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C. DETAILED SUBMISSION i. Australian Design Rules (ADR's) The Parliament of Victoria Road Safety Committee Inquiry into the process of development, adoption and implementation of Australian Design Rules, while acknowledging that the transfer of the responsibility for ADR development to the Federal Government was a positive step, was more than critical of the ongoing ADR development. So much so that the Committee went a step further in that it recommended that rather than the harmonisation of the Australian Design Rules (ADR) with the United Nations Economic Commission for Europe (UNECE) a move to full adoption of the UNECE regulations should be taken. There should also be recognition that design rules, whether ADR’s or UNECE, are intended to provide a minimum requirement not a state of the art outcome. ADR’s simply identify a minimum standard to be achieved and as such do not promote the adoption of the latest safety technology by manufacturers. A vehicle that meets all its applicable ADR’s may only achieve a 1.3 ANCAP star rating. On occasion there is a need for Governments to intervene when research clearly demonstrates that a particular equipment inclusion provides a greater positive outcome than its exclusion. Examples of such systems are seatbelts, front airbags, Electronic Stability Control (ESC) systems, curtain/side airbags and the banning of the use of telephone and mobile devices while vehicles are in motion. In considering solutions, mirroring legislated requirements of regimes such as the European Union and/or the USA are also a consideration. For example, the USA has adopted, by legislation, a number of mandatory safety features; ESC, enhanced head (side impact) protection, remote monitoring tyre pressure systems, enhanced rear visibility requirements and electric window anti-choking safety system requirements. If these are considered as standard, in a market where on the whole new vehicle prices are significantly lower than in Australia, why are they not standard in the Australian market? One example that highlights the clash between ADR's and accepted practice in other markets, AFMA notes the recent news that the Isofix child restraint has received regulatory approval for use in Australia via an amended ADR, for only the lower half of its fixing method. Apparently the device still needs to comply with the top fixing requirement of the ADR; a system, we understand, that is unique to Australia. This comes some 16 years after the introduction of Isofix in Europe and 11 years since adoption in America. It would appear that the amendment to the ADR was adding the approval of a part of a product, the bottom fixing, rather than removing the ADR's uniqueness. Vehicle manufacturers still need to modify their production to supply special (to Australia) fixing brackets. ii. Safer Vehicles In August 2008 a study into vehicle safety in the Australian Automotive market was less than impressed at the level of safety features and performance available in the marketplace; Parliament of Victoria, Road Safety Committee, 'Inquiry into Vehicle Safety', August 2008, IBSN 978-0-9751534-4-4. The enquiry made some 37 recommendations (see Attachment). This report's Executive Summary came to several conclusions that clearly show an inadequacy in the current Australian market (see Attachment). According to the Committee's findings (Executive Summary page xi): ../ “The availability of safety technologies is at a far lower rate in Australia than overseas"; ../ “Leading technologies are largely absent from Australian manufactured vehicles"; ../ “The Victorian and Federal Governments have not taken sufficient steps to ensure that vehicle safety in Australia keeps pace with international developments"; ../ “Contributing to disparities between leading countries and Australia is the practice of de Specification." ../ "The Committee has seen convincing evidence that vehicles imported, and even those manufactured in Australia, often have safety technologies removed from models sold in Australia. While manufacturers dispute the practice of de-specification the Committee considers that de-specification claims are valid". AFMA would support an initiative of similar intent to the 'European Block Exemption" concept in that safety features and equipment supplied as standard inclusions in other markets could not be excluded (de-specified) for the Australian market. iii. ANCAP There is a misconception that there is a connection between safety, measured in accident survivability, and compliance with ADR's; such an assumption is a fallacy. The current ADR system has been described as lagging behind best practice and as such has become a hindrance rather than an asset. Accident survivability as measured via the ANCAP testing process shows several vehicles granted ADR compliance achieve a low ANCAP safety rating; as low as one star. These products are on sale in the Australian market. At such low protection level, survivability in what is considered a typical vehicle crash (the 60 kilometre off-set frontal crash) is very low; the likelihood of serious injury is also heightened. Consideration should be given to establishing a relationship between the New Car Assessment Programs (NCAP and the European/USA/Japan equivalent) and an acceptable minimum crash protection