November 16, 2001
Rushed Car Safety Rules Hit Buyers
Proposed motor vehicle safety regulations could hit car buyers heavily in the pocket and damage the economy.
Independent Motor Vehicle Dealers Association (IMVDA) Chief Executive David Lynn says if the Government bans cars that
don’t meet new frontal impact standards from April next year, it will eliminate imports of pre-1995 vehicles, reduce
choice and increase costs without significant safety gains.
The proposed regulations would allow imports only of vehicles with specified design features that provide greater
protection for occupants in a head on crash.
David Lynn says the IMVDA supports the proposed impact standard but it should be phased in over two years to become
fully effective in 2004.
He believes the Government is rushing possible implementation.
“It will force many people to delay replacing their cars and older models will stay on the road longer,” he says. “This
will lower the average safety level of cars for the next two years, reduce choice, and force buyers to pay more when
they do decide to change.”
Mr Lynn says that 50% of the cars that would otherwise enter New Zealand next year won’t be allowed in.
“Clearly some of that volume will be replaced by newer cars but total volumes will be down in 2002.”
Mr Lynn says a Land Transport Safety Authority (LTSA) analysis prepared for the Government spells out costs to safety
and consumers’ interests over the next decade and does not provide statistical support for the proposed policy change.
A New Zealand Institute of Economic Research analysis of the LTSA report says that “the economic effect of the 2002
implementation option is a mid point welfare loss in the range of $185 million to $255 million. The net distributional
effect or income transfer is away from New Zealand buyers (who may be low income households or small businesses) mainly
towards wholesalers in Japan and overseas car manufacturers”.
In simple terms this means New Zealand car buyers collectively will be worse off by several hundred million dollars and
the beneficiaries will be the Japanese car companies.
Mr Lynn says new car companies have lobbied the Transport Minister vigorously on this issue because they want to reduce
used imports and sell more new cars with increased margins.
He says unless the Government handles compliance issues carefully, those companies could use the new regulations to
increase their share of the used import trade that they have entered in recent years.
“That will be bad news for all car users,” Mr Lynn says.
The IMVDA has made strong representations to Government officials and wants an urgent meeting with Transport Minister
Mark Gosche to discuss its concerns.
“It is vital that New Zealanders’ interests are placed ahead of offshore companies and we want the Government to
understand the potential for damage before it makes a final decision,” David Lynn says.
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