Future of the Automotive Industry
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SENATE INQUIRY
Future of Australia's Automotive Industry
Submission to the Senate Standing Committee on Economics
http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Automotive_industry_2014
Senate Inquiry into the future of Australia's Auto Industry
On behalf of the Motoring Advisory Council (MAC) and the member base of the Australian Motoring Enthusiast Party (AMEP), we commend the Committee on calling for this review. It is with great pleasure that I make this submission in my capacity as chairman of the MAC.
The MAC is an initiative of the Australian Motoring Enthusiast Party bringing together peak motoring bodies driven to inform governments on motoring issues.
This review has the potential to compliment the findings of the reviews of the Motor Vehicle Standards Act, and the Senate Inquiry into Aspects of Road Safety. I also formally acknowledge and highlight the Australian Automotive Industry Summit held in August 2015, as a key milestone demonstrating the diversity of the industry to this Inquiry.
The future direction of the Australian automotive industry is an issue close to the hearts of the motoring enthusiast community. While the impending wind up of vehicle manufacturing is a very regrettable and emotional milestone for our community, it is acknowledged that we must look to the future.
"This inquiry provides an excellent opportunity to re-evaluate our current regulatory frameworks to stimulate the wider automotive industry, as we approach the wind up of domestic vehicle manufacturing in Australia. This is a unique opportunity to adapt for the future."
The opportunities for skills development, business and employment are enormous if we can further encourage sustainable growth in other automotive sectors while domestic vehicle manufacturing winds down. This type of focus can reduce the social, economic and regional impacts of the domestic manufacturing losses.
"It is crucial that the whole industry is considered through a wider scope as part of a vision that reflects the needs of the businesses and industry sectors that will remain after domestic vehicle manufacturing ceases."
The decisions we make now will shape the future of the entire sector. Australia continues to create people that possess passion and enthusiasm for automotive products. It is crucial that the automotive market keeps a foot hold within the Australian economy by building on what we do well now and looking forward to developing the technologies of the future.
State based inconsistency of regulations, decades of poorly aligned legislation and a lack of evidence-based decision making in the road safety sphere concerning enthusiast vehicles, continues to strangle the automotive industries that support our enthusiast community and the Australian Motoring Culture.
The commentary in this submission is intended to highlight gaps and opportunities to encourage government to explore better ways of exercising its regulatory role and promote growth within the wider automotive industry. We believe simple changes can be made to support the industry, economy and the Australian Motoring Culture into the future.
I thank you for taking the time to accept this submission and look forward to future opportunities to engage in issues that affect motoring in this country.
Pete Styles – Chairman
Motoring Advisory Council (MAC)
The Motoring Advisory Council is an apolitical mechanism combining peak motoring bodies, driven to inform Government on motoring issues. The MAC is an initiative of the Australian Motoring Enthusiast Party.
Key Affirmations:
We acknowledge the following key points and provide support for other submissions to this inquiry in advance of further comment:
Acknowledgements from the MVSA Review
Road trauma costs the community $27 billion each year.
Significant changes have occurred within the domestic and global car markets since the MVSA was last reviewed, 14 years ago. The impending review of the MVSA has wide reaching implications for the next 2 decades in terms of age and safety performance of the Australian fleet. The automotive industry will also be heavily influenced by the review of the MVSA.
The Government has a role to play in controlling the standard of vehicles entering the Australian market for the first time.
Of over 1 million vehicles entering the Australian vehicle markets each year, 98% of them are new vehicles, with 88% of them imported and 10% of them manufactured domestically here in Australia. Used vehicle imports currently account for 1.9% of vehicles entering the market each year. After 2017 all vehicles entering the Australian vehicle market will be imported.
Over the past 40 years regulation of safety features has contributed significantly to road toll reduction and injury minimisation from vehicle crashes.
Australia has been a leading nation in terms of ANCAP testing regimes and developing best practice vehicle standards in the form of ADR's to date. Regimes are being harmonised with NCAP ratings and international standards under wider changes to International Whole Vehicle Type Approval.
MAC Representative, Auto Skills Australia – Automotive Environmental Scan 2014
The automotive industry contributes $38.4bn per year or 2.6% of GDP.
Small businesses comprise about 94% of the automotive industry and are facing severe pressures with closing trends increasing. Vehicle body repair businesses account for one third of the business losses as many struggle to adapt to new vehicle technologies and insurance company influences.
By contrast vehicle parts and wholesale industry businesses is the fastest growing automotive sector demonstrating equivalent employment numbers as the manufacturing sector.
Reductions in employment to date associated with the automotive manufacturing and parts sector have been more than compensated for by growth in other sectors of the automotive industry.
The automotive aftermarket accessories and recreational vehicle markets continue to show steady and booming growth rates in most states
MAC Representative, Australian Automotive Aftermarket Association – Submission 5
AAAA represents over 1850 companies nationally that are engaged in the manufacture and distribution of automotive aftermarket parts, accessories, workshop tools and equipment in a sector that turns over $11 billion per annum and employs over 40,000 Australians.
Automotive aftermarket manufacturing represents 36% of all automotive manufacturing in Australia at $5.2 billion per annum employing 21,000 people and exporting $800 million per year of locally manufactured product. The aftermarket segment continues to show strong year -on-year growth generated by global demand for specialised retrofit and personalisation components.
The aftermarket manufacturing industry operates in a market where products are purchased on innovation, performance and features rather than price placing it perfectly within a globally competitive sector. These businesses have been successful because they have made significant investments in R&D and capital equipment with a strong export focus under 'demand pull' models.
