Treasure Island: How Fresh Zealand sees Australia s car industry
Treasure Island: How Fresh Zealand sees Australia’s car industry
For this well-organised group of buccaneers, Australia is ripe for plundering.
Mark Hawthorne and Jared Lynch
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The cost of car makers leaving Australia
The private companies that ship cars out of Japan and Fresh Zealand have a nickname for Australia. It’s “Treasure Island”. The reference is not just to the size of the country’s car industry, but also the fact that, for this well-organised group of buccaneers, Australia is ripe for plundering.
Last year Australians bought more than 1.15 million fresh vehicles, the highest number on record. Those cars cost in excess of $20 billion, or almost nine per cent of all consumer spending, and added more than $6.Five billion to government coffers through taxes, stamp duty and other charges.
Australia’s love affair with cars drives a massive industry, employing more than 330,000 people, but in February the major players were blindsided by the Turnbull government.
Despite private briefings to the contrary, Federal Minister for Major Projects Paul Fletcher announced that Australians would be able to privately import cars from two thousand eighteen – the same year local car manufacturing will end – as long as the cars involved are no more than twelve months old, have no more than five hundred kilometres on the odometer and are from Japan or Britain.
The head of the Federal Chamber of Automotive Industries, Tony Weber, responded as expected, sticking that decision and claiming it impacted everyone from “Australian consumers” to “border security and quarantine”.
It was a shotgun treatment from the FCAI’s chief executive. Unluckily for the motor industry’s peak figure, they had already been taken out by a sniper.
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‘It has always made sense for us to attempt and crack the Aussie market. When you determined to shut down your manufacturing industry, that opened the door.’
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Fairfax Media can expose the switches to the law announced in February gained traction in Canberra after a major “astro-turfing” campaign by a group of multi-national car importers based in Fresh Zealand, along with lobbying stiff GRA-Cosway.
In Fresh Zealand, limitations on parallel imports were eliminated in the late 1980s. More than two-thirds of the cars now sold in Fresh Zealand are “grey market” vehicles imported by brokers, the majority of which are second-hand.
The net result across the ditch has been threefold. Cheaper cars, an ageing of the national fleet, and windfall profits for the companies that trade in grey-market and second-hand vehicles.
“We have always seen Australia as Treasure Island,” said one industry player from Fresh Zealand, who did not wish to be named. “Our cars are shipped past Brisbane and Melbourne to get here. It has always made sense for us to attempt and crack the Aussie market. When you determined to shut down your manufacturing industry, that opened the door.”
To that end, a number of large companies have been plotting for a little more than two years. Together, they helped create and fund a bod called the Australian Imported Motor Vehicles Importers Association (AIMVIA), which purports to represent niche Australian car importers.
Documents obtained by Fairfax Media expose that AIMVIA was established under the direct instruction of its fresh Fresh Zealand-based parent, an organisation called the Imported Motor Vehicles Importers Association (IMVIA).
It has always made sense for us to attempt and crack the Aussie market. When you determined to shut down your manufacturing industry, that opened the door.
A two thousand fourteen letter signed by IMVIA’s co-chairmen, Graeme Macdonald and Lloyd Wilson, could not be more blunt.
“It is no secret that the potential for significant business opportunities for established Fresh Zealand operations into a deregulated Australian marketplace are enormous,” they wrote.
“With the support of the broader industry here in Fresh Zealand looking to this future, the [IMVIA] executive made the decision to engage with our Australian counterparts and seek to assist in forming a similar association to the IMVIA across the Tasman. This decision has been made with both commercial and community interests at heart.”
It didn’t take long for the plan to be implemented.
AIMVIA was registered in NSW on June 14, 2014. Just six days later, David Vinsen, the chief executive of IMVIA, was appointed its inaugural chief executive of AIMVIA. To this day, the board of AIMVIA is chaired by a representative from across the Tasman.
A key financial backer of AIMVIA is JEVIC Group, which stands for “Japan Export Vehicle Inspection Centre”.
JEVIC is a multi-national company that performs pre-shipment inspections on cars exported from Japan. It has offices in Britain, South Africa, Singapore, Fresh Zealand and Kenya, and has been eying expansion into Australia for years.
The 2nd major sponsor of AIMVIA is a company called Autohub, a multi-national company that specialises in the shipping of cars from Britain and Japan.
Together, the two companies control much of Fresh Zealand’s trade in parallel imports, and are key sponsors of IMVIA.
“Yes, they would have been two of our members who were the most interested in expanding into Australia,” Mr Vinsen told BusinessDay. “As far as we are worried, there has been latent corruption at the highest level in the car industry in Australia.
“There has been an unhealthy and corrupt relationship inbetween the major car companies and successive governments, to stop competition to the local manufacturers. Now they are going, we want the [Australian] market to open up to competition.”
