Why is the car industry standing in the way of this option for car buyers? | Opinion

The end of 2022 is now in sight, Mariah Carey’s All I Want For Christmas Is You should start playing at your local supermarket any day now, but after two and a half years of global economic and industrial disruption there’s seemingly no end to the problems that have been crippling the automotive supply chain since 2020.

It’s something we here at CarsGuide have been reporting on with frequency. At car launches, every interview with executives inevitably pivots to a discussion about lead times and allocation shortages, with all of them – irrespective of brand – universally declaring with slumped shoulders and a sigh that “we simply can’t get enough cars to satisfy demand”. Personally, I’ve heard those exact words, verbatim, said by multiple car company representatives.

It’s a problem that has befallen almost the full spectrum of the new-car market too, from desirable vehicles like Nissan’s just-launched Z and the Toyota LandCruiser to everyday family SUVs like the Toyota RAV4. Especially the RAV4. In fact, Toyota’s global backlog of orders is reportedly two million cars long, so if you were keen on a new car from the Big T, we hope you’re a patient soul.

Australia’s new-car dealers are hurting for product, and their customers are suffering alongside them. Dealers need to sell cars to keep their balance books healthy, while their would-be customers need cars to get themselves to work, to school, to the shops and, increasingly, to domestic holiday spots. Deprived of cars, the situation simply sucks for both sellers and buyers of new cars.

But there’s a solution… for the consumers at least.

New-build cars are hard to come by right now and into the forseeable, and the local used-car market is rife with scalpers, flippers and other opportunists hoping to make quick money from the global vehicle shortage. However, there’s another avenue for used cars – the grey import route.

For those unfamiliar, grey imports aren’t technically brand-new vehicles. Though you could feasibly import something with just delivery kilometres on the odometer, grey imports have traditionally come our way after being used for a little while in their home market. They aren’t imported en masse and held in dockside holding yards by the thousands, waiting for customers to appear – rather, they’re usually only put on the boat after a paying customer has indicated they want one. The volume of grey-market importation is very closely coupled to demand, and each year the number of vehicles imported to Australia via that route numbers around 12,000 units, or about one per cent of the size of Australia’s total new car market, give or take a decimal or two.

Toyota’s global backlog of orders is reportedly two million cars long.

The bulk of Australia’s grey imports come from Japan, another RHD market that shares many of Australia’s rules and regulations around safety and efficiency standards, meaning Japanese-market vehicles are often a close analogue to what’s offered over here via the ‘normal’ full-import channels, though current legislation prevents the importation of models that are identical to cars sold here by the OEM, or original manufacturer. Japanese car owners are also encouraged through various stick-and-carrot methods (largely related to vehicle registration costs) to buy new cars often, so there’s an ample stream of new and near-new vehicles funnelling into Japanese used-car wholesalers and auction yards every year, ready for export. Cars that still have plenty of usable life left in them, cars that regular Australians are in urgent need of because the normal method of buying a car is currently failing them.

And so, while the grey import industry used to only be the preserve of enthusiasts looking to get their hands on some rare metal from overseas, or mobility-challenged customers keen to access the unique disabled-friendly vehicles that are freely available in Japan, grey imports now have much more appeal to the mainstream buyer who just wants a (fairly) fresh car in their driveway.

New-build cars are hard to come by right now.

Naturally, certain industry bodies hate this idea. Some of their concerns are legitimate – such as how recalls such as the ongoing Takata airbag disaster are managed when grey imports are getting into the country without the knowledge of the manufacturers and their local distributors. However, that’s not so much an issue caused by the grey import industry, but rather one that’s a result of a failure in how information is shared between the government department that approves and records the entry of grey imports to this country, with the companies that manufactured those products.

In the case of the Takata crisis, it was largely the car manufacturers having to proactively obtain that data from the government (specifically, the Department of Infrastructure, Transport, Regional Development, Communications and the Arts) to then action repairs to affected grey imports. While manufacturers weren’t legally obliged to repair grey imports affected by the Takata recall, the bulk of the major brands chose to do so anyway – the costs of which, for at least a few companies, was simply rolled into the company’s Takata crisis ledger and passed on to their head offices overseas.

The bulk of Australia’s grey imports come from Japan.

A more centralised approach would arguably be the best way to manage future recalls for grey imports, but it would require more collaboration and cohesion between the government, car companies, the grey import industry and the Federal Chamber of Automotive Industries (FCAI) - the lobby group that represents most car brands that operate in Australia.

However, the FCAI appears reluctant to engage. Lately, the organisation has raised concerns about grey import electric vehicles, citing concerns over whether Australia will be saddled with the task of recycling a large quantity of batteries at the end of their lives, and whether the country will become a dumping ground for obsolete technology as motorists squeezed by high fuel prices pursue cheap used EVs from overseas. Obtaining hard numbers on precisely how many EVs are imported via the grey import route is difficult, but current estimates put the number no higher than 2000 cars annually. So far this year, more than 14,000 brand-new EVs have been sold in this country by OEMs.

People want new cars, but they can’t get them.

But while car companies and their lobby groups will hate the idea of motorists bypassing new-car showrooms and heading to an importer, here’s the thing: the regular channels aren’t working - at least not like they used to. People simply want new cars, and they can’t get them.

When the supply chain situation eventually improves, Australia’s car-buying public will inevitably gravitate back to showrooms – after all, the peace of mind of a factory-backed warranty, capped-price servicing and all of those other aftersales niceties that only the OEM can provide will be what the bulk of Australia’s car-buying public want.

But in the here and now, with so many Australians being forced to wait months (if not years) for their next new car, the grey import industry could be seen as a panacea, not a problem.