Government doesn't understand automotive — Nissan

Nissan Australia CEO Richard Emery is concerned "political expediency" will prevent the federal government from making an informed decision regarding proposed changes to the Motor Vehicle Standards Act.

The Act is the target of a review announced early this year and the subject of an Options Discussion Paper released last week by Assistant Minister for Infrastructure and Regional Development, Jamie Briggs.

The Options Discussion Paper follows the recent Productivity Commission recommendations to scrap or modify the MVSA to open up the local marketplace to more imports.

"I'm concerned political expediency will not allow government to really understand the issues such changes could create," Emery told motoring.com.au.

"The government, politicians and public servants do not understand the car business. It takes them three to four years to start to understand the multi-faceted nature and then they're moved on.

"Right now there's a deep lack of knowledge. [It seems] Much of the [current] discussion is based on misinterpretation.

"If industry at all levels has a chance [to inform government] and the bureaucrats take the time to fully understand the issues then perhaps sanity will prevail. It needs to be a proper conversation though," Emery told motoring.com.au.

Industry and interested parties will have the opportunity to provide submissions to the review before October 4. Pending the result of the review, regulations which effectively limit the import of new cars to manufacturers or those holding full-volume compliance approval (via ADRs) could eventually be significantly downgraded or completely scrapped allowing multi-channel (or parallel) importation.

Rather than provide access to cheaper new cars, the Federal Chamber of Automotive Industry (FCAI) contends such changes will significantly damage the local auto industry at all levels and impact negatively on consumers.

"I share Richard's concerns," FCAI Chief Executive Tony Weber told motoring.com.au.

Referring to comments by the assistant minster on Melbourne radio that he wasn't supportive of unfettered used car imports, however, Weber added: "We've been through an education process... and some of the messages are getting through."

Nonetheless the FCAI boss describes the ability to fully inform the review will be "a difficult task".

"The potential [for the bureaucrats] to make the wrong decision is enormous."

He says ideologically opening up the Australian automotive marketplace to unfettered imports is "superficially attractive" but warns that such a move would be contrary to a basis tenet of government to protect consumers.

Weber also suggested he believed some quarters had dismissed the comparative pricing survey the FCAI conducted in August <<<<< news/ford/focus/fcai-responds-to-aussie-tax-criticism-45120 >>>>>>> in conjunction with IHS Automotive.

Weber says the review and Productivity Commissions findings have already postponed investment in the local industry including the retail space. One brand alone has discussed with the FCAI chief suspension of investment of the order of $1 billion.

"That's not going to come here if the decision goes one way," Weber stated.

"And then there's the investments made by the 1.1 million Australians who bought new cars last year," he added.

Already vocal on the subject of parallel imports, Mercedes-Benz Australia spokesperson David McCarthy again weighed in.

"There is a real and present risk that investment, skills training and employment levels will be adversely impacted not just by the uncertainty that now exists but by the possibility of decisions made to change the nature of a market that is operating effectively, efficiently and for the benefit of the Australian consumer," McCarthy told motoring.com.au.

"There is no market failure. We have demonstrated that under $100,000 there is little if any advantage to the consumer in parallel imports. In fact our A-Class, C-Class and M-Class are priced almost the same as the UK, which is a comparable RHD market.

"The market for vehicles over $100,000 is by any measure no more than one to 1.5 per cent [of total volume]. While it can be argued there may be some [price reduction] opportunity there, it is such a small segment of the market one has to ask why disrupt investment, employment, skills training and business confidence to try and make the most expensive cars cheaper.

"The mass market consumer will not benefit from an opening up of the market to imports and to suggest so is not backed up by facts," he said.

"It's obvious really to everyone, if the government is really concerned about reducing the cost of cars they could do it right now with a stroke of the pen and scrap the LCT," McCarthy stated.