SUBMISSION TO THE SENATE ENQUIRY

A POSITIVE PLAN FOR THE MOTOR INDUSTRY

This policy initiative presents a positive plan for rebuilding the motor vehicle industry industry via removal of the present strangling red tape leading to growth in small-medium business training and employment, with significant associated administrative savings in the Department. The Industry will grow naturally, be internationally competitive, be able to grow exports and no longer rely on government handouts.

This plan involves consideration of both the Productivity Commission Report and the Motor Vehicle Standards Act and both matters are reviewed herein.

Robert Bryden

October 2015

Background

This policy recommendation arises during a time of upheaval in the Australian motor vehicle industry. Despite years of heavy tax payer support, the three local manufacturers are withdrawing from large scale manufacturing in for a variety of factors including the expense of local manufacturing, an unfavourable AUD, a small market and in the case of and Ford, their building models [ large sedans ] no longer sought in the marketplace.

Other hidden problems include the very heavy expense of complying with unnecessary legislative burdens, principally the localised Australian Design Rules which are interpreted in a ‘’ Can’t Do’’ manner by the Department and the hidden trade barriers to Australian exports imposed by other countries.

There is a very simple solution and one with which great success has been achieved in the UK where a small-medium business based high value specialist motor vehicle building and aftermarket component industry has been developed, with tens of thousands trained and employed in that industry.

It is recommended this UK model be followed, a simple model with minimal red tape and Regulations framed to encourage rather than to prevent this model emerging here. The writer and the research

The writers’ background is in Law, having run a large and successful legal practise over some 30 years. A family background in the motor industry in the UK has however provided a great grounding in the industry, with the family motor business started in 1910 before being sold in the late 1990’s.

More recently the writer has been involved in Road Safety Policy development in conjunction with the NSW Government and also as an investor in the motor vehicle industry where the failings in policy and red tape obstructions to growth in the industry have become abundantly clear. I have experience on Corporate and Government Boards and was for some ten years an elected representative on my Professional Board.

This policy development involved significant research including visits to the UK to meet with low volume specialist vehicle manufacturers and aftermarket component manufacturers, inspection of a leading Formula 1 Team facilities, a visit to Germany to inspect similar facilities, interviews with numerous business owners in the space locally as well as affected staff, interviews with a critical witness to the Productivity Commission, review of the Submissions to that body, thorough review of the Report, thorough review of the Motor Vehicle Standards Act [ADRs], review of the terms of enquiry into that Act and interviews with parties affected by that Act as well as personal experience dealing with the Regulator of the ADRs. It also involved acquiring knowledge of the history and functioning of the NZ scheme reported on by the Commission as well as the European regulatory scheme, the Japanese and American schemes and the unique and highly successful approach taken in the UK that has encouraged development of the world leading specialist and enthusiast vehicle and aftermarket component industry.

An earlier announcement by Minister McFarlane, that the Productivity Commission report and the enquiry into the Motor Vehicle Standards Act must be considered together, is fully supported and the correct approach. The two are inseparable.

The policy proposed is based on common-sense and the already proven and highly successful UK model. It relies on significant reduction of local red tape to build an independent self-sufficient industry, not on tax payer handouts to multinational corporations to support overpriced labour rates, as under the previous model.

A very positive political message can emerge through adoption of these proposals with the price of cars being reduced, encouragement of growth and training in what is otherwise a dying industry, significant reduction of administrative costs in the Department along with the attraction of increasing the variety of specialist cars available to enthusiasts, increasing and allowing development of export markets in both fully built specialist and enthusiast motor vehicles and also aftermarket components, areas where Australia can compete on the world stage through innovation and engineering rather than trying to compete on labour and other costs bases. An eyes wide open review of the NZ Scheme

The recent Productivity Commission report highlights the NZ Scheme. It allows virtually unrestricted imports of ‘’ used cars’’. The report did not however deal with the significant downsides discovered during the research process for this paper, which involved close liaison with a leading NZ witness to the Commission and others with experience in the NZ system.

