The Motor Vehicle Standards Act 1989 (MVSA) is currently under review, with the Government recently closing public submissions. Moore Stephens Automotive attended and participated in the public consultation workshop held in Melbourne, which outlined the process of the review and gave stakeholders an opportunity to provide relevant input.

Moore Stephens Automotive welcomes the Government review of the MVSA, given it was last fully reviewed in 1999 with a major amendment in 2001. Stakeholder feedback also supported the review given the change in the global motor vehicle industry, technology, consumer environments and the end of domestic passenger vehicle production by 2017 in Australia. Furthermore, the Governments deregulation agenda and the Productivity Commission's recommendations on reducing barriers to second hand imports have provided significant discussion within the automotive industry and community.

Given the significant impact reducing barriers to import vehicles poses to both automotive businesses and consumers at large, we explore this further.

Reducing barriers to the personal importation of new and second hand vehicles is being considered due to the following reasons:

  • Public submissions in 2013 commented on the differences in vehicle pricing between Australia and other overseas markets;
  • Community perceptions that Australia has higher prices – the Government wants to ensure that Australians can access safe vehicles at the lowest possible cost;
  • The Productivity Commission recommended reducing restrictions on the importation of quality second hand vehicles; and
  • Individuals have consistently raised concerns about their inability to purchase directly from overseas (including from authorised suppliers.

On the surface, the reduction of importation barriers sounds like a great idea to provide affordable vehicles to consumers. However after conducting a thorough analysis and considering consumer safety first and foremost, Moore Stephens Automotive concur with the view of the Federal Chamber of Automotive Industries (FCAI), being in opposition to the proposed reduction in barriers to import vehicles.

Whilst not exhaustive, the reduction of importation barriers has significant consumer implications, and consideration needs to be given to the following:

  • Fleet age and safety, emissions and anti-theft standards;
  • The risks in relation to consumer protection such as vehicle warranties, after sale parts and service, and recall mechanisms;
  • The risks of importing vehicles that have been subject to structural damage, inadequate repair, theft or odometer tampering; and
  • Transitional requirements to control impact on existing automotive sector businesses.

A simple example highlights the complexity surrounding the practicalities of reducing the barriers to imports. Under Australian law, an official importer is required to carry the parts for any vehicle it sells, and must be able to service the vehicle as well. Given importation of vehicles may be undertaken by individuals, all the risks are borne by the consumer with no responsibility of current franchisors. Sourcing parts and servicing vehicles could therefore be difficult, with the onus squarely on the consumer. The relatively recent reduced import barriers in New Zealand provide many examples of consumers being unable to source spare parts for vehicles, or have had vehicles repossessed, as they have been subsequently identified as stolen vehicles.

Moore Stephens Automotive support the MVSA review, however key aspects need to be considered carefully to ensure the protection and safety of consumers.

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