Hyundai Oz rejects parallel imports

Its chances of becoming reality now appear remote, but the federal government's proposed relaxation of parallel import laws remains front of mind for the majority of mainstream vehicle importers, including Hyundai Motor Company Australia (HMCA).

Speaking to journalists at the launch of the Hyundai Tucson and Santa Fe 30 Special Edition this week, HMCA COO Scott Grant said the Australian car industry would face a New Zealand-style decline if the government's proposed changes to the Motor Vehicle Standards Act were adopted.

Grant said that Australian consumers already have a lot of choice, with 60 brands and more than 400 models now on offer in the new-car market, and warned that parallel importation would not necessarily broaden the number of models available, but could create local suitability as well as safety, warranty, servicing and repair issues.

“There’s [already] plenty of choice out there and I think you have got to be mindful of the implications of changing the structure and the nature of how vehicles come to the country and are distributed, sold and ultimately supported,” Grant warned.

Under the proposed legislation, Australians will be allowed to bypass licensed car dealers and directly import new and near-new cars directly from Japan and the UK (right-hand drive markets) from 2018. Individuals will be limited to importing RHD vehicles that have travelled 500km or less and are less than 12 months old at the time of application.

These vehicles do not have to meet Australian Design Rule and Motor Vehicle Standards Act regulatory controls.

Grant said that being able to correctly identify and support vehicles affected by safety recall notices was a prime example of how vehicle owners’ safety could be jeopardised under a relaxed import system.

“A car might have been subject to a recall notice in another jurisdiction, and because we don’t recognise the VIN, we wouldn’t necessarily be able to proactively take any action to repair the car. Those kinds of issues are somewhat lost in that argument about ‘let’s have an open market place’,” Grant said.

“If OEMs [Original Equipment Manufacturers] go away, that changes many aspects. We could easily become a fully used and import market like New Zealand, and it particularly concerns me, from an industry standpoint, as to what the industry will look like in the future,” he added.

Hyundai is not the first OEM importer to condemn parallel import legislation, which took the industry by surprise in February.

BMW, Jaguar and Land Rover have voiced their concerns on the matter, as has Porsche, criticising the government’s lack of consultation and supporting Grant’s argument that the scheme could make our roads less safe and customer complaints harder to handle.

“Many car companies have invested heavily now in advanced mechanisms of handling customer related issues very quickly and very comprehensively,” said Grant. “The current enquiry that’s occurring in the industry is going to change many car companies’ policies in lots of different areas. I think it’ll be a really tough period of time, and I don’t think the consumer will be better off.”

Like Mercedes-Benz, Porsche says that abolishing luxury car tax would be a preferable option for making prestige cars more affordable without introducing risks associated with private imports.

“It wouldn’t bother us [if LCT was abolished],” said Grant. “I think it should go, because I don’t think tax has helped.”

Hyundai’s condemnation of parallel imports and its calls to lift the federal government's LCT come as the Korean car-maker prepares to launch its first stand-alone luxury brand  – Genesis – in Australia next year.

To date, Ferrari and Peugeot-Citroen importer Sime Darby are the only local OEM importers to come out in favour of relaxed parallel import legislation.

One industry insider told motoring.com.au this week that Kevin Rudd was more likely to be reinstated as prime minister than the Turnbull government was of changing parallel import legislation.

With no control of the Senate, in which it needs the support of nine of 11 cross-benchers, bigger issues like same-sex marriage and superannuation to deal with, and parallel import proponents Jamie Briggs and Joe Hockey now gone, the government faces an uphill battle to pass its proposed legislation.