The NZ experience is not all roses and skittles. A quote from the leading witness provided in my interview ‘’ it’s taken us 25 years to get it right ‘’.

The downsides discovered in investigating this scheme were numerous and ran against the aims of protecting the consumer and reducing red tape and administrative costs. The adverse consequences and risks are significant and were not adequately dealt with by the Commission

1] The administration costs of the NZ scheme are significant

A whole Government department is dedicated to the Regulation of used imports which are effectively ‘dumped’ into New Zealand every year. Further, the Regulator there has to appoint a number of private agencies to do the secondary checking work, creating two levels of administration. This is a significant hidden cost to the Government and consumer.

2] The unscrupulous operator

As seen in the ‘Pink Batts’ disaster in Australia, sudden massive change in import regulation of used cars from other countries will lead to fly by nighters and backyarders entering the industry and acting with dishonesty. Indeed, an interview with a salesman at an importer of used Japanese cars under the present more limited and well scrutinised scheme led to the admission ‘’ my boss makes us wind back the speedos ‘’ .

If this happens under the present heavily regulated import scheme at a Licenced Motor Dealer on Parramatta Road, what will happen in a market flooded by used imported cars? This is behind the NZ expert referred to above saying ‘’ it’s taken us 25 years to get it right’’.

3] When a ‘used car ‘isn’t a ‘used car’

What defines a ‘used car? In NZ, backyarders without overhead are able to import ‘used’ cars which are effectively ‘new’. Another example provided during interview involved a new BMW with delivery kilometres recorded [ approx. 500 ] being imported into NZ as a new vehicle then undercutting the local market price by tens of thousands of dollars. The consumer is then left with a car not covered by manufacturer’s warranty [unless they repatriate the car to its point of origin in Europe, Asia or the Middle East], no access to software updates or recalls [unless of course they repatriate the car to its point of origin in Asia, the Middle East or Europe]

4] New car prices in NZ are significantly higher model for model, than in Australia

The NZ scheme has done nothing to reduce the price of new cars. In fact it has caused them to increase. As new car volumes reduced due to the dumping of used cars into the marketplace, these reduced new car volumes has led to price increases for new vehicles as importers and dealers struggle to make a return from a much reduced volume whilst still having to provide high standard showroom and workshop facilities, technical expertise and training to keep up with technological advances, apprentice training, warranties and spare parts availability.

The NZ grey import scheme also affects Road Safety in a negative way and insidious way. The price effect described above leads to consumers being less able to purchase a new car and to purchase of dumped used imports with a consequent aging of the vehicle fleet. As new cars have greatly evolved in safety terms, an aged vehicle fleet reduces availability of the latest safety developments and causes significant damage to fleet road safety. This is well known in road safety circles.

This leads to the following observations overlooked by the Commission

5] The major ‘type approval’ importers are good for the Australian economy

a] The Commission overlooked the huge investment made by current type approval importers / new car dealers in their premises. Typically, sums of many millions if not tens of millions are spent by major motor dealers on their premises, In line with requirements made by the Manufacturer. This investment brings significant benefits to the economy, providing jobs throughout the building industry. These investments are continual with upgrades being required over time.

If a NZ scheme were introduced here, these large investments in building, renovation and repair would cease as dealers were threatened by backyarders with no overhead or need for premises.

b] The large type approval authorised dealerships provide the most fertile training ground for Apprentices in the automotive field. The back yard importers of ‘used’ vehicles that would pop up if a NZ style scheme were introduced do not. Again, this significant but hidden benefit of the present system has not been properly identified by the Commission. The only significant work undertaken under this scheme, aside from Departmental paperwork, relates to low value, low skilled inspections of vehicles before resale.

c] The large importers presently have to provide reliable manufacturer backed warranties on their products and guaranteed supply of spare parts for a 10 year period

These points are a significant consumer protection and are lost as backyarders import older cars and new cars posing as used. The importing of a used model not otherwise supported locally leads to spare part problems for consumers.

The hidden but significant economic benefits as to employment and training under the present Type Approval system in Australia must be taken into account when evaluating the Commission’s report.

