FCAI welcomes government 'car dumping' comments

Fleet managers will not see a flood of other countries' old second-hand vehicles entering Australia in the near future, according to the Federal Chamber of Automotive Industries (FCAI).

This stance was illustrated by the federal government earlier this week and slams the Productivity Commission's final report into Australia's Automotive Manufacturing Industry. In it, the commission suggests relaxing the restrictions on second-hand vehicles to lower prices and provide greater choice in the market.

However, both the FCAI and the government agree this isn't the best move for the country. Based on recent reports, FCAI Chief Executive Tony Weber believes Australia has the most competitive new car market globally.

"With the significant year-on-year improvements in vehicle technology, it goes without saying that a newer motor vehicle fleet is better for consumers as newer cars are safer, more environmentally friendly and more reliable," he said.

"We will continue to engage with the Government about this matter. This includes through our response to the Motor Vehicle Standards Act Review."

Mr Weber also pointed out the recent CommSec Car Affordability Index, which highlighted the fact that Australian car prices are at their lowest since records began in 1976.

Industry authorities point out that this is a good time for an investment in new vehicles as consumers can get a safe and fuel-efficient vehicle for a reasonable price. Conditions are expected to remain stable for the months ahead so this could also be the perfect opportunity to invest in green cars that can assist with running costs.

Luxury Car Tax

High-end fleets will be interested in the Productivity Commission's recommendation that the Luxury Car Tax be removed, which is supported by FCAI.

Mr Weber described this tax as "poor" as it distorts purchasing decisions and affects both safety and environmental outcomes.

"We welcome the government's in principle support for this recommendation and we look forward to further consideration in the government's Taxation White Paper," he concluded.