recommendations. Primarily the
been referred to as a ‘lemon’. Commonwealth Government should consider Cooling-off periods for new motor vehicle
the need for a national set of ‘lemon’ laws purchases are also to be reviewed, with
The report followed an extensive consultation in the Australia Consumer Law Review to consideration as to whether such periods
period in which AADA provided a submission be conducted in 2016. This would create a should be unable to be waived by the
to the Committee on 8 October 2015. This nationally consistent approach to ‘lemon’ laws. purchaser and whether disadvantaged persons
submission is available to read on the AADA should receive the benefit of a longer period.
As part of this nationally consistent ‘lemon’
website. Additionally, AADA CEO, Bruce
law, clear and practical definitions and Finally, the Committee recommended the
McDonald, presented to the Committee at a
provisions applicable to new ‘lemon’ motor State and Commonwealth Governments
Parliamentary hearing on 28 October.
vehicles must be developed in respect to implement business and consumer awareness
Data made available to the Committee mandatory time and repair limits, clarity programs, with the intention of educating
indicated that there were 118 responses to the as to when a supplier/manufacturer must industry and consumers on the intent of the
Government’s 2015 invitation to consumers repair, refund or replace a motor vehicle and Australian Consumer Law, including the
to share their ‘lemon experiences’. Data about an adequate definition of what constitutes a consumer guarantees.
complaints made to the Office of Fair Trading ‘lemon’ motor vehicle.
14 | MARCH 2016 | automotivedealer.com.authat the committee’s report may inform the - adequate definitions of ‘acceptable
Australian Consumer Law Review 2016. quality’ and ‘fit for purpose’
Recommendation 3: - clarity as to the distinction between
major and minor defects, and
The committee recommends that the
government appropriately amend existing - clarity as to the distinction between
Queensland legislation to ensure effective a ‘lemon’ and generic design
implementation of the committee’s manufacturing defects (requiring
recommendations included in this report, general recall) or serious design safety
but do so as part of any national approach defects (requiring urgent attention).
to ‘lemon’ laws for new motor vehicles in
Australia. Recommendation 6:
Recommendation 4: The committee recommends the Government
consider appointing independent assessors,
The committee recommends that the with investigative powers and specialised
appropriate mechanism to ensure a national knowledge in relation to motor vehicle
approach to changes in existing ‘lemon’ disputes, to deal with the issues of how
motor vehicle laws is to amend the Australian consumers prove that they meet the ‘lemon’
Consumer Law such that it specifically sets out motor vehicle threshold criteria (when
nationally consistent laws applicable to new established – see Recommendation 5), as an
‘lemon’ motor vehicles. alternative to consumers initiating Queensland
Civil and Administrative Tribunal (QCAT)
Recommendation 5: and/or court proceedings.
The full list of recommendations
The committee recommends the Recommendation 7:
Recommendation 1: incorporation of clear and practical definitions
and provisions into any nationally consistent The committee recommends the
The committee recommends the government laws applicable to new ‘lemon’ motor vehicles, government change the Queensland Civil
consider the contents of the committee’s including: and Administrative Tribunal (QCAT)
report, particularly the committee’s jurisdictional limit of $25,000, for matters
recommendations, as part of the government’s • mandatory time and repair limits, such as involving new motor vehicles with major
consideration of issues relating to, and its imposing limits on the number of times defects. Government committee members
participation in, the Australian Consumer Law a supplier/manufacturer can attempt to recommend the limit be removed, so no cap
Review 2016. repair a defect in a motor vehicle and the applies. Non-government committee members
number of days the vehicle can be ‘off the recommend the limit be increased to $40,000.
Recommendation 2: road’, before a buyer must be offered a
The committee recommends the government refund or replacement Recommendation 8:
bring the committee’s report, particularly • clarity as to when a supplier/ The committee recommends the State and
the committee’s recommendations, to the manufacturer must repair, refund or Commonwealth Governments implement
attention of Consumer Affairs Australia and replace a motor vehicle business and consumer awareness programs,
New Zealand (CAANZ) and the government with the intention of educating industry and
bodies, State and Territory regulators and • an adequate definition of what constitutes consumers on the intent of the Australian
other entities comprising CAANZ, such a ‘lemon’ motor vehicle, such as – Consumer Law, including the consumer
guarantees.
Recommendation 9:
The committee recommends the Government
review cooling-off periods for new motor
vehicle purchases, with consideration as to
whether such periods should be unable to
be waived by the purchaser and whether
disadvantaged persons should receive the
benefit of a longer period.
1
JAG, Analysis of OFT data, Material prepared for
the Legal Affairs and Community Safety Committee,
September 2015, p4
automotivedealer.com.au | MARCH 2016 | 15POLICY Australian Automotive Dealer Association
AADA ADVOCATES IN WA MOTOR
VEHICLE ACTS REVIEW
A
ADA has highlighted shortcomings AADA’s submission advocated for similar
in Western Australian legislation provisions contained in the Motor Vehicles
that leaves Dealers vulnerable to Dealers and Repairers Act 2013 (NSW), that
unfair contract dealings by motor vehicle prohibits unfair contracts and unjust conduct
manufacturers. in New South Wales between Dealers and
motor vehicle manufacturers.
Following the initial review in August 2013,
the WA Government has commenced the AADA asked the Government of Western
Stage Two review of the Motor Vehicle Dealers Australia to consider and support amendments
Act 1973 (MVDA Act) and Motor Vehicle to regulate the Dealer and distributor business to incorporate into the MVDA Act legislation
Repairers Act 2003 (MVRA Act). relationship in circumstances where there that provides similar provisions to those
are examples of unfair contracts and unjust recently enacted in the Motor Vehicles Dealers
The Government commissioned the conduct on WA Dealers, and where there is and Repairers Act 2013 (NSW) which prohibit
Department of Commerce (Consumer an absence of adequate regulatory measures in unfair contracts and unjust conduct. Without
Protection Division) to conduct the review the Franchising Code of Conduct or in the new making these provisions, the 150 WA new
and issued a Regulatory Impact Statement for unfair contracts legislation recently enacted at motor vehicle Dealers would continue to face
consultation. The policy objective is to develop the Federal level. a significant power imbalance in contract and
options for reform that seek to balance the franchisee negotiations with their respective
competing interests of motor vehicle Dealers, AADA argued the adoption of similar
manufacturers.
motor vehicle repairers and consumers, provisions into the MVDA Act would address
and which provide adequate protections for the imbalance of power between Dealers and The final stage of the MVDA will include
consumers while ensuring that motor industry manufacturers and lead to improved and fairer the release of a Decision Regulatory Impact
business relationships. Statement addressing the outcome of
representatives are not overburdened with
unnecessary regulation and red tape. consultation with stakeholders and making
In addition to the submission, AADA CEO,
recommendations for reform. The Decision
Bruce McDonald, wrote to the WA Attorney
AADA lodged a submission to the review Regulatory Impact Statement will analyse
General and Minister for Commerce, the Hon
panel on 18 December 2015, drawing attention the impacts of the various options and
Michael Mischin MLC, and Small Business
to a major shortcoming in the Acts concerning recommend preferred options for reform.
Commissioner, David Fraser, to draw their
the relationship between car Dealers in WA
attention to an opportunity to address the AADA will maintain its presence throughout
and motor vehicle manufacturers in respect
imbalance of power issues. He asked them to this process and continue to advocate on
of the protection for Dealers against unfair give serious consideration to the opportunity
contract dealings by manufacturers. behalf of WA’s new car Dealers.
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16 | MARCH 2016 | automotivedealer.com.auYou can also read
