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IAC report on passenger motor vehicles



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IAC REPORT ON PASSENGER MOTOR VEHICLES* 77/126 BACA

(Joint statement by the Minister for Industry and Commerce, Senator Robert Cotton, and the Minister for Business and Consumer Affairs, Mr. Wal Fife.)

The Minister for Industry and Commerce, Senator Robert Cotton and the Minister for Business and Consumer Affairs, Mr.. Wal Fife today announced the Government's decision on the report of the Industries Assistance

Commission on Passenger Motor Vehicles dated 12 September 1977.

The Ministers said that the Government had accepted the Commission’s recommendation that quantitative import restrictions on passenger motor vehicles should be continued until 31 December 1979. Senator Cotton and Mr. Fife said that the Government considered that continued restrictions were necessary to prevent severe disruption in the local

industry. The Ministers said that the Government believed that unless import restrictions were continued the local industry’s market share would fall below the level of 80 per cent which the Government regarded as necessary to avoid disruption. However, the Government did not accept the Commission's recommendation that the market sharing policy be terminated on 31 December 1979. Any arrangements necessary to ensure that market disruption does not take place after that date can only be determined during 1979, the Ministers said.

The Ministers stated that the level of quantitative import restrictions for the last quarter of 1977 would continue at the rate previously announced, i.e. 90,000 vehicles per annum. Thereafter, the restrictions would limit imports to 94,000 vehicles in 1978 and not less than 90,000 vehicles in 1979. The actual quota level to apply in 1979 would be determined towards the end of 1978.

As to the principles of quota allocation in 1978 and 1979, the Ministers stated that the Government had accepted the Commission's general approach whereby quotas would be based on market performance. However, the Government had decided to continue the existing practice of issuing licences which are not restricted to specific makes of vehicle. In

addition, the Ministers said that the Government had decided that quotas will be transferable in relation to 1978 and 1979.

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»* Printed copies of the Industries Assistance Commission's report will not be available until the end of October. For convenience the Commission's proposals together with its table on quota allocation are attached to this

statement. Copies of the report will be available for examination by interested parties at the Customs House in each capital city. · .

The Ministers pointed out that there could be some delay before the calculation of all individual importer’s quota entitlements is completed. In the meantime, importers would be advised of interim allocations if necessary. The Ministers stated that pending the determination of final

allocations importers should regard the allocations set out in the Commission’s report as indicative only.

The administrative arrangements for the allocation of quotas for the remainder of 1977 and for 1978 would be announced by the Department of Business and Consumer Affairs through a Bureau of Customs Notice as soon as possible.

Senator Cotton and Mr. Fife said that the present duty rate of 45% which applies to imports of passenger motor vehicles will be continued until 31 December 1980. The tariff trigger mechanism which is designed to operate when

imports fall below 20% of total registrations will be suspended until that time.

The Ministers also said that the Government had accepted the Commission’s recommendation that no additional action was necessary in respect of imports of unassembled passenger vehicles which are assembled outside the motor vehicle plan. The Ministers said however, that the

Government did not favour any significant expansion of investment in assembly operations outside the plan and imports of unassembled vehicles would therefore be closely monitored.

CANBERRA A.C.T.

6 October 1977

Extract from Industries Assistance Commission Report on Passenger Motor Vehicles of 12 September 197?.

PROPOSALS .

The Commission, proposes that to neat the policy requirements specified in the terms o f 'reference: ; .

. additional action is required in respect of imports of assembled passenger motor vehicles; ·

• the additional action should take.the form of quantitative import restrictions xvhich would limit imports of new and second-hand vehicles to 94 000 vehicles in 1978 and not less than 90 000 vehicles in 1979;

• quantitative import restrictions and the commitment to reserve about SO per cent of the market for local producers should cease on 31 December 1979; . ' ·

• quotas should be allocated for the whole of 1973 with validity extending into 1979; "

. quotas for 1973 for each make of vehicle should be equal to the highest absolute number of registrations of imported assembled vehicles in either of the past .two financial years, 1975-76 and 1976-77, except that:

(a) the quota for Volkswagen vehicles should be 5720 vehicles, ' . ' .

* ' (b) and Ford should 'each receive a quota of 1000 vehicles, and

(c) to accommodate the adjustments to quotas determined in accordance with the general basis of allocation which result from the special allocations set out in (a) and ■ (b) above, the quotas for Toyota and Nissan should be

' determined by reducing the highest absolute number of registrations of ebu imports by each company in either 1975-76 or 1976-77 by a fixed percentage such that total imports are limited to 94 QUO vehicles;

. where there are cwo or more importers of a particular make of vehicle. quotas to individual importers should be allocated on the basis of their imports cleared in 1975-76 and 1976-77;

« quotas should not be transferable between companies;

« Volkswagen should receive a quota allocation of 1430 vehicles for the December quarter 1977; and .

. quotas for 1979 should be. adjusted according to the proportionate difference between the total quota in 1973 and 1979 unless the quota level in 1979 is less than 94 000 vehicles. If the total quota is reduced in 1979, small volume importers with a 1978 quota entitlement of 1000 or less should receive the same absolute quota as in 1973, and the decrease in the total quota should be apportioned over all other importers in proportion to their 1973 quota entitlements.

The Commission also proposes that no additional action should be taken in respect of imports of unassembled passenger motor ' vehicles outside the motor vehicle plan.

Attention is invited to the Commission's comments on the level of duty to apply to imports of assembled passenger motor vehicles during 1978, 1979 and T980.

W.A. McKinnon Chairman

C.W.Conron Commissioner

CANBERRA, AUSTRALIAN CAPITAL TERRITORY 12 September 1977

TABLE 9 : ALLOCATION OF QUOTAS AS SUGGESTED BY THE COMMISSION

V e M c 1 e/Company

Registrations of Registrations of rbu imnorts- non insorts

1975-763 1976-77ab Quota - 1978

P1 a n_F,n ti a n t . s

• 2

Cb.ry--.ler c c 4 412

For.-l - - 1 000

GNH . - - 1 000

Hi nsan c c . 13 505

Toyota n . c 13 597

Assembler::.

Leyland c ‘ c 3 178

Ron a i . ' j t /Peugeot c c * 278

Volvo c c 1 899

Importers

Mazda 28 625 27 424 28 625

Hogdn 7 191 8 283 8 283

VolkswsPen c . c 5 720

Mercedes 2 721 . 2 721 2 721

Fiat/Lancia 2 711 2 516 2 711

Subaru d d 2 419

Alfa Romeo 1 AOd 1 299 1 409

ΓΜΝ 1 153 1 175 1 175

Citroen 709 . 447 709

So eb A 76 497 497

Porsche 117 265 265

Skoda 192 200 200

Polls. I'oyoe/Beutley 69 70 70

Ferrari 39 42 42

Jonsen/I.otiis 30 16 30

Morgan/TVR 18 13 18

Purvis 16 5 16

Lamborghini 13 15 15

Mar·'.,?, rat i 9 7 9

Γ- 2 Tomaso. 4 - 4

Other 148 127 , 193

Total 92 943 99 489 94 000

a Based on ABS No. 14 .2 : Motor Vehicle Registrations. b Includes estimates of registrations in the June quarter. c Hot separately available from ABS registration data. Confidential figures derived from sales data supplied by witnesses have been

included in "Total". d Registrations of two wheel drive vehicles not separately available from A3S registration data. Confidential figures derived from sales data supplied by Subaru have been included in "Total". ,