Productivity Commission looks into Used Car Importation into Australia
Productivity Commission looks into Used Car Importation into Australia
Australia's Productivity Commisssion has been asked by the Government to review the current Used Car Importation Laws, with a view to composing a report on the subject.
Since 1989 Australia has had stringent laws in place that control the importation of used cars into the country. Prior to 1989, an Importer was allowed to bring virtually any make and model of car into Australia, in line with the practice throughout most of the other countries of the world. This meant that each and every make and model of vehicle that was available in Japan was able to be brought into this country, which was a task undertaken by a handful of select Importers in Western Australia and Queensland. During the late 1980's, Australia had an extremely limited range of vehicles available to consumers, most of them being built inside the country by either Holden or Ford. This meant that most of the cars driven by the Australian public were of either 6 or 8 cylinder configuration, mostly with plastic seats, and were without air conditioning. power steering, sunroofs, electric windows or mirrors, or indeed any other luxuries.
At exactly the same moment in time, the Japanese public were driving cars that were mainly propelled by high output 4 cylinder engines that were vastly more fuel efficient, and were placed in vehicles that all had air conditioning, power steering, power mirrors, electric windows, vanity lights and mirrors, fully carpeted interiors as well as many other luxuries as standard.
Commencing in 1987, a few enterprising Motor Dealers in Perth and Brisbane began to bring a couple of cars into Australia, in order to see how the public reacted to them. By 1988 they were overrun with orders, with clients refusing to leave some used car Dealerships until a sizeable holding deposit had been placed on a car that was currently still in Japan at that stage, the picture of which had to be removed from the dealer's wall to stop anyone else getting it. The rush for Australian's to finally catch up with what had been happening in the rest of the world was on, and this made Perth and Brisbane the 2 centres of an imported car boom. The cars that came into Australia through these means were wonderful, with very low kilometres, full feature lists, and lots of power, as we were finally receiving the " Specials " that only the Japanese had been driving up until this time.
Coincidentally, cars that were purchased in Japan at this time were also worth very, very little, due to a Japanese law that had been designed to keep the Japanese driving public in near new cars. The law meant that as soon as a vehicle became three years old, the insurance premium shot up to an amount that was almost equal to the cost of a new car, and so most Japanese people traded their car in for a new one every three years. This meant that the traded cars were quite often scrapped as they had no inherent value, being too expensive to re-insure. Some of the cars were therefore recycled into new cars, whilst the remainder went into large holding paddocks of 1500-2000 cars. It was from there that a handful of Australian buyers took their stock to Import into Australia, as some cars were sold for as little as $100 for a 3 year old Mazda RX-7 at that time.
The resultant effect upon the Australian consumer was rapid and rewarding, as it allowed our drivers to drive great cars for a fraction of a new car price, despite most examples being just 3 years old. Sadly though, it was not long before the major Importers of new vehicles into Australia grouped together and Lobbied the Government for changes to the Importation Rules with regard to cars. They managed to persuade the Government to pass the Legilation in just 3 days, and this prohibited any further Importation of used cars into Australia. We were therefore instantly back to Holden's and Ford's, with a sprinkling of Honda's, Mitsubishi's and Toyota's at the hitherto unchanged new car prices.
Several years later the Used Car Importer's Association was formed, and a deal was struck with the Government whereby a very small range of Specialist Vehicle's could be imported for resale, providing that a New Car Importer was not selling that model in Australia already. This became the Specialist and Enthusiasts Vehicle Scheme ( SEVS ), and a list was drawn up of a few vehicles that were eligible. In order to give the scheme credibility, there was also another scheme established to make the neccessary modifications to meet Australian Design Rules ( ADR's ), and this was named the Registered Automotive Workshop Scheme ( RAWS Scheme ). This scheme meant that only authorised RAWS businesses could comply Imported Cars to suit the Australian Rules, and the constant monitoring of the aformentioned workshops means that this is a very carefully regulated scheme.
Finally in 2014, now that Ford, Holden and Toyota are all ceasing motor car manufacturing here in Australia, the Productivity Commission is looking into opening up Australia's Vehicle Importation Laws to align with rest of the world, in order that we can finally have a pricing strategy that is not one of the highest in the world. This strategy has been enjoyed by a few motor car manufacturers or High-Volume importers, and has meant that the Australian consumer has paid up to 45% more for a new car here than overseas, and has then watched it devalue very rapidly indeed.
This situation is now being looked into, with a report to follow. The Productivity Commission is talking to folk from New Zealand, where a similar situation unfolded when that country also ceased motor car manufacturing some time ago. The result was vastly increased consumer choice, much, much lower car prices and a whole new industry that employs tens of thousands of people. When these changes are implemented in Australia, we too will have a much greater range of cars to choose from at much reduced prices, which will also allow many more consumers to be able to afford a great car in the same way as their counterparts do overseas.