The industry is well poised to take on resources and employment losses of the manufacturing sector with minimal retraining or adaption however narrow focus of the Automotive Transformation Scheme (ATS) eligibility criteria continues to hold back opportunities for growth.
The MAC supports all recommendations of the AAAA including broadening funding initiatives within the ATS prior to it's wind up in 2017 to provide nationwide opportunities for growth within the automotive aftermarket industry.
The AAAA recommendation for an Automotive Aftermarket Lab for development of new technologies is strongly supported by the MAC. Government support for a facility in collaboration between CAMS and AAAA is proposed to foster innovation within niche markets.
MAC Representative, Confederation of Australian Motor Sport – Submission 7
In 2013 Australian motorsport generated $2.7bn toward the Australian economy and continues to provide opportunity for growth within the automotive industry as an area of world leading technology potential.
The MAC further recognises the economic value motorsport brings at the regional level through major events and venues (ie Bathurst City) and by the ongoing support of grass roots motorsport such as karting and motocross.
Senator Muir's recently supported motion to the senate acknowledging this contribution to the economy is also highlighted.
The fourth most watched sport in terms of attendance while recognised as an elite sport received only $340,000 of development funding from government. The MAC supports opportunities to include motorsport ventures within a broader funding initiative of the ATS prior to it's wind up in 2017 to provide opportunities for growth within the automotive industry.
The submission promotes and the MAC supports the establishment of a Motor Sport Centre of Excellence which includes motor sport training and development to foster emerging driving and engineering talents as well as automotive innovation, design, and niche manufacturing potential sighting Silverstone Park (UK) as an example of a working model.
Motor sport and the automotive aftermarket can work together to retain skills and jobs in Australia. Australia has a vibrant and profitable aftermarket industry, manufacturing and distributing quality automotive components domestically and for export.
MAC Representative, Auto Services Group – Submission
The MAC asserts that Auto Services Group are best placed to make recommendations to refinement of the SEV's scheme and import regulatory frameworks. With so many myths and misdirections surrounding imported used vehicles generated by bodies with a vested interest in new vehicle sales, it is appropriate to adequately weight this submission.
Opportunities to improve import processes to streamline and simplify processes should be considered. Using small business from the market can add integrity, synergies and value to the system generating business where it has a greater level of impact while also supporting effective enforcement within the scheme.
As MAC chairman I understand that the current used vehicle import industry is unsustainable in it's current form due to the regulatory limitations placed on the market by available variants. Diversity is the cornerstone of the enthusiast community. Accordingly I call for a firm commitment by this senate review to make the necessary changes identified by Auto Services Group where they support the needs of the Australian Enthusiast Culture.
Key notes from other submissions
The Department of Industry and Science representative acknowledged at the Canberra hearing that Australian market has few specialised vehicle manufacturers, suggesting that the UK specialised enthusiast model may not be as effective here in Australia due to limitations of the market.
The MAC asserts that a number of submissions have provided evidence to the contrary supporting the call. With Australia's demonstrated excellence in the aftermarket and motorsport fields substantial opportunities exist within the specialised enthusiast vehicle market.
The Austrade appearance at Canberra hearing acknowledged opportunities for the Aftermarket Industry growth to export products to China/India where growing aspirational desire to own and personalise vehicles is rapidly increasing. Australia has a very good reputation in this space within international markets.
The MAC highlights this opportunity with its direct relationship to the AAAA submission.
The TOMCAR submission asserted that "over time, the continued narrowing of automotive industry policy has cost the Australian community. The cost is the missed opportunities to build upon the breadth and complexity of automotive production: agriculture, mining vehicles, truck, bus, recreational vehicles, motorised personal vehicles, aftermarket, parts and accessories, performance enhancement, performance modification, aftermarket safety components, 4WD components and special purpose vehicles."
The MAC asserts that this is an example of an industry business demonstrating to the committee that the regulatory framework is holding the industry back from innovation, job growth and economic productivity.
It was generally observed that a number of submissions supported or called for a widening of the eligibility criteria of the ATS or opportunity for funding support to 'soften' the R&D costs. The CAMS and AAAA model for a centre for excellence or aftermarket lab strongly support the principles of these calls.
Senate Inquiry – Future of the Automotive Industry
A real vision for the future of the Australian Automotive Industry is to build upon what we do well.
The automotive aftermarket sector is proof there are viable and growing automotive manufacturing sectors in Australia. Local aftermarket manufacturers produce parts, accessories, workshop tools and equipment and speciality equipment such as 4WD, high performance and motorsport components.
1. National Consistency – Create a seamless national economy, reducing cost incurred by business in complying with unnecessary and inconsistent regulations across jurisdictions.
2. Develop a regulatory framework that supports the growth of the automotive aftermarket industry and enthusiast importers.
National Consistency – Create a seamless national economy, reducing cost incurred by business in complying with unnecessary and inconsistent regulations across jurisdictions.
We assert that the National Code of Practice (NCOP) for light vehicle modifications must be rolled out nationally to all states under an applied law system, rather than the current model law system. In addition to administratively linking NCOP to the NRSS, to compliment the applied law roll out, the VSCCS model (NSW) should be considered by this review and included in the applied law package to provide a consistent mechanism for engineer certified modifications that gives the aftermarket industry scope, certainty and accountability when developing products to market.
We cannot continue to send our enforcement officers out with insufficient education and training to spot the hazards and understand vehicle defects before they go for the book. We can't break down the stereotypes and attitudes towards enforcement if they don't understand the problems.