rating that vehicles must meet before they can be registered for use in Australia. However there is an issue with this approach in that the actual criterion for (A) NCAP testing and marking does differ between various jurisdictions. The same vehicle can be awarded a different star rating in different jurisdictions. iv. Emission Control and Air Quality AFMA would like to see the introduction dates of Euro 5 and 6 brought forward in line with emissions standards already in place in vehicle manufacturing competitive countries. A reason why the Association sees this as important is the growing body of evidence identifying poor air quality, attributed to vehicle emissions especially in urban areas, is a serious health/safety risk. The majority of Australians live clustered along the coastal fringes, thus increase in population will extend the population density and is likely to exacerbate the urban air quality but also negatively impact population health issues. Major cities in Australia have ongoing pollution problems, including frequent breaches of air quality standards, resulting in pollution related health problems. There are substantial costs due to vehicle emissions and AFMA is of the view that every opportunity to mitigate these substantial costs, both in human and economic terms, should be seized. Fatalities attributed to poor air quality originating from vehicle emissions have, according to an OECD report (May 2014), led to a significant increase in the number and costs associated with premature deaths in Australia. Also a Federal Government working paper put the figures of premature deaths each year due to poor air quality at some 2,400 persons. (See Australian Government, Department of Transport and Regional Services, Bureau of Transport and Regional Economics (btre): Health Impacts of Transport Emissions in Australia: Economic Costs; btre working paper 63). Declining air quality is linked to commonly reportable health conditions among children and young adults, with respiratory conditions and exposure to urban air pollution now accounting for 2.3% of all deaths. Infrastructure Australia; Major Cities Unit: State of Australian Cities 2010. Australian vehicle emission standards lag behind those already implemented in other mature markets. In several instances by the time these standards become mandatory in Australia, comparative markets will have already moved on to higher specifications. Table 1 below indicates how much Australia lags behind a mature market such as Europe. Table 1 Comparison of the adoption dates for Euro 5 and 6 specifications
One would hope that imports from these areas would be meeting their home market emissions standards or does Australia receive equipment made to an inferior specification? An additional benefit associated with Euro 5 other than simply emissions output is that it introduces an enhanced durability requirement for emissions management systems and associated components. We understand that generally the fuel available in Australia is in some instances not refined to the same specification as comparable overseas markets; it contains higher levels of contaminates. In the past we have heard of instances where some modem engines were not Made available in the Australian market due do the difficulty with Australian fuels. Also that engines have needed to be detuned to compensate for the different quality of fuel. We would like to see this anomaly removed via the adoption of a clean fuels initiative. v. Importation of used vehicles The Productivity Commission Inquiry Report NO 70, 31st March 2014 recommended "reducing impediments to importing second-hand vehicles". AFMA agrees with this view and would like to see the automatic approval of import of used vehicles, of older than four years of age, that have been built to the UNECE, or equivalent, specifications. vi. Importation of new vehicles AFMA would also like to see the unhindered import of parallel and personal imports on the proviso that they were built to the UNECE, or equivalent, specifications. Such a move would exacerbate an already expected fall on both new and used vehicle pricing in a post local manufacturing marketplace. vii. Import Tariffs Although import tariffs are not in the terms of reference they do play a role in pricing. While some would argue that the real level of tariff is in the region of only 3% it is still a tax and an additional cost on the product. With free trade agreements in place, or in discussion, with the majority of countries with advanced manufacturing it would seem prudent to remove the tariff. viii. Luxury Car Tax (LCT) Our understanding of the LCT was a measure to assist local manufactured large, luxury, passenger vehicles. The real outcome of this measure has been to increase the cost to the consumer of a range of mid market vehicles in their home markets into the Australian luxury market sector simply on an artificially imposed higher cost basis. AfMA has for some time advocated its removal; a view also supported by the Productivity Committee review. ix. Lemon Laws We believe that it is time for a strengthening of consumer rights in the market place. Where there are serious problems with a vehicle it appears to be extremely difficult to get a vehicle replaced; it is time for the introduction of what is termed 'lemon laws'. In the context of this submission, AFMA