Cheap car imports fraught with danger

THE importation of cheap second-hand cars by the shipload would be a disaster — the equivalent to importing myna birds, cane toads and other pests.

Disaster looms ... opening the floodgates to cheap car imports would be the equivalent to

AS if the collapse of the entire Australian car manufacturing industry isn’t enough to deal with, now the Productivity Commission wants to import cheap and potentially shonky second-hand cars by the shipload.

This would be a disaster, the equivalent to importing myna birds, cane toads and other pests.

Used cars from Japan won’t be any cheaper than the second-hand vehicles that were designed and engineered for our conditions.

Presumably the Productivity Commission made this suggestion so it could threaten car companies lest they move to raise prices once Australian manufacturing ceases.

But the Productivity Commission hasn’t read its own report.

Australian new-car prices are at 20-year lows. Ours is the world’s most competitive new-car market with more than 65 brands on sale — 30 per cent more than North America and Europe. That competition combined with the slashing of import tariffs begun by the Keating Government is why the Australian car making is finished.

Cheap new cars, in turn, drive down used car prices because people would rather treat themselves to the new-car smell than buy someone else’s old banger.

So that’s the first myth busted. The other issues are more serious.

“Grey import” is the term given to cars that are not sold as new in Australia even though they wear familiar badges from Toyota, Nissan, Honda, Mazda and others.

They’re the sort of thing you can pick up from specialist import dealers on Parramatta Rd — high-performance coupes and funky little vans.

No-one knows why they are called “grey” imports. Perhaps it’s because they fall into a grey area when it comes to getting them fixed. They might wear the badge of a major brand, but if they’re not imported by that brand, they’re not obliged to stock parts.

Under the grey import rules we bring in specialist models in relatively small numbers. But any move to open the floodgates to de-restrict grey imports could leave buyers open to fraudulently-certified, unsafe and potentially stolen vehicles that will be expensive to insure.

News Corp Australia Cost of Living Editor John Rolfe has already exposed some of the rorts used by a number of grey import dealers.

It’s next to impossible to track the vehicle’s history. You don’t know how far it’s really been driven, if it’s been pieced together from two or more cars after a major crash, or indeed if it’s been stolen and given a new fake identity.

So rife is this rorting a very well known dealer of such vehicles tells me: “We don’t wind back (mileage) on cars any more than the other guys do”.

The grey importers are good at supplying what appear to be legitimate documents.

If there’s nothing to hide why did some of the bigger grey importers come down heavy — and by heavy, I mean violence was allegedly threatened — recently on an enterprising local who found a way to source a more accurate history check on the cars coming from Japan?

Grey imports are cheap also because Japan taxes cars at a higher rate once they reach three years old. Second-hand cars are cheap and dealers from other countries snap them up. This stimulates new car production.

So not only would Australia be taking care of Japan’s scrap, we would be, by default, propping up Japan’s car industry even further.

New Zealand derestricted grey import cars when its car manufacturing industry shut in the 1990s. The then-government needed to provide newer and more affordable second-hand cars as NZ’s average vehicle age was among the world’s oldest.

Grey imports were a step forward for the Kiwi public. Now, however, grey imports are so rife that the average age of cars in New Zealand is increasing again.

In Australia, we’ve worked hard to achieve the highest levels of vehicle safety and last year had the lowest road toll in 89.

That an Australian government would expose buyers to fraud, dodgy repairs and infect the market with less safe vehicles is beyond comprehension.

This reporter is on Twitter: @JoshuaDowling