Given the wide range of vehicles on our roads today and the even wider range of imported vehicles on our roads in the future, more must be done to address the issue.
The MAC recommends an annual learning workshop be held by a partnership between engineer certifiers, enforcement officers, police and regulators. The recommendations made by sections B3 and E8 are also strongly recommended to realign resources, implement better systems, engineer certify modifications and assure regular checks for vehicle safety occur.
State based inconsistency and enforcement around modifications are still significant issues to our community. These individual state authority systems, requirements and layers of confusing red tape strangle the Motoring Culture by burying enthusiasts in regulation paperwork that even the best engineers struggle to follow.
Worse still enthusiasts currently struggle with the legality of modifications (engineer certified or not) as they travel interstate. It is lunacy that an Australian vehicle owner can drive a legally certified vehicle in their home state, but then be deemed defective in another.
Vehicle standards in Australia must be nationally consistent for the whole of a vehicle's life. This should be regardless to the extent of its age or modifications provided adequate engineer certification is in place to deem the vehicles are safe and fit for Australian roads.
Amendments to the MVSA could further strengthen the use of NCOP and VSB14, by pushing a framework that offers national consistency. By shifting toward a nationally consistent model that is heavily linked to the MVSA, state road authorities can shift into a registration, compliance and enforcement role. Removing the regulatory role from state road authorities enables government savings by reallocation of resources. It also prevents state bodies over ruling the national or international vehicle standards by implementing local registration controls.
The NCOP is widely accepted by industry and enthusiasts as a fair, effective, transparent and easy to follow mechanism for determining the requirements of vehicle modification. Linking the document to the MVSA is an administrative exercise that offers opportunities to save tax payer $ through cutting red tape and reallocating state resources, without introducing new or increased safety risks.
To regulate safety standards of imported used light vehicles that have been modified it is recommended by the MAC, that import inspection systems harmonise with the NCOP by applying VSB14 and conducting engineer inspections to certify the vehicle as safe. This is a consistent and pragmatic approach to ensuring that even modified imported vehicles comply with the same regulations that are enforced within Australia by the states on locally owned and produced vehicles.
Example: An imported classic American muscle car, European classic and Italian exotic super car are bought at auction from USA.
The Italian Exotic is factory original spec unchanged since new. Regulation systems would allow this vehicle to be imported as its originality is intact. After its first registration modifications to the vehicle are made to increase horsepower significantly. By upgrading the Turbo chargers and fitting an aftermarket ECU the imported sports car goes far beyond its original spec status at the time of import.
The European classic has been fitted with upgrade disc brakes and suspension from an Aftermarket supplier to improve handling and performance of the vehicle. The stereo has been replaced with a newer device. Paint is original. Regulation systems are known to require that the vehicle be reverted to stock drum brakes, original stereo, and factory suspension to align with its release from factory. The safety and value of the vehicle are now both compromised by the import regulation system.
The American muscle car has upgraded disc brakes also from another model in the manufacturer range at the time. It has been resprayed with a new colour but the deed title, matching serial numbers and vehicle history checks out fine. This vehicle may be required to be reverted to original colour and reinstate the original drum brakes. The safety and value of the vehicle are now both compromised by the import regulation system.
These examples demonstrate regulations and import requirements that our members have faced. The vehicles could instead be assessed against the National Code of Practice for light vehicle modification document and VSB14. A qualified engineer can quickly and cost effectively consider the vehicles safety performance and it's fitness for use on Australian roads in the modified state
By linking SEV'S and NCOP
I concur with the paper findings and many prior comments that the current act is overly complex, out dated and poorly linked to other legislation in some areas. Anything that improves clarity, cuts unnecessary red tape and removes duplication is strongly supported by the MAC.
Improved legislative links and updated drafting will enable effective decision making, enforcement and in turn reduce costs. This is not that dissimilar to the achievements noted by the recent NECF model implemented within the energy supply industry as a legislative mechanism to achieve uniform standards and processes.
Implementing Option 4 will effectively encourage a fair and transparent enforcement model that bridges the gap between the community and regulator/enforcement agencies.
With regard to inspections and certifying I believe the NSW system should be considered by government with considerable weight as it is the only whole of life ongoing inspection system that ensures vehicles remain safe for Australian roads. Recent changes have further refined the NSW system to take full advantage of electronic records and databases. Electronic registration compliance inspections offer annual intervention with vehicle condition in a simple and affordable manner ($34 inspection fee) that promotes business activity and consistent 3rd party regulation within the network of approved automotive workshops.
Similarly the recent VSCCS process has implemented a practical methodology for examining, assessing, recording and enforcing regulatory controls (such as NCOP / VSB14) over vehicles which have been engineer certified with modifications. The current system enables modifications to be listed, photographed and accessed by enforcement officers on the fly through the vehicle registration data bases. Another important achievement that is noted by the VSCCS is the appropriate use of professional indemnity insurance and an engineer certifier licensing system to assure government that appropriate actions and accountabilities are easily determined.
Systems such as the ones above offer significant efficiencies and effectiveness within the enforcement sphere. This can offer significant savings to government and even motorists. Current systems are known to require motorists to have vehicles inspected for suspected defects, illegal modifications and safety concerns that could be resolved without cost on the road side by a system that clearly identifies vehicle modifications.
In response to Q7.10 state road authorities can shift into a registration, compliance and enforcement role. Removing the regulatory role from state road authorities enables government savings by reallocation of resources. It also prevents state bodies over ruling the national or international vehicle standards by implementing local registration controls, effectively removing state based divergence in regulations.