defines a 'Lemon' as a vehicle that fails to meet a reasonable service level. It is the Association's contention that a consumer protection system covering the purchase of a product should be based on availability for use, usability and functionality and not on how many times it needs or can be repaired. These types of laws already exist in the USA and Canadian marketplace and there is no valid reason why Australian consumers should not be afforded similar protection. What constitutes a lemon we suggest should be one (1) repair for a safety defect. For instance if the problem involves a defect/failure associated with the likelihood of death or serious bodily injury (such as brake failure, a steering wheel that locks or complete electrical failure) the Lemon Law should apply if the problem is not corrected at the first attempt. In the case of non life threatening deficiencies, the Association believes three (3) repair attempts for any combination of defects is an appropriate response. It is in the hands of the Federal Government to address these issues in the most expedient time scale for the benefit of the consumer. AFMA thanks the Committee for the opportunity to share its thoughts and concerns on this important subject. Yours sincerely Marja Thompson Executive Director Consultation Paper on the Motor Vehicle Standards Act 1989 Response to specific questions Questions- Extract for use in Submission Responses Sept 2014 5. Is there a problem? Question 5.1 Have the problems with the current situation been reflected accurately and are there other problems that should be addressed? AJMA's response The Executive Summary in the Consultation Paper on the Motor Vehicle Standards Act 1989 declares that: "It is also necessary to consider whether the present legislative framework reflects 'best practice' in meeting the Act's objectives" and "The views will also assist in determining the regulatory framework's impact on competition in the supply of vehicles to the automotive sector". It is the Association’s view that, as the discussion paper identifies, there have been improvements in safety, emissions and air quality. However, these improvements should not be viewed in isolation. Under any comparison with comparable economies and markets Australia lags considerably behind other comparable markets. Such an approach as above, i.e. we are better than we used to be without reference to where comparable markets are has too often been used to justify a lesser outcome; repeatedly to the detriment of the consumer. There are enough studies available that confirm the Australian market to be inferior in many ways to comparable jurisdictions such as Europe and the USA. It should be remembered that design rules are intended to provide a minimum requirement not a state of art outcome. The ADR uniqueness needs to be addressed. Whether right or wrong we judge that consumers expect Government to automatically look after their safety and consumer interests. Such blind faith has its limitations in that there is a common perception that if a product is approved for sale then it is as safe as it can be. By allowing organisation freedom to determine what equipment to either include, or more importantly exclude, could result in activity being driven by an economic imperative, rather than safety outcomes. There should be flexibility in any system as on occasion Government is required to act when research clearly demonstrates that a particular equipment inclusion provides a greater safety outcome. In such instances a responsibility falls to Government to set a benchmark, a required rather than a minimum standard, in addition to ensuring a level playing field for the inclusion of safety systems. Import tariffs and the Luxury Car Tax (LCT) are an anomaly that elevates what should be midrange vehicle models to luxury vehicle status in Australia, purely on a cost base. Australian emissions standards lag behind comparable markets. Adoption of class leading emission standards should be accelerated. Currently fuel supplied to the Australian marketplace is less refined than that in comparable markets and contains higher levels of contaminates. This should be addressed. Harmonisation of (A)NCAP test and rating procedures should take place. 7. What policy options could be considered? Question 7-1 What are the benefits or costs of refining the risk based approach to the regulation of vehicles entering the Australia market? AJMA’s response If new vehicles are compliant with international standards (UNECE, USA, Japan etc) they should automatically receive import approval. The same should apply to used (second hand) vehicles but with an age proviso determined by government i.e. no older than four years. This would leave two categories of vehicles to be addressed: vintage and modified vehicles that due to their particular condition, age or level/extent of modification could require attention before import is allowed or denied. Question 7-2 What arguments support little or no change to the legislation? AFMA’s response There is no rationale for retaining the status quo. The Australian market is substantially Lagging and inferior in a multiple of ways than comparable overseas markets. This is an outcome of an inadequate system (the current system) which was driven more by particular social events rather than economic rationale.