There are numerous other areas of benefit of retaining the type approval import system in the Australian market including consumer protection via the existing import licencing scheme with its factory backed warranty protection that currently exists and would be undermined by the back yard operators emerging under an NZ scheme.

Matters for action arising from the Productivity Commission report

The report highlighted two areas of reform that will aid the automotive industry redevelop and for consumers to access lower priced vehicles.

Firstly, a strong recommendation was made to remove the 5% import duty. This is a logical step given the local large scale manufacturers will be ceasing operations here and no longer need the protection.

Secondly, a strong recommendation was made to abolish the ‘luxury car tax’. This move will also result in much lower prices for consumers. There is no longer need to protect the local manufacturers and a significant number of normal family cars now attract that tax as the indexation has not kept up with price increases. The increase in sales that will follow removal of LCT and import duty will actually increase tax flows to Government. The position of the Motor Vehicle Packaging industry will need to be taken into account as the Residual Value on the fairly small number of expensive cars under pack will be challenged.

Both of these reforms will significantly aid the third proposal by the Commission, that is, liaise with our trade partners to ensure they remove any hidden trade barriers to export of our goods and services and in particular our aftermarket automotive components and future specialist vehicles built here. There has been criticism by our trade partners of these two taxes operating as trade barriers and their removal will allow us to negotiate open trade with them, coming to the table with ‘clean hands’

Rebuilding The Motor Industry Through Innovation, Based on The

Successful UK Model

This is the key to rejuvenating the industry, reducing compliance costs and allowing significant budgetary savings.

There are two issues to consider, firstly relating to the mainstream market and secondly and most importantly for the development of an Australian specialist industry, the UK approach towards the specialist market.

The Act [ Australian Design Rules – ADRs ] are an anachronism largely operating in recent times as a trade barrier, as a significant barrier to growth in the specialist and enthusiast vehicle industry, a large unnecessary cost imposition upon importers [ ultimately borne by consumers ] and a barrier to development of an aftermarket component industry. Millions are spent annually by importers in complying with the administrative process, not so much with the Rules themselves as they mimic the overseas Rules.

The ADRs are inordinately and unnecessarily complicated and almost seem designed and interpreted to PREVENT small/medium businesses developing products and consumers from being allowed to buy what they choose

The writer has had significant recent experience in this area and has compiled a number of case studies which are set out below. a] The mainstream market - Adoption of European, Japanese and American Design Rules and Self Certification

The ADRs in their present form largely mimic the European rules [ERs]. The overwhelming majority of the ADRS simply repeat what is set out in the ERs under local numbering.

However, the present system requires importers to take expensive administrative steps with the Department to prove compliance in each area despite the vehicles already being approved elsewhere as compliant. There are two European standards, EEC and ECE. Both should be applicable to compliance of vehicles in Australia. Only one is accepted in the current ADRs, which adds expense and delay to the process, ultimately to the cost and detriment of consumers.

The only significant difference relates to ADR 69 which requires a frontal impact into a solid barrier. This is not required under any other regulations and is a unique, expensive and unnecessary requirement, doing nothing for road safety.

One view of the current ADRs is that they have provided a fertile breeding ground for Departmental job growth.

The simple adoption of European, Japanese and American Design Rules as our standard greatly simplifies the import process in the mainstream market and does away with the need for a large Department requiring importers to provide all of the data already obtained and approved overseas, plus the unique and unnecessary ADR 69 crash test to be undertaken. Obviously Right Hand Drive would still be a requirement.

The simple question – does it comply with one of the three major overseas regimes. If the importer certifies ‘yes’, approval is granted.

All of the cars imported will comply with one or the other of the rules. There is no need at all for a unique set of Australian rules.

Self-Certification - The way forward

Given that all main stream vehicles will now be imported, observation of the overseas systems is very relevant. It is recommended that the following common-sense approach be adopted

Firstly, it is safe to rely on the large manufacturers / importers that will operate, as long as a NZ scheme is not adopted, are reliable and honest. Given that assumption, the model utilised in the USA becomes very relevant.

