Concealed plan to advance interests of car makers

November 27, 2001

MEDIA RELEASE

Motor Industry statement re safety conceals plan to advance interests at the expense of consumers

“The Motor Industry Association’s statement regarding the proposed frontal impact standard for used imports is a smokescreen to cover up their cynical ploy to advance the interests of Japanese car manufacturers at the expense of low income New Zealanders and small businesses”, the Chief Executive of the Independent Motor Vehicle Dealers Association (IMVDA) Mr David Lynn said in a statement today.

Mr Lynn was responding to a media release put out by the Motor Industry Association’s CE Perry Kerr today.

“Mr Kerr’s statements about the impact of the proposed standard on overall fleet safety don’t stack up. The Land Transport Safety Authority (LTSA) and its minister are required to promote “safety at reasonable cost”. The current proposal fails that test by a very wide margin.”

“Clearly Mr Kerr has not even read the LTSA’s own economic analysis which demonstrates there is no real safety gain for consumers over the next decade from implementing the policy as proposed. For early part of that period the overall fleet will become less safe because most consumers won’t buy the more expensive cars that will be available.

“The costs to consumers from implementing the policy will be enormous” Mr Lynn said. The LTSA itself said: “ Combining the safety benefits estimated earlier, there would be a net loss of around $70 million to $440 million, depending on the proportion of the price increase that is transferred to overseas exporters….. “The restriction will disadvantage people from low socio economic groups, at least in the short term (i.e. during the first six years after the restriction)”.

“Having failed to block used imports the Japanese car manufacturers has joined the trade. However clearly they also see the opportunity to use the LTSA’ demanding compliance procedures to increase their share of the used car market at the expense of independent New Zealand owned importers. This will happen because of the unique knowledge the new car companies have of which cars comply, particularly those manufactured up to 1996.

Mr Lynn said the IMVDA has recommended the government defer introduction of the new standard for two years and deem all cars first registered offshore after January 1, 1994, comply with the new standard. This will hasten the inevitable move towards importing cars that comply with the new standard, without unduly penalising consumers and giving the Japanese companies the opportunity to corner the market at the expense of New Zealand’s consumers”, Mr Lynn said.

Issued by David Lynn

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