Does a case still exist for Australian Government intervention in vehicle standards? AFMA’s response Yes. Design rules are intended to provide a minimum requirement not a state of art outcome. On occasion Government should act when research clearly demonstrates that a particular equipment inclusion provides a greater positive outcome i.e. electronic stability control, curtain/side airbags. Question 7-4 Could the Australian Vehicle Standards Rules be used as an alternative to the national standards? If so, what would be the necessary approach to minimise the regulatory burden, industry compliance costs and inconsistent application across states and territories? AFMA’s response As most new vehicles will be imported and made to an internationally recognised specification the only need is to specify the acceptable standard (international). It is somewhat frustrating to observe from our experience in the field of Occupational Health and Safety (OH&S) that it is our expectation that various State entities will want to go their own way. Question 7-5 Are there non-regulatory ways of achieving the same policy objectives of road safety, environment, security, and adequate consumer choice? AFMA’s response The Association would suggest not. Product and service suppliers would normally do what is asked of them by the relevant regulations. It is not often that a supplier would volunteer to exceed the norm. Many are driven by a commercial motivation to continue to sell a lesser product. For example even though Victoria had the requirement for Electronic Stability Control (ESC) models without ESC were being imported and sold in states such as Western Australia. An unregulated market would offer greater opportunity for such actions to continue. Question 7-6 What other legislative 'fixes' to the Act do you consider necessary? AFMA’s response Please refer to our detailed submission. Question 7-7 What examples of duplication between the Act and other key pieces of legislation could potentially be removed? AfMA 's response The Association is not sufficiently knowledgeable in all relevant legislation applicable to the automotive sector to offer constructive comment. Question 7-8 In what areas do you consider the Act’s compliance processes and enforcement powers could be better targeted to the risks? And what additional or alternative enforcement or compliance activities would you consider as effective and efficient? AfMA 's response The Association is not sufficiently knowledgeable in all relevant enforcement powers applicable to the automotive sector to offer useful comment. Question 7-9 Are the provisions in the Regulatory Powers (Standard Provisions) Act 2014 a suitable alternative? Or are there issues that are unique to the industry that will not be addressed through the use of provisions contained in this Act? AFMA’s response The Association is not qualified to comment on this issue. What regulatory services under the Act could be delivered through private sector or other organisations? AFMA’s response AFMA is not sure as to what context the question is framed. If the suggestion is that any system should be voluntary or self regulating then the Association would have great concern as almost without exception self regulation have inherent defects. However in the instance of an organisation such as Standards Australia it is possible for private organisations to be tasked with basic administration of a system. As we understand the Standards Australia organisation administers the availability of standards rather than compiling any particular standard. In addition administration is its primary function and has limited opportunity for economic conflicts. We note that a number of years ago Australia had its own quality standards; the AS 3900/1/2/3; these basically mirrored the International 9000 Standards. After a short time the AS 3900 series were dropped and the accepted international standard 9000 series was adopted. Question 7-11 What regulatory mechanisms should be in place to ensure that motor vehicles are effectively recalled when safety concerns arise? AFMA’s response Manufacturers should be legally required to advise the authorities within a particular timeframe after a defect has been identified. Heavy penalties should be levied for any compliance failure. In addition manufacturers should be required to rectify the issue regardless of vehicle age or how many times a vehicle has changed hands. Such an approach we believe mirrors the current USA system for vehicle safety defects. Also see AFMA’s comments regarding ‘Lemon Laws’ at (Section C ix) Question 7-12 What costs and benefits do you see from providing a legislated role for the vehicle safety standards regulator in vehicle safety recalls? AFMA’s response The Association is of the view that there is too much evidence that self regulation has its problems; Mitsubishi and General Motors are two recent examples of the failure of self regulation. Responsibility to oversee and ensure safety recalls take place, should be the role of an ombudsman-type role and not left to the industry itself. Such an approach we believe mirrors the current USA system for vehicle safety defects. Question 7-13 Are there any specific local requirements for light vehicles that would prevent full harmonisation with UN regulations for light vehicles? AFMA 's response The Association is not aware of any valid specific rationale that makes our market different. We note that the term "need to meet Australian conditions" is often used in the context of why something available overseas cannot be included for the Australian market. AFMA has yet to be convinced of the Australian uniqueness that makes us so different than elsewhere. How much business compliance cost savings could be made through the above options to harmonise Australian standards with the UN Regulations and the acceptance of evidence of compliance with those standards?
