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Import Interview - Part Two

Talking with Australia's leading low-volume vehicle importer - Craig Dean of Sports and Luxury Cars.

Interview by Michael Knowling, Pix by Julian Edgar and Michael Knowling

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There has recently been some fairly major changes in the regulations surrounding Japanese import cars - who do you think prompted these changes?

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"The full-volume manufacturers - not necessarily Holden or Ford, but more so Toyota - don't like us bringing their main product over. They've been lobbying for quite some time to the Government and also to the Federal Office of Road Safety (FORS) to stop us from importing cars completely. The latest review and changes have been made very, very strict to the point where - once it's fully in place, I think, in May this year - there's probably not going to be a lot of importers or converters around. I think it'll wipe out nearly eighty percent of the American converters simply because it's so complicated. The IQ level, so to speak, of these converters - although they're good workers - they don't have the scholarship background to fully grasp the new system. If you can't do your own engineering, for example, you have to pay someone else to do it. We do all of our engineering in-house; we can also adapt to any changes very quickly. So, yes, I think it'll wipe out a lot of the smaller players in the conversion industry.

"The Japanese importers will change a lot - more so than the American scene. The biggest problem with the outgoing system is that it wasn't managed properly. It wasn't implemented properly, so anyone could get into it. The problems that have arisen include situations where compliance plates have posted in the mail for as little as a couple of hundred dollars."

What has been the process to date?

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"In the old system you could be anybody and gain a licence - it didn't matter what you did for a living. You needed an engineer that would certify your car and then you went through a process of documenting that you sent into the Government. They'd look over it, come down and inspected the car to make sure everything had been done as stated. They'd then go away, assess what they looked at and when they were happy they'd send you a licence - that's essentially it. That licence was for 25 cars. If you went a bit further with tests of seatbelts and things like that you could go to 100 vehicles - in the old system. The problem was it wasn't policed. You could falsify invoicing or whatever you like - so long as you had your paperwork in order. Your could get away with not doing anything to the cars - I mean, if you had the right shonky engineer signing your paper work, you didn't have to meet ADRs. What's come out of the closet in later times is that mirrors often aren't done, fuel restrictors aren't put in and belts aren't even done. Sometimes the cars are complied with the necessary seatbelts, then it's taken back and the old seatbelts are reinstalled - stuff like that. There's been some very bad workmanship and ethics.

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"That all came to a head when, I think, Toyota sent out private investigators to suss everybody out. All that evidence was passed onto the Government and they've had to do something about it. What they did was review the motor vehicles standard act and brought out a new system. We've been lobbying for a balanced, sensible system that is fair and won't wipe out the industry - we lobbied hard and we haven't really got to do what we wanted. I guess the persuasion of the full-volume manufacturers swayed them. In the scheme of things, the new system has opened up a few extra models, but there are some models that should be eligible but aren't - I believe. It's not just the model range that's an issue, though, the problem is how we justify ourselves to the new system. It's very stringent - there are no leeways, you can't put in an argument case, a rule is a rule and it's black and white. In a way that's good, but it's got to be sensible so that the system works. There's no use having a system if it's going to put everybody out of business. We're still fighting through political levels of evidence - we're hoping that they'll be a bit more sympathetic in some cases. At the moment, you really can't do brand new vehicles because the other countries don't have the requirements that we have in Australia - we lead in a safety level in some respects.

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"That new system warrants you have ISO accreditation. The reason why I say about 80 percent of the industry will finish is because ISO alone will close down most of the backyarders - the standard is ISO 9000/2000. That system says you must have your licences in order and you're in a commercial premises that contains all of the necessary equipment and meets occupational heath and safety standards and all those things. You also - personally - have to be qualified. If you're not a motor mechanic or whatever you don't qualify; only people already in the trade can get into it. From there you have to qualify for the RAWS program, which is a registered automotive workshop scheme. You need to have a registered workshop with all necessary systems in place - documentation for importing, engineering details, design drawings and everything. Before, you could sort of fluff the whole scheme no worries - not now. It's very heavily documented. They say it isn't meant to be a burden on your business, but I now have someone full-time doing paperwork - and it's on-going. It is ongoing because every time you import a vehicle you must make sure all the paperwork stacks up - it's a vehicle-by-vehicle approval.

