Iron Chef Imports

An Open Letter to Josh Dowling

Published: 5/03/2014

 

http://www.news.com.au/finance/business/imported-used-cars-a-threat-to-australian-market/news-story/a4681f03d66430aeb20df14d7377e21f

 

**OPEN LETTER TO JOSH DOWLING**

Dear Josh,

I read your article this morning, “Imported used cars a threat to Australian market”, as published in various forms by News Ltd mastheads across the nation, with equal parts amusement and incredulity.

I appreciate that, as a motoring editor for new vehicles, your job relies on a steady flow of press vehicles from the car manufacturers you’ve so breathlessly supported in your article. Of course, the car manufacturers themselves have a market to protect, so their vested interest has become yours. Likewise, it is logical that I, as a writer and used imported vehicle business owner with a vested interest its long-term viability, am now calling bullshit on most of your claims.

Let’s start at the top shall we?

First, the assertion by Tony Weber, the head of the FCAI (you know, the body that represents all the Australian car manufacturers…wait…) that imported vehicles will represent a Fringe Benefits Tax disaster. Cue the clanging of silver cutlery and crystal glasses on oak tables across the nation. Of course, our friend conveniently side-steps the reality that, should a prospective buyer lease a cheaper, used imported vehicle in the first place, such concerns about more severe depreciation would be completely unfounded, or that any rise in depreciation is tax deductible in either case.

Likewise the “salary packaging and leasing industry” (your term, Josh) seems to have suddenly developed a social conscience and is concerned that the federal government may lose potential FBT revenue. Here I was, thinking they would be more concerned about the systematic dismantling of their cosy, kick-back laden arrangements they have in place with the manufacturers.

You are indeed correct that the increased safety levels (both passive and active) of new vehicles has been arguably the single greatest contributor to a reduction in the road toll in Australia. Of course, if you ask any state government, they will argue that said reduction could be solely attributed to increased speed camera numbers, but I digress. What you’ve failed to mention is that his trend is being reflected in almost every developed country across the globe, including the countries from which Australia would most likely import used cars. The United Kingdom, for example has one of the lowest death rates (per 100,000 inhabitants) of any country in the world at just 3.2, while Japan, despite having its motorists all crammed into a far smaller space than our own, still manages to equal Australia’s result of 5.2. Evidently the federal government agreed with me many years ago, as it has already spent a good part of the last decade aligning our unique Australian Design Rules with those of the European Union.

Concerns about the unknown history of the cars? If you (or Mr Weber, for that matter) had an understanding of the Registered Automotive Workshop Scheme, you’d already know that vehicles imported through this process undergo a range of checks, and are rejected if there are signs of serious structural repair or chassis corrosion. There’s no reason to think this can’t also be applied to used imported vehicles in the future. The checks are certainly more thorough than roadworthy inspections completed on vehicles already available for sale in Australia.

As for the winding back of odometer, yes that old chestnut. Again, neither you nor Mr Weber seem to realise that all vehicles exported from Japan, since 2007, have supplied with an original export certificate indicating odometer readings every time the vehicle has re-registered in Japan, printed on tamper-proof paper. For a small fee, prospective buyers can purchase another original document from Japan with relative ease. So the problem isn’t whether the odometer readings can be traced; the problem is how rigorously they are monitored by respective government departments. As it currently stands, they’re not monitored at all, allowing unscrupulous dealers to run rife. When evidence of odometer tampering is found, federal and state departments handball it to each other more than your average AFL match. Thus the importers trying to supply good quality vehicles are left throwing their hands in the air. Yes, it’s a problem, but one that is easily solved.

Another assertion by Mr Weber that you’ve seen fit to publish verbatim is that radioactive cars and parts taken from near the Fukushima disaster in Japan and being sold to Russia is somehow connected to the supply of used vehicles to Australia. I don’t know whether to laugh or cry. Ever since the disaster, Japan has had some of the tightest restrictions world-wide for testing vehicles for radioactivity before they are exported (both new and used, given that many new vehicles are also shipped from nearby…interesting that no-one bothered to mention it). Without clearance, the vehicles can’t be exported.

Then we move down to a response from the AAA, the one body without a vested interest, who, oddly enough, is in favour of opening the market to used imported vehicles. Is the pre-requisite for being considered ‘controversial’ a stance that disagrees with your own, Josh?

The argument that owners of used imported vehicles face the prospect of lack of parts availability and increased costs of servicing? More barking at shadows. Current imported used vehicle owners already enjoy a range of options when it comes to servicing, courtesy of a range of small-to-medium business owners seeing a niche market and filling it. Try purchasing a new front left quarter panel for an Australian-delivered Renault Scenic and see a) how much it costs and b) how long it takes to bring one in from overseas.
More laughter ensued in my office when you chose to list the Nissan S-Cargo among the list of most popular imports. You know, the car that no workshop has imported to Australia since 2005.

But to cap off my response, let’s rewrite your Q-and-A at the bottom of your article, for greater accuracy.

Why is the car industry upset?

They’ve enjoyed some of the fattest margins on their vehicles anywhere in the world, and they’re not keen to give them up. It’s the reason why Australia able to sustain so many different niche brands in this country and have them all make money.

But won’t prices go down if we let more cars in?

(Hang on, weren’t you saying before that depreciation will be worse if we import more cars? Now you’re saying it’s already worse because so many new cars have been sold!)

Yes. It’s basic supply-and-demand economics. If the cars being imported are more expensive than used cars already here, they will stop being imported, plain and simple.

Aren’t most cars the same underneath anyway?

Yes, in fact cars imported from the UK are, aside from having an odometer that reads both km/h and mph, effectively identical to Australian-spec cars now that ISOFIX is accepted here. Where there are differences, modifications will be made to the vehicles before they are registered in Australia, just as they are now.

So why is the government considering this?

Because they, like the Productivity Commission and the AAA, aren’t stupid. They know that there’s no reason why, even when taking into account differences in tariffs, a Porsche 911 Turbo S should cost $210,000 in the UK and $441,000 here. The subconscious collusion currently occurring amongst those in the car industry represents a far greater theft from the general public than used imported vehicles ever will.

Josh, given that you write for News Ltd, I appreciate that the bar you’ve set for your readers doesn’t need to be very high, but I would hope that, in future, as national motoring editor, you would value your own journalistic integrity a little higher than the profits of those you’re seeking to protect.

Regards
Kristian Appelt
Director
Auto Services Group

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