Would there be any increased cost to consumers for a vehicle that complies with UN Regulations not required for Australian conditions (such as cold start) as opposed to the current hybrid compliance arrangement? AFMA's response Please refer to our response to 7-13 above. Question 7-16 Is there benefit in providing for the approval of modules of design/assembly of a vehicle? How could this be done to ensure the certification is valid for a range of later added componentry and bodies? AfMA'sresponse We would pose the question as to why this would be necessary. If a vehicle meets the UNECE requirements there should be no need for any additional approval process.
What risks would a regulatory framework need to address if barriers were reduced on vehicle imports? AfMA 's response Other than confirmation that the vehicle met the UNECE or equivalent specifications at its time of manufacture and that the vehicle includes the minimum safety systems required. Also if an import was no older than the defined age then there should be no need for additional regulations. Question 7-18 What impact would second-hand vehicle imports and personal imports of new vehicles have on the automotive sector in the short, medium and long term? AfMA's response The Association's expectation is that there will be a substantial fall in both the new vehicle and residual (used) vehicle pricing. However, this needs to be seen in context of overall price levels. As previously stated when compared to comparable markets the Australian marketplace has elevated pricing. In the case of some luxury vehicles this difference is considerable. When the closure of local manufacturing was announced the Association looked to the only other mature market where such an event had previously taken place: New Zeeland. We requested a view/opinion from one of our members who was in a position to observe 'Beware the residual values' by Cathy Parker, owner of Adrenalin Publishing Ltd and Publisher of New Zealand Company Vehicle Magazine. "The closure of Australian vehicle manufacturing may well have some upsides in terms of vehicle choice but the New Zealand experience indicates potential significant downside risks for existing vehicle values due to the likely removal of tariff and import protections. New Zealand essentially went down this path in the late 1980’s to mid 1990's as the protective tariffs and sales taxes were reduced and the market opened up to both fully built up new cars and also to "used imports"- primarily ex Japan. When the restrictions first came off in 1987 used imports surged from around 2,000 a year to 60,000 a year. With the final demise of local assembly in 1997-98 this further grew to over 100,000 units peaking at over 170,000 a year in 2003 (and was 105,000 in 2013)- this compares to new vehicle sales of between 70,000 and 113,00 (2013) over this period. The used imports initially drove resale values down - whilst they were typically 5+ years old vs. 3-4 years old for ex fleet vehicles, they reduced the whole used price structure. This was compounded by the fact that the NZ New vehicles in the 1980's had fairly basic specifications - a typical fleet model would have no aircon, manual steering and manual windows, whilst all the imports had power windows, power steering and air conditioning making local vehicles harder to sell. The industry quickly up-specified newer models but this obviously took 3-4 years to flow through to resales. In the same period the tariffs and sales tax was progressively reduced and once the last local assembly plant closed in 1998 (ahead of the original schedule) the tariffs went to zero. This reduction was reflected in the new vehicle price and consequently in the resale of existing vehicles. At the extreme end a Toyota Prado top spec went from around $100,000 new price to around $60,000 almost overnight so you can guess what happened to resale. With new car prices falling around 30% and the huge increase in used car availability residuals quickly fell and instead of resale profits of $1000-$2000 losses of $3,000- $4,000 were being made on typical fleet vehicles and higher on luxury models- when you have a fleet of thousands this equated to serious money.