By way of example the NCOP is widely accepted by industry and enthusiasts as a fair, effective, transparent and easy to follow mechanism for determining the requirements of vehicle modification. Similar documents can be produced that harmonise with international technology standards, vehicle supply standards and minimum safety baselines. Linking these documents to the MVSA is an administrative exercise that offers opportunities to save tax payer $ through cutting red tape and reallocating state resources, without introducing new or increased safety risks.
With regard to vehicle recalls I believe a model that broadens powers and access to conduct the recalls is the best way forward. Establishing an accessible network of recalls and available parts suppliers would ensure all vehicles are captured when being maintained by local workshops and manufacturer workshops. In the interest of road safety the magnitude of this should not be overlooked. This would also provide a secondary benefit of raising consumer confidence when buying second hand private workshop serviced vehicles that have not been regularly serviced by the manufacturer from new.
We openly support the Productivity Commission findings as the benefits to our community are significant and acknowledge efforts and achievements of past and current governments to harmonise ADR's with UN regulations as a long term goal from 1999 review of the Act. Particularly relevant when considering that the majority of imported new vehicles are compliant to UN regulations.
The potential compliance cost savings of $261million per year that are currently passed onto consumers are also noted as a significant contributor to the cost of motor vehicles in Australia and an opportunity well worth pursuing. These are in addition to interim savings anticipated in advance of IWVTA acceptance.
In addition to savings benefits for vehicle manufacturers, amendments made to the MVSA could further strengthen national consistency by pushing an internationally harmonised framework that can complement the use of NCOP and VSB14. The NCOP is widely accepted by industry and enthusiasts as a fair, effective, transparent and easy to follow mechanism for determining the requirements of vehicle modification.
Product example: The world's best braided brake lines for performance braking applications are manufactured in Europe. Australian standards do not directly harmonise with these products. Lesser quality products are available in Australia but for enthusiasts wishing to use the euro brake lines in Australia a long winded process is required to prove that the world's best brake lines exceed Australian standards.
By shifting toward a nationally consistent standards model that is heavily linked to the MVSA, local inconsistencies that undermine regulatory effectiveness can be replaced with a nationally consistent model that is fit for purpose within a diversified vehicle import supply mechanism. It also prevents state bodies over ruling the national or international vehicle standards by implementing local registration controls, effectively removing state based divergence in regulations.
Under this type of model state road authorities can shift into a registration, compliance and enforcement role. Removing the regulatory role from state road authorities enables government savings by reallocation of resources.
Importation of pre 1989 Historic, Classic, Exotic, Competition and Customised vehicles
With regard to the review I do not agree that Pre 1989 enthusiast vehicles should be grouped with the Other Used vehicles in Table 3 (page 26) and diagram 3 (page 48) as their historic prestige and low risk of involvement in vehicle crashes is not conducive to assessing them as high risk.
While I agree the risk based approach is effective, I do not believe Historic, Classic or pre 1989 vehicles are effectively considered in the context of that review. Their supply numbers can only ever be limited which prevents them having any significant impact on the age of the vehicle fleet. These vehicles are typically imported for special reasons and are rarely driven on the roads (if at all) as it reduces their value significantly. Many owners determine that regular driving exposes them to risk of crashes caused by other road users.
Vehicles imported that are not near new vehicles but produced after 1989 would be more appropriately considered by the "other" category as they do reflect the higher risk of being able to be supplied in higher volumes with lower vehicle safety standards and would be driven daily on Australian roads. This is very different to per 1989 vehicles as supply tends to drop markedly after the vehicle reaches 25 years of age as many of them are scrapped, reach serviceable life without restoration or sustain irreparable damage.
I propose that these vehicle import types are separated out as a 5th grouping and assessed separately to reflect their differing use patterns, exposure to traffic and public risk profile.
Importing regulations and controls
The restrictions and regulation burdens placed on these types of vehicles should be significantly relaxed and harmonised with the NCOP and provisions of VSB14. Vehicles of this nature do not represent a significant quantity of the Australian vehicle fleet and offer significant prestige value. Their safety can be effectively assessed against NCOP and VSB14 by appropriately qualified engineer certifiers to determine safety for use in Australia.
The international market demand and values placed on vehicles such are truly incredible. One only has to witness a few classic vehicle auctions to see in excess of $100,000 AU dollars spent on these vehicles. With some vehicles selling for a quarter of a million AU dollars, it is highly appropriate that they be assessed separately.
Allowing Australian consumers to purchase from these markets privately or through specialised import businesses in a simplified manner would significantly benefit the Australian Motoring Culture and generate revenue for the government through import duty applied.
The beauty of these vehicles should be open to Australians to enjoy rather than limited to the elite business owners and high rollers by overbearing restrictions and demands.
Consumer protections would need to remain in place and potentially strengthened, by carefully considering methods to determine authenticity of the vehicle. It is critical to prevent vehicle re-birthing and theft issues that already plague the existing systems
Specialised Vehicles
I recommend the removal of the SEV process and platform. Harmonising it with other processes considered by the MVSA review seems most efficient and suitable.
It seems relevant that Government should also adequately consider the tax implications of removing the LCT as part of this review. It was not apparent that this has been done yet.
I firmly believe Australia is leading the way with heavy vehicle standards and safety controls. This belief was also apparent in the MVSA review document. Any amendments made through the MVSA review should maintain a level of consistency and harmonisation of ADR's that concern heavy vehicles without compromising Australian safety baselines.
Develop a separate code for specialist and enthusiast vehicles.