In the USA, a system of ‘’ self-certification ‘’operates. The manufacturer in the USA or the importer into the USA simply certifies to a small Regulator that the vehicle range concerned complies with the relevant design rules. The main function of the Regulator is to process the self-certification and occasionally audit certifications.

Significant savings in the Regulator can occur with this logical and proven approach and with no NZ scheme ‘back yard operators ‘involved, confidence can be placed upon the self- certification process of the importers.

The Opportunity to develop a specialist motor vehicle and aftermarket industry

The Departments present obstructive approach to ADRs has prevented the development of a specialist local industry

The approach is universally reported by those endeavouring to build locally or import specialist vehicles as a ‘’ can’t do ‘’ approach. It must change during the implementation of the recommended new ADR scheme. The Departments role should be to facilitate business growth, consumer choice and reduce cost, not the opposite as is the present case.

Case Study 1

Press reports of the Victorian based, Joss JP1 specialist vehicle building project are available online.

This project commenced in Victoria some years back as a plan to build a world class high performance car for sale on local and export markets. It relies upon local specialist engineering skills and locally built components.

Relevant quotes from a recent article are set out below. “Redesigned with an all new in-house designed DOHC alloy V8…. a bespoke transaxle, a chrome moly space frame, a carbon fibre body and a host of other high tech improvements and innovations’’

‘’Despite all of this engineering work, though , the Australian design Regulations are amongst the toughest and intractable in the world and would take more money and time to comply with than is reasonably available to a boutique auto maker’’

‘’ the company will apply for European Limited Run approval where- particularly in the UK – the JP1 could actually be registered and be registered to use on public roads and compete against other niche [ UK ] builders like Caparo, Caterham and Noble’’

The Regulators stance in this case has been ‘’ can’t do ‘’. These are very limited production run, highly specialised, low usage vehicles most often used on the track.

The employment of skilled Australian staff in this project has been lost due to the Department requiring them to take very very expensive steps to match the same requirements of a mass market billion dollar multinational manufacturer. Yet in the UK and Europe, such specialist vehicles are encouraged and are an important part of manufacturing industry. Local jobs are being prevented by poor legislation and an obstructive attitude.

Case Study 2

Project 211.

The 211 is a track / road car made by a medium sized UK engineering and vehicle builder. It is identical to the 111 model made by that company with the exception of different shape composite panels being bolted onto the very strong chassis structure.

Crash data is held for the 111 and it is in fact imported as fully compliant ‘type approved’ model. By unbolting the plastic panels, a full perimeter chassis is revealed with the fully approved crash structures front and rear. Both the Type 211 and Type 111 can be driven without panels attached and are inextinguishable with panels off.

The reason for the different Type number is simply that the Motor Sport Division of the manufacturer developed the different composite panels and wanted to apply their own Type number to it, for internal prestige reasons. It could have easily been designated as Type 111 in which case it could be imported without question.

Compliance was sought with the Regulator, relying on the crash data held in relation to the otherwise identical Type 111. Parts diagrams were submitted showing the crash structures to be identical, with the exception of the number 211 being marked on one diagram and the number 111 marked on the other. A letter was submitted to the Department from the Manufacturer’s representative proving that the crash structures were identical, which should have immediately led to the crash data being accepted.

A meeting was held with senior Department officials following refusal to accept the data and allow compliance. The Departments attitude was ‘’ we do not care, the part number is different and we will not accept it’’. The only alternative is destructive crash testing at a likely cost of over $100,000 plus the cost of 3 vehicles, making it a half a million dollar exercise in a projected market locally of 10 vehicles per annum.

This car actually complies with mainstream market crash tests. The Regulator took a ‘’ can’t do’’ stance by refusing to apply common-sense.

This is a limited volume track biased vehicle where specialist rules and exemptions should be adopted as has successfully occurred in the UK, to allow import and building of such limited use vehicles here.

This attitude is widely reported in the industry and has prevented import of this specialist and enthusiast vehicle. This has cost a number of highly skilled jobs that were to be created in the development of track based upgrades for local purchasers and more importantly the much larger export market for those products where Australia industry is very competitive.