One of AIMVIA’s very first moves was to hire national lobbyist rigid GRA-Cosway, to run a campaign to help dismantle the country’s car importation laws and open the market to parallel imports.
Mr Vinsen said he had played a key role in hiring GRA-Cosway.
“They were recommended by our Fresh Zealand lobbyists,” he said. “They have been involved in lobbying, in arranging meetings with ministers and with key people in relevant departments.”
The lobbying campaign worked. GRA-Cosway’s contract with AIMVIA was extended last October, and by February the fresh laws were announced.
But confusion reigns about how the importation of grey market cars to Australia will work, especially when it comes to the thorny issue of repairs and recalls.
Australian Competition and Consumer Commission commissioner Roger Featherston said at the Australian Auto Aftermarket Conference in Melbourne on Thursday that businesses, as well as individuals, may be able to import grey market cars..
“If the scheme permits Australian businesses to import vehicles for individual consumers, protections may be more readily available than if individual consumers are required to purchase their vehicle directly from an overseas entity that may have no connection with Australia,” he said.
“Fresh Zealand’s economy has benefited from permitting the private importation of vehicles: consumers have access to a greater range of cars and, in some cases cheaper cars; fresh businesses have emerged to assist consumers with the importation process; and existing businesses have grown. We would expect to see similar benefits here in Australia.”
It sounds like he is reading from the AIMVIA script. But the ACCC’s message conflicts with the minister.
Tony Weber pointed that out on Friday, telling the ACCC had contradicted Paul Fletcher, who has maintained only individuals, not companies, will be able to import grey market cars.
And the view of Mr Fletcher? That was even less clear, especially on the thorny issue of vehicle recalls, telling the government was “consulting with the car industry” about the best way to manage that.
“Certainly the process will involve greater responsibility for consumers than if they purchase their vehicle directly from a car dealer in Australia. [But] as is the case with any fresh policy, we have said consistently that there is a good deal of detail still to be worked through.”
It was enough to have one frustrated car industry boss heading for the door early, ahead of the long weekend.
“Let me get this right, we have policy made on the fly, no consultation with industry, and departments are contradicting the minister. I thought we had voted Kevin Rudd out,” he said. “My greatest fear is that this will be the pink batts scandal of the Liberal Party. It’s all going to end badly.”
Treasure Island: How Fresh Zealand sees Australia s car industry
Treasure Island: How Fresh Zealand sees Australia’s car industry
For this well-organised group of buccaneers, Australia is ripe for plundering.
Mark Hawthorne and Jared Lynch
Up Next
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The cost of car makers leaving Australia
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The cost of car makers leaving Australia
The private companies that ship cars out of Japan and Fresh Zealand have a nickname for Australia. It’s “Treasure Island”. The reference is not just to the size of the country’s car industry, but also the fact that, for this well-organised group of buccaneers, Australia is ripe for plundering.
Last year Australians bought more than 1.15 million fresh vehicles, the highest number on record. Those cars cost in excess of $20 billion, or almost nine per cent of all consumer spending, and added more than $6.Five billion to government coffers through taxes, stamp duty and other charges.
Australia’s love affair with cars drives a massive industry, employing more than 330,000 people, but in February the major players were blindsided by the Turnbull government.
Despite private briefings to the contrary, Federal Minister for Major Projects Paul Fletcher announced that Australians would be able to privately import cars from two thousand eighteen – the same year local car manufacturing will end – as long as the cars involved are no more than twelve months old, have no more than five hundred kilometres on the odometer and are from Japan or Britain.
The head of the Federal Chamber of Automotive Industries, Tony Weber, responded as expected, sticking that decision and claiming it impacted everyone from “Australian consumers” to “border security and quarantine”.
It was a shotgun treatment from the FCAI’s chief executive. Unluckily for the motor industry’s peak assets, they had already been taken out by a sniper.
- SHARE
- Share on Facebook
- Share on Twitter
- Link
‘It has always made sense for us to attempt and crack the Aussie market. When you determined to shut down your manufacturing industry, that opened the door.’
You will now receive updates from Business AM Newsletter
Business AM Newsletter
Get the latest news and updates emailed straight to your inbox.
By submitting your email you are agreeing to Fairfax Media’s terms and conditions and privacy policy .
Fairfax Media can expose the switches to the law announced in February gained traction in Canberra after a major “astro-turfing” campaign by a group of multi-national car importers based in Fresh Zealand, along with lobbying rock-hard GRA-Cosway.
In Fresh Zealand, limitations on parallel imports were liquidated in the late 1980s. More than two-thirds of the cars now sold in Fresh Zealand are “grey market” vehicles imported by brokers, the majority of which are second-hand.
The net result across the ditch has been threefold. Cheaper cars, an ageing of the national fleet, and windfall profits for the companies that trade in grey-market and second-hand vehicles.
