BMW and JLR slam parallel imports

BMW and Jaguar Land Rover are the latest luxury car brands to attack the federal government's proposal to open the floodgates to parallel vehicle importing from 2018.

BMW Group Australia managing director Marc-Heinrich Werner described the proposed change to the Motor Vehicle Standards Act, which would allow individuals to import new or near-new vehicles from the UK and Japan even if they are sold here, as surprising and disappointing.

"We have been discussing this subject, in depth, with various state and federal ministers and departments for over 12 months now, and have been very active in our conversations," he told motoring.com.au.

"The fact that this issue was reopened is disappointing, and the fact that it was reopened without consultation is even more disappointing."

Werner said the MVSA amendment had many hurdles to jump before it was passed into law.

"Our understanding is that the MVSA review is expected to adhere to a protracted process including further public consultation, the development and release of a Regulatory Impact Statement and approval by various levels of the government."

He echoed statements by industry representatives who say that while a relatively small number of luxury car buyers could benefit from lower prices or by 'jumping the queue', private imports of unsuitable vehicles could make our roads less safe.

"We understand there is some dissent within the government on this matter, particular in the area of consumer safety. An unrestricted market means danger and risk for the consumer — safety, warranty, service, recalls and the like.

"For example, vehicles bought overseas do not necessarily comply with Australian standards, product features like Connected Drive, navigation, emergency calls and others may not work here and these vehicles may not be covered by BMW Group's warranty.

"In addition, vehicles brought in under this scheme will not be registered with manufacturers and may therefore miss out on critical software updates and/or recall or service campaigns, meaning a risk, not just for the consumer who purchased the vehicle, but for all other road users."

JLR Australia issued a statement this morning saying the proposed changes would make Australian car buyers worse off, not better.

“We share the extreme disappointment which has been expressed by the FCAI (Federal Chamber of Automotive Industries) and a number of other manufacturers in the wake of this announcement," said JLRA managing director Matthew Wiesner.

“The government is misguided if it believes that these changes will be a positive thing for the Australian new vehicle buyer. We are very concerned that the reality of the situation is that the consumer will in fact be exposed to considerable risk and be far worse off compared with the current system.”

Like BMW and Porsche, JLR says consumers importing vehicles from overseas under the changed legislation will be exposed to risk.

“Aside from the fact that the privately imported vehicle may have a warranty and possibly other features such as a service plan which have been issued in another country and therefore are not recognised here in Australia, the owner will not enjoy the benefits which come from the substantial investments made in local dealerships and support networks by brands which sell new cars in this country.

“These investments mean that the local buyer of an Australian-delivered new car can rest assured that their vehicle will be serviced and repaired appropriately because we have trained and equipped our dealers for that particular model and specification.

"Very importantly, our dealer network also tracks and carries out any necessary recalls for vehicles delivered new in this country, so the owner is made fully aware of when important work is required – which is obviously critically important when it comes to vehicle safety.”

JLR said that a privately imported vehicle will not have the protections afforded by Australian Consumer Law.

"A new car purchased and delivered here is automatically covered by Australia’s comprehensive consumer laws,” said Wiesner.

“This means that a locally delivered new car owner has recourse in situations such as when his or her vehicle proves not to be fit for that person’s needs. Unfortunately the owner of a privately imported car will not be eligible for any of this peace-of-mind security.”

Like other luxury car makers, JLR says vehicles purchased directly from the UK or Japan may be incompatible with Australian conditions.

“Factories building cars for Australia incorporate many important features which recognise that this country is different. Cooling systems for engines and transmissions are designed to work efficiently in our extreme temperatures, as are air-conditioning systems.

"Navigation and infotainment systems are set up for this country from the outset, and engineering takes into account a range of factors as diverse as our towing regulations and the composition of our fuels from the earliest stages of developing a vehicle for export to Australia.”

Wiesner said consumers who choose to import vehicles personally on the basis that they are making financial savings may be in for a shock.

“Australia is a highly competitive market and we firmly believe that new vehicle prices here represent excellent value for the consumer, especially when you take into account the considerable security the consumer enjoys by way of trained dealer networks, service and parts back-up, extensive warranties and roadside assistance…the list goes on.

“But the private importer of a car misses out on these things, and also potentially loses out at trade-in time because the car specified for an overseas country will always be worth substantially less than the car designed from the outset to be delivered and driven locally here in Australia.”

The local chief of Jaguar and Land Rover also fired a shot at the federal government's long-criticised luxury car tax, the removal of which he said would guarantee lower prices for new premium models.

"It is actually the government who is making a significant margin per unit sold in Australia and therefore grossly over taxing the best technologies and innovations available for consumers in the industry," he said.

"Fixing the inequitable tax arrangements of a combined LCT and GST that adds 43 per cent of cost to vehicles over $63,184 would be a better way of addressing car affordability for the Australia consumer.”

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