Case Study 3

Project X Bow. Again, this is a current application and discretion is sought.

This is another European specialist vehicle industry success story, the type of story that the Joss referred to above could have been had the Regulations encouraged rather than prevented it’s compliance.

The X Bow is designed and built in Austria and is a specialist sports / track car based on an immensely strong carbon fibre tub utilising the most advanced technology. It is fully available as a road car in Europe and has passed all the relevant tests.

Numerous attempts have been made to import this specialist, limited use, road/track car into Australia over some time. None have succeeded to date. Allowing import would create specialised technical jobs including the development of track based upgrades for local use and more importantly export. All attempts to date have been thwarted by the Department in an interesting way.

There are Regulations allowing ‘’low volume imports’’ where a manufacturer makes less than 500 vehicles per year. The X Bow is made in volumes of around 50 per year by an independent company. However the Regulations say that if there is a relationship between that manufacturer and another manufacturer that makes more than 500 vehicles, the scheme cannot be used. In this instance, the Regulator advised that it had trawled the internet and then determined not to allow the use of the simplified scheme applying to such cars as a corporate distant relative of the X Bow builder built more than 500 motor bikes a year.

In other words, it ignored the Second Reading speech which set out the aims of the Act and used its discretion to prevent Compliance under the relevant Scheme. Compliance can now only be achieved with the expenditure of probably $100,000 for a model that may sell 10 per year, by going through the much more costly scheme that should only apply to higher volume more mainstream cars.

In response, evidence was presented to the Regulator regarding links between most of the world’s automotive industry that, if interpreted in the same way as interpreted against the X Bow project, would lead to the Scheme being totally meaningless and unusable. This was ignored.

Case Study 4 – PRB Clubman

The Clubman is a worldwide cult style of car, based on a very successful formula developed in the late 50’s in the UK. The design has been copied by dozens of small/medium manufacturers all around the world including Australia. A business called PRB designed and manufactured a very successful design and sold many of them over and extended period of time. However, despite strong market demand, the manufacturing ceased due to greater and greater demands made by the ADRs and the Regulator that made it uneconomic to continue production locally

However, the very similar UK built can still be imported under the Scheme applying to very low volume cars. Our local industry was killed off.

Growing the Australian Car Industry – A Specialist Approach

The Adoption of the UK model – the SVLA Rules

The case studies above provide a stark contrast with the UK and European ‘can do’ experience. Those vehicles cannot be built here at present yet provide a growing source of employment and training in their countries of manufacture where their compliance and road use is easily achieved. See Appendix 2, a summary of the Individual Vehicle Approval Scheme.

The type of regulation used in the UK relates directly to the potential to import and design/build specialist vehicles in Australia and the creation of an industry based on the UK model. It also relates to the development here of an industry similar to their large and successful aftermarket improvement industry. In the UK a very significant provider of employment and training lies in this industry which has grown tremendously with the encouragement of helpful Legislation. It also provides a large export platform.

The vehicles and components involved lie in the specialist/ enthusiast sphere. Both Road and Track suitable vehicles of high technical input, generally but not exclusively with a proprietary engine from a large manufacturer utilised to minimise costs. A similar model exists in Germany however their specialist manufacturers are generally at a much higher performance and price point level.

The UK model, as seen in the Appendix, allows vehicles manufactured at a volume of less than 300 per year to achieve approval by visual inspection and common sense testing by an Engineer. The Manual provided by the UK Regulator sets out common sense parameters and common sense guidance for the test Engineers. This should be noted as the direct opposite of the approach taken by the Regulator in Canberra as highlighted in the case studies.

This UK model also applies to personal imports brought into the UK. Similar imports are presently heavily regulated in Australia to prevent competition to Ford Holden and . This is another area that must be addressed in the reform of the ADRs, in order to allow individuals to import used specialist and enthusiast vehicles freely, easily and without obstruction from the Regulations.

The Present Schemes

Presently, Australia has a ‘low volume scheme’ which, as seen from the case studies, aims to prevent low volume vehicles being built here and difficulties presented to those wishing to import.