CASE FOR CHANGE…
The Motoring Enthusiast Culture in Australia is strong. It is made up of a diverse group of people from all walks of life, who contribute a considerable amount to the Australian economy every week, every year.
There is a whole industry around personalising vehicles, motorsport and the motoring lifestyle, that present a real opportunity for economic growth and jobs in Australia.
However, we need to take the handbrake off…
We need to get rid of the complexity and the over regulation that plague this industry and the community, and hold it back from achieving its full potential. Fully realised, this sector could become the new engine room for the Automotive Industry.
With car manufacturing in this country coming to an end, it is crucial we look at developing niche markets in Australia focusing on specialist and enthusiast vehicles and components. We are world renown for our quality components and our innovation, and we don't want to lose those skills.
The desire to personalise vehicles is a world-wide phenomena and many countries have developed strong economies around this industry. Austrades presented evidence at the Senate Auto Inquiry recently, highlighting export opportunities in China, with the growing middle class and their desire to personalise their vehicles. The same opportunity exists here in Australia.
However, in order to realise this potential we need to develop a regulatory framework that supports the growth of these industries, one that is based on safety not compliance, similar to what they do in the UK.
"Personalising, customising vehicles could become a growth industry here in Australia if we develop a regulatory framework that would support it".
REBUILDING THE MOTOR INDUSTRY
A POSITIVE POLICY POSITION
This plan involves consideration of the Motor Vehicle Standards Act, ADRs, the Productivity Commission Report into the motor vehicle industry and world's best practise.
The purpose of this report is to present a cohesive, common sense plan for the reform of the Motor Vehicle Standards Act [ADRs] in order to encourage development of a specialist small- medium business based, high value motor vehicle building and component industry in concert with reviewing and dissecting the recent Productivity Commission Report.
The plan has been formulated following extensive research, review of the Productivity Commission Report and Submissions, numerous interviews, visits to both the UK and Germany to review their Compliance [design rule] Regulations and motor vehicle business operations, visits to existing small- medium businesses in the area both here and overseas, liaison with key Industry Bodies, interaction with the present Regulator and review of international Regulations and Regulators.
The plan involves recognising that there is a 'mainstream vehicle' market and a 'specialist / enthusiast vehicle' market, that each must be treated separately and that rules and attitude in the Regulator be adopted to encourage, rather than stifle, development in the high value specialist / enthusiast vehicle arena in which Australia can compete with the world's best.
The research clearly indicates that a very successful small-medium based low volume specialist and enthusiast vehicle design, building and aftermarket industry can be encouraged and grown in Australia, along the highly successful UK regulatory and industry lines.
This will require simple reform of the ADRs to easily and cheaply adopt internationally accepted standards at both the mainstream market level and in the specialist and enthusiast vehicle arena and replace the restrictive local rules presently in place. It will require recognition that the two markets require different compliance approaches, which will result in development in that industry, cost savings to the industry and therefore cost savings to the consumer.
It allows significant savings in administrative costs in the Department as Compliance issues become ''self-certification '' in line with the USA / Canadian mode and Departmental staff numbers can be significantly reduced.
The author has a 30 plus year career in Law being Principal of a successful medium sized firm with some 90 staff, before selling that business and investing in a motor industry based business. A family background in the motor industry in the UK gives excellent knowledge of its operation, that family business having commenced in 1910 and continuously family run until sold in the late 90's.
A strong interest in Road Safety developed, resulting in Policy writing in that area, that Policy being adopted by the Coalition Government in NSW with subsequent appointment by the Minister to a Board dealing with development of the learner driver training policy proposed. The writer has also served on a number of Boards and was a peer elected member of the relevant Professional Association for some 10 years.
As an investor in the motor industry, as to vehicle sales, used vehicle import and after-market component development and sales [including exports], the author has extensive and direct experience of the administrative hurdles created by the Department and its use and interpretation of the ADRs in an anti- business manner. Case studies are provided below.
The research also included trips to both the UK and Germany to visit low volume specialist and enthusiast vehicle builders and also aftermarket component suppliers as well as interviews with stakeholders regarding the Regulations that apply to compliance of both mainstream and specialist/ enthusiast vehicles in the UK, Europe, Japan and the USA.
The Productivity Commission Report and Submissions were considered in detail. The Review announced of the Motor Vehicle Standards Act [ADRs] was considered as were the ADRs themselves. Stakeholders in the industry including the major Industry Associations representing all areas, from mainstream vehicles to specialist aftermarket component manufacturers, were consulted by the writer and their views obtained.
It involved extensive research into and review of the NZ used vehicle Scheme proposed by the Productivity Commission and in particular in depth interview with a key witness whose evidence was largely behind the Report recommendation.
Overseas experience shows that with the correct Legislative framework and an attitudinal shift in the Regulator, jobs in the motor industry can grow via development of a specialist and enthusiast vehicle design, building and after-market component industry. This is the successful model employed in the UK where tens of thousands of jobs lie in this specialist area of the industry and billons of export Pounds are earnt annually.
This UK model should be followed, encouraging the building of a strong, specialised high value, high skill motor vehicle and after-market component industry, not in the mainstream vehicle market where Australia is no longer competitive and the manufacturers are leaving local production.
Reform of the Motor Vehicle Standards Act
The Act is an impediment to development of new industry in the high value, high skill specialist/ enthusiast vehicle and component industry. It is costly to mainstream importers and particularly expensive to the Government.
Reform of this Act in a common-sense way will lead to growth in industry jobs and to significant reductions in costs in the Department.
