Why new import rules won't lead to cheaper cars in Australia

The Federal Government wants to herald the arrival of cheaper cars once local manufacturing ends in late 2017, but it hasn’t done it’s sums, say experts.

The Federal Government will announce on Wednesday radical changes that would allow private buyers to import brand new cars -- in the belief they will be cheaper.

But the car industry is expected to fight the proposal on the grounds it won’t lead to more affordable cars for the masses -- and could risk the jobs of dealership staff employed across the country.

The industry also warns the changes would lead to warranty and service complaints and will only benefit the super-rich who can afford luxury models and exotic sports-cars.

Independent comparisons by News Corp Australia show the cost of Australia’s most popular cars such as the Toyota Corolla and Mazda3 --both of which start at about $22,000 and are the same price they were in Australia 20 years ago -- are on par with the US and cheaper than Europe once taxes, currency exchange rates, and differences in standard equipment are calculated.

But a significant price gap emerges on vehicles price above Australia’s $63,184 Luxury Car Tax threshold, which adds 33 per cent to the cost of vehicles in excess of this amount.

Changes would lead to warranty and service complaints and will only benefit the super-rich who can afford luxury models and exotic sports-cars

For example, a Porsche 911 sports-car costs $89,400 in the US and $217,000 in Australia.

But once taxes, exchange rates and LCT are taken into account, there is about a $20,000 difference in price, which Porsche says can be attributed to extra equipment that is standard in Australia but optional overseas.

The office for Paul Fletcher, the federal minister for major projects and infrastructure, which will oversee the proposed changes, is expected to make the announcement today, government sources said.

The Federal Chamber of Automotive Industries, the car lobby group, did not respond to a request for comment by the time this article was published.

Spokesman for Porsche Cars Australia, Paul Ellis, told News Corp Australia: “There’s been insufficient consultation with the industry. Our understanding from the highest levels of office inside the government is that the government and senior ministers had acknowledged our concerns, and was not pursuing any changes.”

Mr Ellis warned: “Manufacturers will have no obligation to provide warranty on (privately imported) vehicles that don’t meet Australian Design Rules, and we will have no obligation to service and maintain those cars.”

Would you privately import a vehicle from the U.K or Japan? Let us know in the comments below.