A Specialist and Enthusiasts Scheme [SEVS] exists, where vehicles that are of special interest and not otherwise Type Approved can be listed after Application to import is made. This should continue. Compliance Certification of these vehicles is undertaken after import by RAWS [Registered Automotive Workshop Scheme]. Thee workshops are accredited by the Government to Certify compliance on the vehicles imported under the SEVS.

This RAWS workshop system works and in conjunction with adoption of a UK style common sense small volume manufacture / personal import scheme would significantly reduce red tape and administrative costs in Canberra. For a vehicle imported under a simplified UK style Low Volume Scheme, certification would be undertaken by a private RAWS workshop, removing the need to maintain the existing large scale Government administrative over sight.

The Effect on ‘’Road Safety’’ of Encouraging Regulations Allowing building and Importing of Specialist Vehicles The ‘Road Safety ‘argument is a smoke screen, used by Regulators to prevent development of a successful local industry based on specialist vehicles in the small/medium business arena.

This is not a relevant consideration. It is one of the furphy’s used by the Regulator to prevent development of a UK/European type scheme whenever its role and over-regulation is raised. Fleet safety is the measure and the Australian fleet while not be affected at all by having a number of very very low use specialist vehicles on the road. The low usage significantly improves the safety outcome. The very high primary safety of these vehicles [road holding / braking etc ] significantly improves their safety . The insurance industry will also be able to confirm that the high driver involvement and experience of drivers in the specialist arena significantly reduces accidents.

The numbers of specialist and enthusiast vehicles involved in accidents are minute in comparison to the overall vehicle Australian vehicle fleet and that is where road safety is measured. Additionally there is no statistical evidence to support any suggestion that allowing the building and import of specialist vehicles adversely affect road safety. Indeed a common sense view together with UK evidence and insurers statistics show that these vehicles are rarely used often trailered and have a very low accident rate, far far lower than the general vehicle population.

A National Framework

Presently, while compliance and ADR s are a national regulation, States each have varying approaches to registration and road use of vehicles. In some states it is relaxed, in other States very bureaucratic and difficult. A national approach is necessary and a relevant part of the review of the industry and ADRs. This is particularly important to the aftermarket industry.

The Aftermarket industry and its role in rebuilding the automotive sector

Traditionally the aftermarket industry has been a significant employer in the automotive arena. However it has been hampered by over regulation and in particular at a state level, with Registration Authorities and Police often taking ‘No Modification ‘attitude and going so far as requiring an expensive Engineers report for each and every modification on each vehicle or issuing defect notices.

This further ‘cant’do ‘approach harms the growth of aftermarket industry and national regulation to allow aftermarket improvements to motor vehicles should form part of the ADR reform process.

Australia has a number of leading exporters in the space. For example a small Sydney based business exports locally developed Super Charger kits to the USA, UK and Europe which were originally developed for vehicles imported from the UK. In fact, that producer has just developed an upgrade kit which is being bought by the UK based manufacturer which is itself has a major engineering department. These kits are technically illegal in some states. They should be legal in all.

By national leadership, a simple aftermarket compliance system should be developed in conjunction with input from the industry. A common sense solution requiring minimum bureaucratic input involves the manufacturer / importer of aftermarket products to certify they meet or exceed original equipment standards. This involves only the cost of one engineer certifying a range of products and significantly reduces the cost to the consumer as well as providing protection.

An interesting case study involves the standard shock absorbers fitted to the Toyota Camry. A leading driver trainer had a contract to train a large sales force in defensive driving and the fleet was made up of Camrys. Having an excellent feeling for vehicles after years as a race driver and instructor, he could tell that at about 20,000klm the shock absorbers on the fleet were no longer effective. However, on a strict application of the ADRs and the Registration rules in NSW, fitting replacement superior, safer, better quality aftermarket shock absorbers was illegal.

The anomalies and uncertainties in dealing with aftermarket equipment needs through review in conjunction with the industry during the ADR/ Commission Report review period to ensure certainty for the industry and consumers, in order that the industry grow and become an even larger employer and exporter.

