Government announces reforms to parallel imports of new cars

On 10 February 2016, the Federal Government announced that it would amend the Motor Vehicle Standards Act to reduce existing restrictions on the parallel import of new motor vehicles.

Precise details of the amendments are yet to be released and the Government has stated that they will be refined through further consultation with stakeholders. However, the headline changes are that the Government plans to:

1. No longer require imported new vehicles to carry an identification or compliance plate (instead there will be an online register of approved vehicles);
2. Allow consumers to personally import ‘new’ vehicles (without a compliance plate), on the following conditions:
   1. the vehicle must be imported from a country with ‘comparable standards’ to Australia’s – at present the Government has acknowledged that Japan and the United Kingdom (both right-hand drive markets) meet this standard for cars, and that motorcycles could also be imported from the USA and the EU;
   2. the vehicle must be less than 12 months old and have no more than 500km on the odometer; and
   3. a limit of one vehicle every two years will apply per person;
3. Accelerate the process of harmonizing the Australian Design Rules with international standards.

Under the Government’s reform plans, imported new vehicles will undergo inspection by an independent third-party. Some differences in the ‘comparable standards’ are proposed to be addressed through modification requirements (for example, in the context of child restraints).

Application to used cars

The focus of the Government’s reforms is on new cars, not used cars. However, some changes will be made to existing restrictions on the parallel import of used cars. Among other things, the Government plans to:

1. Remove quotas on the number of vehicles which can be imported by ‘Registered Automotive Workshops’; and
2. Allow imported used vehicles to be entered on the Register of Specialist and Enthusiast Vehicles if they meet any one of the following five criteria:
   1. performance — high-performance vehicles with specifications (e.g. power to weight ratio) significantly superior to mainstream vehicles in Australia;
   2. environmental — vehicles that offer environmental performance (e.g. emissions of carbon dioxide per km) significantly superior to mainstream vehicles in Australia;
   3. mobility — vehicles manufactured with special features to assist people with a disability;
   4. rarity — vehicles of which only small quantities have been produced; or
   5. left-hand-drive — vehicles originally manufactured as left-hand-drive, of which right-hand-drive versions are not available in any other country.
3. Adjust the ‘older vehicle’ import eligibility criterion from vehicles manufactured before 1989, to vehicles older than 25 years.

Timing for implementation

The Government’s planned reforms to the Motor Vehicles and Standards Act are expected to be introduced in 2018.

More information on the proposed reforms is available here.

This article was written by Christian Teese, Associate and Evan Stents, Partner.