Federal Minister for Urban Infrastructure, Paul Fletcher, has told AADA National Dealer Convention delegates that attitudes towards car ownership were shifting, and that the industry was understandably concerned about degree of change regarding the question of whether consumers should buy a new car.

“For example, we’re seeing a drop-off in the distance people drive their cars every year. Average annual per capita vehicle kilometres travelled peaked in 2009, and have been falling since then,” he said.

“Australia’s experience is similar to other developed countries like the UK, Japan and Germany. At the same time, younger Australians are not rushing to get their driver’s licence at the same rate as earlier generations. In Victoria, the percentage of 15 to 24-year-olds with licences went from 77 per cent to 66 per cent between 2000/2001 and 2012/13.

“Another emerging trend is a perceptible move away from a personal ownership model to a shared model. We’ve seen the rise of car-sharing: companies like GoGet, in most Australian cities. Ride-sharing companies like Uber, and growing use of public transport. These changes suggest that at least among younger Australians in big cities, there’s increasingly an attitude that you purchase ‘mobility as a service’ rather than buying yourself a set of wheels.”

Paul Fletcher

But despite all of these factors, the retail automotive sector has kept ‘powering along’, the minister said. The drivers for the continued growth included Australia’s steadily rising population, and the ever-increasing affordability of cars.

Mr Fletcher said Australia had to be careful not to be left behind in the next stage of technological advancement and innovation.

“While car assembly operations are ceasing, we will still have important sectors of expertise in Australia serving global automotive supply chains. For example, Ford is expanding its Asia-Pacific product development centre in Melbourne, meaning that a significant research and development capability will be based in Australia,” he said.

“The automotive market is becoming more globally integrated than ever before. This trend has important implications for Australian consumers, and it’s why we’re making some significant changes to the Commonwealth laws which govern the first supply of motor vehicles to the market.”

Mr Fletcher said the government would introduce a new Bill into the Parliament, The Road Vehicle Standards Act, within the next few weeks. This will replace the existing Act, which has been in place for nearly 30 years.

“If every light vehicle is imported, it makes compelling sense for Australia to align our standards to global automotive supply chains, rather than requiring unnecessary differences which do not have a safety justification, and which simply impose additional costs on the consumer,” he explained.

“The new act will have stronger compliance and enforcement tools, and make it more effective in ensuring that vehicles imported to Australia are as safe as possible.”

Mr Fletcher said that while most major manufacturers and importers invested heavily in vehicle safety and compliance, more effective law was required to ensure an even playing field, with everybody using quality assurance processes of sufficient rigour.

“At the same time, the current law imposes unnecessary red tape on manufacturers, which adds costs that are ultimately passed on to consumers,” he said.

“Under the new Act, there will be savings to industry of around $70 million a year, which in turn will benefit consumers. The new Act is designed to improve consumer choice, by increasing the range and types of vehicles that be supplied in Australia, without compromising the level of safety the community expects. The new Act will offer more options and more choice for car enthusiasts, including variants of performance vehicles, environmentally-friendly hybrid and electric vehicles and vehicles that cater for people with disabilities.

“We cannot have Australian consumers being left behind the rest of the world.”

Emissions

In 2015, the government established a Ministerial forum on vehicle emissions to look at three related issues:

  • the regulatory framework covering noxious emissions such as carbon monoxide, nitrogen monoxide, sulphur dioxide, and particulate matter
  • fuel efficiency standards. Despite 80 per cent of the world’s fleet being subject to fuel efficiency standards, Australian vehicles currently are not.
  • fuel quality standards. Australia has the lowest fuel quality standards in the OECD, and rank 70th in the world.

The electric vehicle share of the Australian new vehicle market is currently about 0.1 per cent. Environment Minister Josh Frydenberg recently announced that the Clean Energy Finance Corporation is supporting a new, $100 million assisted finance program to encourage Australians to switch to electric and low-emission vehicles.

When it came to automated vehicles, Mr Fletcher said they were not yet at a point where they were close to being safe to use on public roads. He anticipated the adoption and uptake of fully-automated vehicles would be a lot slower than ‘the hype’ would have people believe, suggesting that time would arrive around the year 2060.