Establish testing and prototyping facilities in Australia. The aftermarket is R&D intensive but is quick to market. An Australian Automotive Aftermarket Lab would be a meaningful contribution to expanding this industry by supporting the growth of automotive engineering products, innovations, expertise and R&D in Australia.
Motorsport Sector – Australia has a significant record in the design, engineering and manufacture of performance racing and motor sport technologies and components, build on what we do well by promoting the development of a Motorsport Centre for Excellence.
Employment: National Marketing Campaign to attract people to the Industry – change perceptions.
Enthusiast production vehicles (post 1989)
Ultimately many of the production vehicles go on to become enthusiast vehicles. Some gain a cult enthusiasm from new (examples: Holden SS Commodore, Ford XR6 Turbo, Nissan Skyline or Toyota 86). Others take longer to develop a community of followers and the reasoning behind it can be very diverse (examples: Toyota Hilux, Mazda MX5). Some models never become widely available to our enthusiasts due to the import restrictions placed on new or used vehicles to protect our domestic car manufacturing sector (examples: Ford Mustang, Chevrolet Impala).
Given the sector is winding up, this provides opportunity to open markets to a wider range of vehicles as they are supplied new to the international market, offering a freedom of choice and value for money not previously enjoyed by Australians.
Direct Commentary
The importance of design standards on imported vehicles, as Australian vehicle manufacturing winds down
3. Modified vehicles
We assert that the National Code of Practice for light vehicle modifications must be rolled out nationally to all states under an applied law system, rather than the current model law system. The model law system allowing states to partially adopt, supplement or delay application of is a fundamental flaw allowing national inconsistencies and confusion around vehicle modifications to continue.
In addition to administratively linking to the NRSS, to compliment the applied law roll out of NCOP, the VSCCS model (NSW) should be considered by this review and included in the applied law package to provide a consistent mechanism for engineer certified modifications.
Removing the regulatory role from state road authorities enables government to reallocate the resources to strengthen compliance operations. It prevents state bodies over ruling the national or international vehicle standards by implementing local registration controls and strengthens enforcement on the ground where it is most needed.
4. New mass production vehicles influencing road safety performance
The new vehicle market is the strongest tool to regulate the quality and safety of vehicles on Australian roads.
As the majority of new vehicles imported into the fleet go into their second lives as used vehicles, the quality and affordability of vehicles in the new vehicle market has a heavy impact on used vehicle consumers down the line. It is here, in the used vehicle sphere, that road safety statistics have benefitted most. Once the average age of the fleet reaches a new safety technology milestone, crash statistics often reveal larger drops in severity. The initial safety benefit is typically minor as technology develops, while in comparison the much larger drop in crash severity occurs once these safer vehicles become affordable to average families, businesses and commuters.
While Australia's average vehicle fleet age of 10 years, is older than other countries, such as Japan's 7.5 years, and Great Britain's 7.3 years, it is important to acknowledge the differences in geography and motoring culture in those countries. While the average distance travelled by Australians is reducing, the nature of the Australian psyche, the wide geographic spread of population and even the urban density remains relatively unchanged. We are not subject to the same levels of air quality influence requiring turnover of vehicles more regularly (Japan).
The Australian people still drive more than people of those countries in a range of motoring conditions that are far more variable. It is the Australian way to get full use out of our assets, stemming back to learning's from our settlement heritage. This is not a bad thing at all.
We are of the view that the most effective way to keep safety standards up and reduce the average age of the vehicle fleet in this country is to reduce the bottom line of prices by introducing competition and choice in the market. Regulation should be further harmonised with international standards whilst maintaining a strong focus on minimum safety and performance ratings such as NCAP. Beyond that regulation should be considerably wound back where practical, allowing the market to resolve the problems.
The diversity of our member base and culture is strongly linked by the freedom to modify vehicles as owners seek to customise, performance enhance, adapt, retrofit and restore them years, or even decades after release.
The $11billion Aftermarket Industry and its steady growth is a testament to enthusiasts desires to express themselves through their vehicles. That passion can start from a family grounding with the model, a new purchase, a child-hood experience, literally anything.
The National Code of Practice for Light Vehicle Modifications (NCOP) and VSB14 regulate modifications in a very effective way against ADR's to ensure vehicles remain safe and fit for use on Australian Roads. States such as NSW and QLD have recently shifted (to variable degrees) towards the NCOP regulation framework. It is widely accepted by the enthusiast community as a sensible and workable system to assess vehicle modifications against.
There is still some way to go in this space. We have yet to reach a nationally consistent engineering signatory system, recording system for registration and enforcement resource for Police use on the ground in every state. NSW have lead the way having recently rolled out a system that made it a reality. So far NSW remains the only state to take it to the next level. The VSCCS and its associated resources were developed by the RMS in partnership with engineer certifiers and enthusiasts, gaining wide community support and national recognition for its success.
The VSCCS offers significant efficiencies and effectiveness within the enforcement sphere by providing all necessary information to the Police officers computer on the ground. It delivers significant savings to government and motorists. Other systems are known to require motorists to have vehicles inspected for suspected defects, illegal modifications and safety concerns at cost to the owner on the owners time, by using government resources such as inspectors and inspection stations. Resolving modification legality on the road side by a system that clearly identifies legal vehicle modifications puts enforcement focus where it's needed.
State based inconsistency of vehicle standards and enforcement around modifications are still significant issues to our community. These individual state authority systems, requirements and layers of confusing red tape strangle the Motoring Culture by burying enthusiasts in inconsistent regulation paperwork that even the best engineers struggle to follow.