"The positive thing in it - for me - is the competition level has presently got to the point where it's hard to make a buck (if you do everything properly). With the new system after May 2003 it should stabilise and you'll have only the fair-dinkum people in the industry. That's what should hopefully happen."

Will the new regulations open the door to cars like the Mitsubishi Evo 7 or Evo 8?

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"Well, the Evo 7 is an ineligible vehicle at the exact moment - we're having a problem with evidence for them at the moment. At this moment we've got the first second-hand Evo 7 in the country for our SEVS approval, but we're still arguing about ADR 73. That's the standard for offset frontal impact. We need to resolve all this because our industry cannot afford to do full crash testing - who says a given car is going to comply anyway? It's not going to happen."

Will the new regulations have a dramatic effect on the type of Japanese vehicles coming in?

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"It will. It's opened up a few vehicles that weren't eligible under the old system, but it's also got rid of a hell of a lot of vehicles - Harriers and Hilux Surfs are finished. The current trend at the moment is for people movers, so what the full-volume manufacturers made sure they weren't allowed in - that's the long and short of it. Things like Soarers, four-door Skylines are and Evo 6s are eligible though."

And what about some of the more obscure Japanese imports that have been coming in? Will diesel Corollas and the like still be allowed?

"Diesel engines used to be eligible, but they've been stopped. A car must have some sort of performance indicator and be something special, otherwise you can't import it.

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"A car has to have an unusual design or it must be high performance - a certain number of kilowatts per tonne. Also, if the vehicle is available locally in a slightly different form you can't bring the Japanese version in. That applies to the passenger car class. There are a few good vehicles eligible in the new system, but I don't want to make public the models I'm looking at for the moment. Under the new system, once you apply for a vehicle everybody in the country knows what you're doing. I don't think that's a good idea. You've got no commercial confidence - you apply for a vehicle, it goes onto the SEVS listing and before you know it everyone else is doing it beside you."

Will the cost of Japanese import cars be effected?

"The cost will go up, definitely. Given the new process where you have to licence yourself and the money you have to spend, it's not cheap. I think it'll be about a $3000 increase on compliance costs per vehicle. If business aren't allowing for that they haven't done their sums right."

And what do you think will happen to the value of imports that have already been complied and sold locally?

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"The existing Skylines that are here will stabilise in price if there aren't more coming in - by September 2003 I think they'll be fairly solid. I think only about a quarter of the number of vehicles will be coming in. Now, I mean, people can buy a Soarer virtually anonymously on the internet - there are a lot of backyarders that bring in two or three cars a year. Under the new system that will stop. Hopefully it'll be effectively just a dealer network that stands. That is what's needed - it has been too loose.

"We're pushing hard to be the first approved RAWS participant. We were also the first company to plate a vehicle - a Toyota Soarer. We had a big launch here with some members of parliament and everybody from FORS and everybody. We're keen to be the leaders again - set the standard and let people follow.

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"Oh, and the new system stops damaged vehicles from being complied. We've been lobbying for that for a long time - damaged vehicles shouldn't be imported. If a car has any more than a 25mm bend or damage to a major member it has to be crushed or exported. That's something that's being policed at the wharf by customs. That's great because buyers know the integrity is there. Hopefully consumer confidence will improve and insurance companies and finance companies will stabilise. I mean you can now get Soarers for under $20,000 but they're pretty rubbishy. Then there are companies, like us, that sell them for around $30,000 for what's the same type of car - but the quality is there. It's not trash."

What do you think will be the 'buzz' Japanese import cars through the next five years?

"The only manufacturer that's making anything different at the moment is Nissan. They've got the 350Z out, for example. Toyota has been very conservative with its sportscars - they haven't really been doing anything. There's the new Soarer - in Australia as the Lexus SC430 - but that's it. I'm just waiting for the new Supra to come out, but there's no word on that. I hope they've just sitting back a bit at the moment and when they do release something - as usual - it'll be perfect. A four-wheel-drive 400 horsepower monster or something like that..."

Contact:

Sports and Luxury Cars
+61 3 9753 5799

www.sportsluxurycars.com.au

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