It was extremely disappointing to hear the news that the Federal Government would no longer be moving forward with proposed legislation to allow private imports of new vehicles.
The public was led to believe this was a done deal with consumers at the heart of the changes. However, recently the Minister for Urban Infrastructure, Paul Fletcher, announced the government was abandoning the parallel import scheme. Really, we shouldn’t be surprised, modern politicians and political parties struggle to stick to anything they say.
Parallel imports would have been allowed from the UK and Japan, provided the car was no more than twelve months old, with under 500km on the odometer.
The car manufacturers have got their way. Now, all brands shouldn’t be tarred with the same brush. Throughout this process, some brands didn’t utter a word. Toyota, the biggest seller of new cars in Australia just went about its business and didn’t publically enter the debate. The majority of public sooking came from the premium end of the market, particularly, Mercedes-Benz. There was also the efforts of Federal Chamber of Automotive Industries (FCAI), the car manufacturer’s lobby group.
Mercedes-Benz was able to put its considerable local resources into lobbying efforts to keep the status quo. As things heated up, I couldn’t help but notice some of the contradictions that had made their way into the debate.
The German giant was very keen to maintain business as usual. I have no problem with business arguing their case, but why not be completely honest. This is an issue of profit, not safety.
Do we seriously think new cars from the UK and Japan are not as safe as those sold in Australia?
Another argument that was completely laughable was the claim no warranty coverage could be provided and recalls would be too hard to manage. Porsche states on its UK website, the ‘Porsche New Car Guarantee is valid all around the world’ as it should be. Is Mercedes not capable of communicating service information to its Australian arm if a repair is required?
How many times have we heard ‘dealers are independent business’ blah blah blah, so where would customers stand who were willing to pay for repairs? If dealership service departments are doing so well they are in a position to turn away paying customers, well done to them!
Throughout the period of lobbying, Mercedes-Benz conceded parallel imports would only affect a small section of the market that features cars costing over $100,000. My initial thought was if these changes are only relevant to a very small segment of the new car market, what’s the big deal?
The big deal is this area of the new car market is very profitable. Brands like Mercedes-Benz would need to forgo some profit in order to remain competitive. I was under the impression this is how our capitalist economy was supposed to work. Competition makes consumers the winner.
A good example of why Mercedes was against the changes is its flagship sports car, the AMG GT. It’s currently listed in the UK for £98,760 on the road. At current exchange rates, this comes out at $161,284 Aussie dollars. On the local website, the AMG GT is listed at $277,521 drive away (registered in Victoria). In anyone's language that’s a significant amount of money. That leaves 116k in the kitty for shipping and taxes on this end. In defence of the Australian pricing strategy, signing up to buy an AMG GT in Australia will mean $45,661 of the total is luxury car tax.
It’s one of those situations where the more you spend the more you will save. Having the ability to import Ferarri models has massive price advantages over buying locally. The savings would easily justify the extra steps needed to make the purchase in another country.
There was also the argument that customer safety would be at significant risk because recalls would be too difficult to manage. If a company the size of Mercedes-Benz is unable to manage a database of VINs and customer names, then by golly we are in trouble.
It does sound like I’m picking on the premium end of the market. The former head of Mazda Australia was happy to be in the thick of it. Absurd claims that Mazda’s Australian models are completely bespoke for our conditions was complete nonsense. If these claims were true, all Mazda’s would have rear air vents, it has a tendency to get warm down here in summer.
Another point raised by the powers that be was the jobs that could potentially be lost if the laws changed. This is probably a reasonable assumption, however, it opens up the possibility of new business to assist buyers to find and import their car. Changing the rules opens up opportunities for new businesses to enter the market.
In my experience, anything that big business argues against is most likely going to result in a win for the customers. In this case, prices for models that are just out of reach for many enthusiasts would become more affordable.
The Federal Chamber of Automotive Industries (FCAI) welcomed the move to scrap changes to parallel import laws, chief executive Tony Weber described it as “a win for consumers.”
For some unknown reason, the federal government will now introduce a scheme that only the super wealthy will be able to take advantage of. Those who can afford a new limited-run hypercar will be able to bring it to Australia and possibly drive it on public roads, depending on state laws.
Essentially all of the arguments against allowing parallel import of new cars can be dealt with rather easily. All brands could ensure Australian customers are buying at prices that are globally competitive, this would remove the incentive to chase deals overseas. Just like managing a database, it’s not rocket science.
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