Worse still enthusiasts currently struggle with the legality of modifications (engineer certified or not) as they travel interstate. It is lunacy that an Australian vehicle owner can drive a legally certified vehicle in their home state, but then be deemed defective in another. Of particular concern is the enforcement regime powers in QLD that enable a certified vehicle from another state to be impounded, for not meeting out dated and inferior QLD guidelines.
Vehicle standards in Australia must be nationally consistent for the whole of a vehicle's life if safety benefits are to be realised in the later years of a vehicles serviceable life. This should be regardless of age or the extent of its modifications. Provided adequate engineer certification is in place to deem the vehicles are safe and fit for Australian roads against ADR's is no reason to believe they are no longer safe.
Amendments to the MVSA and NRSS could further strengthen the use of NCOP and VSB14, by pushing a framework that offers national consistency. By shifting toward a nationally consistent model that is heavily linked to these documents, state road authorities can shift into a registration, compliance and enforcement role. Removing the regulatory role from state road authorities enables government savings by reallocation of resources. It also prevents state bodies over ruling the national or international vehicle standards by implementing local registration controls.
The effectiveness should not be down played in the road safety space either. National consistency of application will almost certainly lead to wider acceptance of road safety initiatives as they apply to modified vehicles and deliver consistency of vehicle safety performance measures further down into the average fleet age.
The NCOP is widely accepted by industry and enthusiasts as a fair, effective, transparent and easy to follow mechanism for determining the safe requirements of vehicle modification. Linking the document to the NRSS is an administrative exercise that offers clarity and commitment without introducing new or increased safety risks.
6. Importing vehicles with modifications
The current system of importing vehicles with modifications is frustrating, poorly considered and well overdue for an overhaul under the MVSA review. The most obvious failing occurs when older vehicles with disc brake upgrades are required by the import regulator to reinstate the original drum brakes to assure the vehicle is as manufactured standard. A disc brake upgrade is a common safety upgrade found on older imported vehicles.
To regulate safety standards of imported used light vehicles that have been modified the MAC recommend that import inspection systems harmonise with the National Code of Practice for light vehicle modifications. A qualified engineer can quickly and cost effectively consider the vehicles safety performance and it's fitness for use on Australian roads in the modified state against VSB14 and all applicable ADR's for that vehicle.
Applying VSB14 through certified engineer inspections assures safety, consistency of application and accountability for decisions. This is a consistent, pragmatic approach to ensuring that imported vehicles with modifications comply with the same regulations that are enforced within Australia on locally owned and produced vehicles. This approach would promote growth in the vehicle engineering industry by outsourcing aspects of import regulator duties.
7. Importation of pre 1989 historic, classic, exotic, competition and customised vehicles
a. Community Risk
Pre 1989 enthusiast vehicles should not be grouped by any review with Other Used vehicles. They require special consideration. An example of this occurred in the MVSA review.
While we agree the risk based approach is effective, we do not believe Historic, Classic or pre 1989 vehicles are effectively considered in the context of that review and we ask that the NRSS makes the same conclusion as we have put forward. Their supply numbers can only ever be limited which prevents them having any significant impact on the age of the vehicle fleet. Pre 1989 vehicles supply tends to drop markedly after the vehicle reaches 25 years of age as many of them are scrapped, reach serviceable life without restoration or sustain irreparable damage.
These vehicles are typically imported for special reasons and are rarely driven on the roads (if at all) as it reduces their value significantly. Many owners self determine that regular driving exposes them to risk of crashes caused by other road users.
The international market demand and values placed on vehicles like these is truly incredible. One only has to witness a few classic vehicle auctions to see in excess of $250,000 AU dollars spent on these vehicles. With some vehicles selling for over a $1 Million AU dollars, it is highly appropriate that they be assessed separately and carefully.
Increased Police Presence
Police and regulator training
Governments too focussed on the budget line of the police force performance targets and operational costs are missing the bigger picture when it comes to training. We are literally sending enforcement officers from police and regulators out without effective training. They operate on the coal face without sufficient knowledge to recognise problems on vehicles that make them dangerous. Many cannot tell a safety upgrade from dangerous modification and on countless occasions have overlooked dangerous vehicles while issuing questionable defects to another.
Vehicle emissions equipment is an example of an area poorly understood by regulators and enforcement officers. The modification of original emissions equipment is completely acceptable provided the vehicle continues to comply with noise and particle emissions targets relevant to that vehicle.
Our community have reached breaking point with Police Officers, EPA inspectors, Customs Vehicle Import Inspectors and Roadside Vehicle Inspectors who are not sufficiently trained with vehicle modifications. People with no mechanical background are making judgements on vehicles without knowledge of the standards, measures or mechanisms that govern them. Even vehicles carrying engineer certified modifications have been caught in the wide net of ignorance caused by a lack of education for enforcement teams.
We cannot continue to send our enforcement officers out like this. They need the relevant education and training to spot the hazards and understand the risks before they go for the book. We can't break down the stereotypes and attitudes towards enforcement if they don't understand the problems.
Given the wide range of vehicles on our roads today and the even wider range of vehicles on our roads in the future more must be done to address the issue. This is a huge reason behind the comments raised in the submission and this supplementary submission in section B3.
I concur that any new scheme should be considered in the context of other similar schemes including SEV's. The removal of the $12,000 import duty is a logical decision that should be progressed by government to modernise legislation in line with consolidated schemes for imports of high quality used vehicles and personally imported new vehicles such as SEV's. This offers value back to Australian consumers who choose to import high quality vehicles such as luxury, performance or specialised vehicles.
