Parallel imports: Minister says choice the driver

The Federal Government minister who this morning cleared the way for parallel imports of new cars says consumer choice is the main driver behind the decision. But he concedes the scheme comes with some risk.

Paul Fletcher, Minister for Territories, Local Government and Major Projects, this morning announced changes to the Motor Vehicle Standards Act following an “extensive period of consultation”.

If passed into law, the changes will allow individuals to import new cars free of the requirement to have them meet Australian Design Rules (ADR).

In the overview of Motor Vehicle Standards Act Reform published today, the conditions under which the vehicles may be imported are detailed.

It states individuals will be limited to importing right-hand drive vehicles that have travelled 500km or less and are less than 12 months old at the time of application.

The vehicles must also come from countries “with comparable standards to those applied to new vehicles in Australia”. The document states “this would currently initially restrict imports to cars from the UK and Japan, however, motorcycles could also be imported from USA and the EU”.

Personally imported new vehicles will be required to undergo inspection by “an independent third party inspection service” with some differences in standards (eg: child restraint anchorages) being addressed through “modification requirements”.

Minister Fletcher told motoring.com.au the key driver was delivering consumers wider choice.

“Principally, we believe this will be a bigger driver than price,” he said.

Fletcher said that the decision was not a backflip but the result of ongoing deliberation. He denied the government had ruled out parallel imports of new cars last November.

Further, he refuted the Federal Chamber of Automotive Industries’ (FCAI) claim that the government had ignored industry submissions.

“We made a decision about [not allowing the parallel importation of] used cars in April [2015] and since then have continued the review begun by my predecessor, Jamie Briggs,” he stated.

“It’s not a question of ignoring [FCAI submissions] at all. We’ve gone through a very thorough consultation process since 2014. There are some aspects [of the decision] they don’t approve of.

“We’ve announced a framework this week and we anticipate we will work with them [the FCAI] and others as the measures move forward,” Minister Fletcher stated.

Fletcher conceded there was risk to consumers who went outside the normal new car channels.

The MVSA Reform document states: “Information for individuals seeking to purchase a vehicle overseas, and subsequent buyers in the Australian used vehicle market, will be made available through the Department’s website, including a recommendation that buyers purchase insurance and/or warranty coverage for repairs and possible safety recalls”.

“This decision delivers choice. But if consumers go down this route there will be some responsibility you [sic] have to accept – typically warranty, recalls and the like,” he stated.

Fletcher said discussions with the insurance sector indicated companies would come forward to offer alternatives to factory warranties. He was less sure of the processes related to recalls.

“On things like recall we will have a website maintained by government. It will notify purchasers in respect of the vehicle affected by a recall in their ‘home’ market.

“The government will inform owners. [But] We may contract it out -- we are working through it,” he stated.

“It will be a different path. I’m not saying the process will be easy,” Fletcher stated.

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>> Parallel importer hails government reversal

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