Australia’s Lead in the Off Road Vehicle industry should be supported

The local off road industry is a world leader. Our off road trailers, caravans and 4WD improvement product are world class and hold enormous export potential.

It is suggested that consideration be given to apportioning ATS funds to this small/medium business based sector as well as to specialist / enthusiast sector, to maximise product development and exports.

Department of Industry Comments against Development of a Specialist Industry Here

Recently comments were made by that Department suggesting that a specialist and enthusiast vehicle industry could not build in Australia as the UK success was based on the Formula 1 Industry. This is false and must be ignored.

During investigations undertaken by the writer in 2014, a visit to a leading UK Formula 1 facility took place. The Engineering was first class and cutting edge and included the very latest 3D printers, autoclaves and extremely sophisticated CAD and wind tunnel testing of aerodynamics. None of this is technology is directly relevant to the building of specialist vehicles or components for local consumption or export. By contrast, the writer visited a number of leading UK specialist component manufacturers who made world leading products sold locally and for export. The writer also visited a leading European specialist vehicle producer. These businesses had no need for and did not use the F1 technologies.

It was clear from these visits and discussions with these business that the F1 industry operates in a totally different arena and having no F1 industry here is no impediment at all to Australia developing as a specialist vehicle builder / importer / performance product developer with all that export potential it brings.

The Way Forward

The ADRs are massively complicated and a simpler system must be introduced urgently. Compliance should be allowed based on Self Certification of a Manufacturer that the model complies with the relevant overseas standards. The present ADRs are massively complex, for no good reason. They are a hangover to protect the ‘ Big # ‘ manufacturers from competition and tom try and protect the billions of tax payers funds poured into them over the years. A simple cheap compliance system must be put in place to make compliance easy and cheap for the manufacturer to the consumers benefit.

Extensive Departmental oversight is not needed under a consumer and importer friendly simple system and the Regulators role should be of a small Audit team. This has proven to work in the USA and Canada.

The Specialist and Enthusiast vehicle and component market must be recognised as a manufacturing growth area and simple Regulations in line wit5h the UK SVA model introduced to encourage rather than prevent this industry developing. Tens of thousands are employed in this area in the UK and can be here, where it already accounts for billions in turnover despite the difficult impediments put in the way under the present Rules and their interpretation.

Oversight of the Specialist and enthusiast vehicle arena should remain with the existing RAWS workshop system. A Panel of Industry Experts with knowledge of the specialist areas should be created to work with advise the Department as to inclusion as a ‘ specialist and enthusiast vehicle ‘ with strict KPIs on decision making , a problem at present where non experts are required to decide and often take significant time to do so.

Type Approval by an importer should still apply in both Mainstream and Specialist vehicle markets to encourage investment , stability and apprentice training opportunities in highly skilled businesses and to avoid the major pitfalls and disadvantages to consumers are seen in NZ where ‘’open slather’’ import operates.

Executive Summary

The automotive industry in Australia is in a state of flux with the withdrawal of the major manufacturers.

There are alternatives available to rebuild a highly skilled workforce involving specialist design and vehicle building and high value aftermarket components

The NZ Scheme examined by the Productivity Commission has many dangers and disadvantages and will not grow skilled jobs in the sector and will have deleterious effects on employment and training in the existing industry.

Simplifying imports of Type Approved mainstream vehicles by creating ‘self-certification ‘as occurs in the USA will reduce costs to importers and consumers as well as providing very significant savings in the regulator.

Simplifying the ADRs by allowing Compliance automatically if the vehicle type is already approved in Europe, Japan of the USA will also reduce costs to the importer and consumer as well as providing significant savings in the Regulator, as occurs in the UK already.

Encouraging the design and building of low volume specialist and enthusiast vehicles by removing the ADRs and adopting the UK IVE [Individual Approval System] will encourage the growth of that small – medium business based industry in Australia as it has in the UK.

Encouraging the growth of the aftermarket industry in Australia will also occur with the removal of the ADR impediments and also through adoption of inexpensive Certification procedures and National Regulation, removing the anti-industry discretion used by Registration Authorities and Police in some State jurisdictions.