The additional $2.6 billion spent by Australians in 2011 on a shortlisted 80 vehicle models is an excellent example of the Australian consumers being hit in the hip pocket by poor government regulation systems and processes. Especially when considering the quality of the vehicles in the list and their compliance with international standards.
As motoring enthusiasts we promote the accessibility of SEV's by removing the luxury car tax. These vehicles should not be out of reach to those who aspire to own one by having to suffer additional premiums and to top up government budgets with this type of tax Taxes should be consistent in application to all, rather than isolated niches that target specific classes of individuals.
I believe the answer to ensuring such a scheme to import high quality used vehicles and personally imported new vehicles is provided by way of a network of suitably qualified engineers and inspectors. The mechanism applied to new vehicle import regulation, modification certification and ongoing registration inspections can be adapted to used vehicle imports and personal new vehicle imports to assure safety conditions are met.
Proportionately this aspect is only a small part of the overall import market. Applying a similar system to new vehicle imports that considers a vehicles compliance with UN regulations ensures efficiency of administration and parity across the board. If changes in demand are experienced, the system can still regulate over them. Capped intervention triggers or limits on vehicle import number be implemented for individuals and businesses to assist regulation and control. Age based regulation and country of origin based controls can prevent mass import of older vehicles to ensure high quality used vehicles remain within a maximum 5 year age gap and minimum safety rating of 3 starts to reduce community safety risk.
Personally imported new vehicles should be limited to light vehicles. Commercial vehicles such as trucks would carry an unacceptable risk that could undermine Australian standards leadership in this area.
I do not believe after sales service is suitable concern to negate the need for legislative update in this area as the aftermarket industry can be adequately poised to cover the gap. To assure this is possible government would need to assure aftermarket suppliers and manufacturers can access interim funding to expand operations through the provisions of the ATS.
Some element of risk should be expected and left for the market to resolve when considering new vehicle warranties. This is the competitive edge that new vehicles would offer over used vehicle imports that would openly encourage the uptake of newer vehicles. While government see a responsibility to consumers it should not be considered the governments priority to protect consumers from themselves. Our national economic and individual financial independence relies on individuals learning to make sensible financial decisions that suit their own needs and aspirations.
Given less than 2% of the vehicles imported arrive under concessional arrangements I question the validity of such overbearing and convoluted control mechanisms. Streamlining is clearly necessary while maintaining a scheme that does resemble the RAWS scheme.
Australia will continue to manufacture specialist enthusiast vehicles as this is an area we demonstrate leadership and solid market performance in. Significant opportunity exists here if regulations are adequately considered to promote market growth and absorb significant chunks of the vehicle manufacturers as they progressively close down.
The vehicles captured by this grouping are in many cases specialised in purpose and while the risk of compliance with vehicle standards are higher their uses or probabilities are polar opposites. These vehicles are not daily drivers used in commuter bump and grinds.
Our community demands balanced consideration of this area of importing vehicles. Our community is highly invested in high value, extreme rarity, specialised performance or intrinsic valued vehicles sold internationally and imported through these schemes.
The only exception to this is the importation of post 1989 vehicles.
The Australian Government and
all state and territory governments
should justify any existing and
future jurisdictional deviations
from UNECE Regulations
through comprehensive and
independent cost benefit analyses.
Transitioning to International Whole
Vehicle Type Approval (IWVTA).
IWVTA will also lead to greater
harmonisation and vehicle models
being approved for entry into
Australian and comparable markets
at a whole of vehicle level rather
than at a component level, with
savings to manufacturers
ANMP projects:
commissioning full service local electrical wiring harness design, engineering and
manufacture within the industrial transport arena—supplying into market sectors outside
the local automotive original equipment manufacturer (OEM) stream;
the development of an export brake component program and establishment of a flexible
machining/plating facility;
the development, engineering and manufacture of the 'Tomcar' in Australia;
the commercialisation of a potentially lifesaving 'Backover Avoidance System';
and new 2015 ADP projects round 1:
tuneable valve support components used in shock and strut dampers worldwide;
POST PC Review
MNIIF the establishment of a new leading edge robotic caravan chassis manufacturing facility,
increasing production volumes to meet increasing demand;
GRIIF project: the establishment of a carbon fibre composites centre for the global automotive industry, including pilot production facility
the establishment of a manufacturing facility to allow the commercial scale production of
carbon fibre wheels for supply to the automotive industry;
The Government's Industry Innovation and Competitiveness Agenda, announced on
14 October 2014, is a central part of the Government's Economic Action Strategy to build a
strong, prosperous economy for a safe, secure Australia.
The Agenda will lift the competitiveness and productivity of Australian industry by
focusing on areas of competitive strength. This will help Australia transition to smart,
high-value and export focused industries.
The Agenda sets out four ambitions that Australia must pursue:
 a lower cost, business friendly environment with less regulation, lower taxes and more
competitive markets;
 a more skilled labour force;
 better economic infrastructure; and
 industry policy that fosters innovation and entrepreneurship.
Six key initiatives make up the Agenda: encouraging employee share ownership;
reforming the vocational education and training sector; promoting science, technology and
mathematics skills in schools; accepting international standards and risk assessments for
Submission 16
certain product approvals; enhancing the 457 and investor visa programmes; and establishing
Industry Growth Centres.
The Agenda is complemented by the Government's $155 million Growth Fund, the
$50 million Manufacturing Transition Programme, the $484 million Entrepreneurs'
Infrastructure Programme and the $476 million Industry Skills Fund. Together, these
measures will help to drive excellence, not dependence, and create an economy that ensures
Australia's ongoing prosperity
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