Anticipated resale changes both in terms of lessors for their new business and for fleets in terms of mitigation (leasing was certainly a winner for fleets during this period in New Zealand as the lessors suffered the pain as the changes came so thick and fast they could not keep up in their residual predictions. I will certainly watch with interest as the next few years unfold". Question 7-19 Could constraints around a vehicle’s age and country of origin effectively manage the safety, environmental and theft risk to the community? AFMA’s response Ensuring the appropriate Key Performance Indicator (KPI) is paramount. In this instance we would see the standard to which the vehicle was constructed rather than the construction location as the important factor. A mechanism is required to ensure that vehicles are not de-specified, particularly in safety features and emissions standards. Question 7-20 How can standards be used to affect the average age of the vehicle fleet and the distribution of the age profile? AfMA 's response One approach used in the USA and some European countries is that vehicles are required to demonstrate compliance to a particular standard on a yearly basis, i.e. in the USA vehicles over a certain age are required to confirm that the environmental control system is fully functional. In the UK vehicles over a certain age are required to have a check (Ministry of Transport or MOT) of some fundamental systems i.e. brake lines, level of corrosion and tyre wear etc. We are aware that there is great resistance to such systems from several organisations. Question 7-21 Could consumer protection for personally imported new vehicles be left to consumer laws, and why/why not? AJMA 's response If a vehicle is purchased overseas through a franchised dealer and is within its warranty period then responsibility should be with the manufacturer. For vehicles outside warranty periods but purchased via a franchised dealer then a 'Lemon Law' type of arrangement would protect the consumer. In the case of personal imports it is possible to purchase breakdown cover via a number of organisations. Question 7-22 What impact would an increase in second hand imports and personally imported new cars have on the insurance industry? AfMA 's response It should provide a new business opportunity for the insurance industry. There are already organisations operating in this space. Question 7-23 How could the Government facilitate vehicle safety recalls for vehicles not imported by manufacturers? AfMA 's response Safety recalls are usually initiated from a design or manufacturing fault. In such cases it should be the manufacturer who repairs such problems via their franchised network. Question 7-24 Do you agree that the concessional options could be grouped into risk categories to allow the possible consolidation of the scheme? If so, do you agree with the model proposed in this review? AfMA 's response The Association is not qualified to respond to this question. Question 7-25 In the event that barriers to the importation of quality second-hand vehicles are reduced, would there still be a need for the Register of Specialist and Enthusiast Vehicles? AfMA 's response Yes, as it is these types of vehicle that would be outside the automatic import approval criteria i.e. no older than four years or modified from its original manufacture. Question 7-26 If the Register is still required, how could it be improved to increase standards and reduce regulatory burden? AfMA 's response The Association is not qualified to respond to this question. Question 7-27 Could the regulation of the Registered Automotive Workshops and the New Low Volume Manufacturers be combined under a new legislative framework (as illustrated in Figure 3)?
The Association is not qualified to respond to this question.
What are the advantages and disadvantages of such a consolidation approach? AfMA's response The Association is not qualified to respond to this question. 8. Costs and benefits Question 8-1 Do you have any comment on the compliance cost assumptions? AfMA 's response For new vehicles: As any changes should be simply advancing the Australian market up to the current practice already in place in comparable advanced markets, rather than a cost impost it is probable that there will be a reduction in cost. The same should apply for the importation of used vehicles that comply with the relevant UNECE regulations at the time of their manufacture. Question 8-2 Are the costs of compliance reasonable when considered alongside the safety and environmental outcomes being delivered? AJMA 's response Again as any changes in connection with new vehicles should be simply advancing the Australian market up to the current practice already in place in comparable advanced markets. There is no reason why safety should be compromised and in connection with environmental outcomes as Australia is only at Euro 4 then there will be an emissions improvement. The same should apply for the importation of used vehicles that comply with the relevant UNECE regulations and emissions standards at the time of their manufacture. 9. Implementation Question 9-1 What transitional arrangements, including length of notice period, should be put in place to assist businesses to adjust to potential changes in the regulatory framework? AFMA 's response The reality is that any likely changes, even wholesale changes, will be simply advancing the Australian market up to the current practice already in place in comparable advanced markets. Therefore in this context notice periods are nothing more than a period that allows inferior product to be sold to the Australian consumer. Directory: vehicles -> mv standards act -> files vehicles -> Epa vehicle class vehicles -> 2016 chevrolet tahoe vehicle highlights vehicles -> Insurance companies authorized to do business in the state of new jersey and their code numbers vehicles -> 2015 chevrolet corvette stingray new for 2015 vehicles -> Recall of vehicles in Australia fitted with Takata airbags Report on progress and status of the recalls files -> Review of the vehicles -> Part I the solicitation Download 1.88 Mb. Share with your friends:
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