“We have always seen Australia as Treasure Island,” said one industry player from Fresh Zealand, who did not wish to be named. “Our cars are shipped past Brisbane and Melbourne to get here. It has always made sense for us to attempt and crack the Aussie market. When you determined to shut down your manufacturing industry, that opened the door.”
To that end, a number of large companies have been plotting for a little more than two years. Together, they helped create and fund a bod called the Australian Imported Motor Vehicles Importers Association (AIMVIA), which purports to represent niche Australian car importers.
Documents obtained by Fairfax Media expose that AIMVIA was established under the direct instruction of its fresh Fresh Zealand-based parent, an organisation called the Imported Motor Vehicles Importers Association (IMVIA).
It has always made sense for us to attempt and crack the Aussie market. When you determined to shut down your manufacturing industry, that opened the door.
A two thousand fourteen letter signed by IMVIA’s co-chairmen, Graeme Macdonald and Lloyd Wilson, could not be more blunt.
“It is no secret that the potential for significant business opportunities for established Fresh Zealand operations into a deregulated Australian marketplace are enormous,” they wrote.
“With the support of the broader industry here in Fresh Zealand looking to this future, the [IMVIA] executive made the decision to engage with our Australian counterparts and seek to assist in forming a similar association to the IMVIA across the Tasman. This decision has been made with both commercial and community interests at heart.”
It didn’t take long for the plan to be implemented.
AIMVIA was registered in NSW on June 14, 2014. Just six days later, David Vinsen, the chief executive of IMVIA, was appointed its inaugural chief executive of AIMVIA. To this day, the board of AIMVIA is chaired by a representative from across the Tasman.
A key financial backer of AIMVIA is JEVIC Group, which stands for “Japan Export Vehicle Inspection Centre”.
JEVIC is a multi-national company that performs pre-shipment inspections on cars exported from Japan. It has offices in Britain, South Africa, Singapore, Fresh Zealand and Kenya, and has been eying expansion into Australia for years.
The 2nd major sponsor of AIMVIA is a company called Autohub, a multi-national company that specialises in the shipping of cars from Britain and Japan.
Together, the two companies control much of Fresh Zealand’s trade in parallel imports, and are key sponsors of IMVIA.
“Yes, they would have been two of our members who were the most interested in expanding into Australia,” Mr Vinsen told BusinessDay. “As far as we are worried, there has been latent corruption at the highest level in the car industry in Australia.
“There has been an unhealthy and corrupt relationship inbetween the major car companies and successive governments, to stop competition to the local manufacturers. Now they are going, we want the [Australian] market to open up to competition.”
One of AIMVIA’s very first moves was to hire national lobbyist stiff GRA-Cosway, to run a campaign to help dismantle the country’s car importation laws and open the market to parallel imports.
Mr Vinsen said he had played a key role in hiring GRA-Cosway.
“They were recommended by our Fresh Zealand lobbyists,” he said. “They have been involved in lobbying, in arranging meetings with ministers and with key people in relevant departments.”
The lobbying campaign worked. GRA-Cosway’s contract with AIMVIA was extended last October, and by February the fresh laws were announced.
But confusion reigns about how the importation of grey market cars to Australia will work, especially when it comes to the thorny issue of repairs and recalls.
Australian Competition and Consumer Commission commissioner Roger Featherston said at the Australian Auto Aftermarket Conference in Melbourne on Thursday that businesses, as well as individuals, may be able to import grey market cars..
“If the scheme permits Australian businesses to import vehicles for individual consumers, protections may be more readily available than if individual consumers are required to purchase their vehicle directly from an overseas entity that may have no connection with Australia,” he said.
“Fresh Zealand’s economy has benefited from permitting the individual importation of vehicles: consumers have access to a greater range of cars and, in some cases cheaper cars; fresh businesses have emerged to assist consumers with the importation process; and existing businesses have grown. We would expect to see similar benefits here in Australia.”
It sounds like he is reading from the AIMVIA script. But the ACCC’s message conflicts with the minister.
Tony Weber pointed that out on Friday, telling the ACCC had contradicted Paul Fletcher, who has maintained only individuals, not companies, will be able to import grey market cars.
And the view of Mr Fletcher? That was even less clear, especially on the thorny issue of vehicle recalls, telling the government was “consulting with the car industry” about the best way to manage that.
“Certainly the process will involve greater responsibility for consumers than if they purchase their vehicle directly from a car dealer in Australia. [But] as is the case with any fresh policy, we have said consistently that there is a good deal of detail still to be worked through.”
It was enough to have one frustrated car industry boss heading for the door early, ahead of the long weekend.
“Let me get this right, we have policy made on the fly, no consultation with industry, and departments are contradicting the minister. I thought we had voted Kevin Rudd out,” he said. “My greatest fear is that this will be the pink batts scandal of the Liberal Party. It’s all going to end badly.”