'Grey import' recall rule change could sink small businesses

10/16/2024 02:00 PM

Workshops undertaking vehicle compliance certification of privately-imported vehicles could face financial ruin if they can't trace a new owner when a car is recalled, Drive understands.

Changes to the Road Vehicle Standards Act 2018 (RVSA) that allow a greater volume of privately imported vehicles to be brought into Australia under the expanded Specialist and Enthusiast Vehicles (SEVs) scheme finally came into full effect last year, following a period of transition.

And now – for the first time under the new rules – a privately-imported vehicle (commonly known as a grey import) is subject to a recall and therefore putting the new process to the test.

These so-called ‘grey imports’ are models that make their way to Australia outside of the normal volume process carried out by new vehicle brands and distributors. Most come from Japan, although the term also applies to vehicles from other countries. 

They can be brought in by businesses specialising in importation, or by an individual.

The onus is on the workshop that undertook vehicle compliance certification, leaving them exposed to potential spiralling financial costs and legal issues for the fix – even if the car has subsequently been sold on.

Kristian Appelt, Vice President of the Australian Imported Motor Vehicle Industry Association (AIMVIA) – who also runs import broker business Iron Chef Imports, told Drive the process was "a little muddy" to say the least.

"With the introduction of the RVSA, the Federal Government has sought to define and improve recall procedures for used imported vehicles, with the Registered Automotive Workshop that originally complied the car to Australian Design Rules being the first port of call for affected vehicles and their owners," said Mr Appelt.

"The idea is that it's easier for owners to know where to take a vehicle if it's recalled, but in a legal sense it doesn't really answer the problem of who is responsible for making it compliant.

"If the workshop assumes responsibility, it can be expensive and especially if work is not done properly, you'd need extensive insurance to cover it.

"It's possible it could lead to workshops taking the importer to court."

In recent days, 560 imported 2011 Toyota HiAce 'welfare' vans were recalled by the Department of Infrastructure because it was found the Japanese-standard wheelchair lifter and restraints were not sufficiently weight-rated to meet local safety standards. 

Appelt owns one of these vehicles, having previously imported one for his own use, and was contacted by the Department to advise of the recall.

"In this case, for me it was just one vehicle, but some workshops out there could have complied many. I've had to take out higher liability insurance because if it wasn't one car, and it was many and I was responsible for the work, it could potentially take me down."

Mr Appelt told Drive that AIMVIA is currently working on a independent recall system for private imports to help protect consumers.

When the fresh laws were being debated in 2016, it was reported that then Major Projects Minister Paul Fletcher said: "There will be an online database [the Register of Approved Vehicles]…and there will be a requirement for every vehicle to be on that database. That tool will be used to notify an owner if there is a recall.

"The notification will be done by the Australian Government then you'll need to make your own arrangements as to where you go to get the work done. 

"What we think will happen… is there will be automotive workshops that will, for a price, do the work that needs to be done."

While Drive understands this is happening, and there is indeed now a Register of Approved Vehicles (RAV), identifying whether a privately imported vehicle is subject to a recall is "pretty difficult to monitor" and who fits the bill for the work required is not always clear cut.

“We get wind of most things,” Appelt added, “but we also rely on good will.”

Technically the issue has been a potential problem for years, but is only coming into the spotlight now due to the implementation of the RVSA – which allows as many as 30,000 extra vehicles a year to be imported – which can be a classic car or even a brand new one that just isn't sold in Australia. 

The first time the scale of this problem was realised was as part of the global mandatory Takata airbag recall in 2013. While car makers were legally required to contact owners of any cars they had sold in Australia which had been fitted with the faulty airbags, they were not responsible for private imports. 

Beyond the question of who pays the bill and takes responsibility for private imports in the event of a recall, other parts of the industry question the expansion of the rules more broadly.

Because the car brands aren't bringing these vehicles into the country themselves, they aren't able to track them down and assist with recalling them if there's a problem.

Imported cars are given a new Vehicle Identification Number (VIN) when they are complied for registration in Australia – unless they already have a 17-digit one as is standard in Europe – so manufacturers are typically a step removed from the conventional process used to identify and contact owners.

As previously reported, this can then lead to car makers being left exposed with vehicles bearing their brand which were not marketed in Australia in the first place – with the peak body representing manufacturers, the Federal Chamber of Automotive Industries (FCAI), critical of the scheme. 

Nissan Australia has also previously warned it may not be able to provide the normal support for owners of privately imported Nissan vehicles – such as its electric Leaf, which is a popular second-hand import – because of subtle but significant technical differences in key components.

"Customers sometimes get frustrated because we cannot rectify a problem because we never sold the car," a spokesperson for Nissan Australia previously told Drive. 

"They probably think that because it has our logo on the bonnet that we can automatically help them, but you cannot supply spare parts for every single model the company has ever built, everywhere in the world. It's just not feasible." 

A growing number of early-model Nissan Leaf hatchbacks are coming to Australia from Japan – currently priced from about $23,000, which is less than half the new-car cost – as importers take advantage of SEVs. 

While most owners of the privately imported 2011 Toyota HiAce under recall are likely to have been contacted by now, AIMVIA encourages any owners to see if their vehicle is affected here, or to contact the Registered Automotive Workshop listed on their compliance sticker, which can usually be found on the passenger side B-pillar. 

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