February 24, 2002
Media Release

Cost And Confusion Generating Frontal Impact Standard For Cars To Be Challenged By The IMVDA At The Regulations Review Select Committee

“The Government’s Frontal Impact Standard (FIS) policy for used cars is generating major compliance costs and a high level of confusion in the market”, IMVDA chief executive David Lynn said in a statement today.

He said the Association will challenge the FIS at Parliament’s Regulations Review Committee. We will be seeking changes to make the FIS workable and achieve safety at reasonable cost, which is not the case at present. The complaint will be lodged within a matter of days rather than weeks.

“I predict that come April 1, dozens if not hundreds of good quality imported vehicles landed in New Zealand will be rejected and have to be scrapped or re-exported. This is almost inevitable because of the way the Transport Minister Mark Gosche has chosen to implement the new standard.

“Consumers are going to be the losers because prices for used car imports will rise on average by a few thousand dollars. Many importers will be caught because the Land Transport Safety Authority (LTSA) cannot supply information as to precisely which cars comply with the new standard and which do not. Already there is confusion in the market.

“It is clear, from information received from the LTSA and the Minister under the Official Information Act, that officials advised the government the new rule was not “safety at reasonable cost”, which is a requirement of the LTSA.

“The Ministry of Transport recommended that the Government deem all cars manufactured after 1 April 1994, would comply with the new standard. This was similar to the IMVDA recommendation.

“If the Minister had listened to the LTSA and accepted the recommendation from the Ministry of Transport, consumers would be better off, the compliance costs would be virtually zero and there would be none of the present market confusion.

“It is regrettable that Ministers’ paper to Cabinet said a list of which vehicles complied with the FIS would be made available by at least one company to importers at a cost of about $100 a list. The lists are not available and the LTSA says they will not be coming. This means Cabinet allowed the FIS proposal to proceed on the basis of misinformation supplied to it.

“We appreciate the LTSA is trying to get the necessary information from the motor vehicle manufacturers, but as of today we are only aware of a few that have complied. Time is fast running out.

“The IMVDA believes that Mr Gosche should urgently review the policy to make it work in the interests of consumers, safety and the business community. There is time to sort out the mess before it causes too much damage to consumers and the trade.

Mr Lynn said he hoped to meet with the Minister shortly and will be writing to Commerce Minister Paul Swain about the compliance cost issues.

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