Motor-Car Imports

Press, Volume CIII, Issue 30529, 26 August 1964, Page 16

Motor-Car Imports

The restrictions on the resale of new cars now under consideration by the Minister of Customs (Mr Shelton) are evidence that the Government’s attempt to “end the rackets” in new cars has not yet succeeded. When the various schemes for incteasing imports of cars last year were announced, it was the Government’s hope that sufficient cars would be imported to satisfy the demand, and that prices of second-hand cars would be reduced to a more realistic relation with prices of new cars. The various bonus and incentive schemes resulted in record imports in the 1963-64 licensing year, when some 58,000 cars were imported, compared with 38,000 in 1962-63. In spite of this big increase in supply, some owners of nearly-new cars have advertised them for sale at prices above list prices. Imports will be reduced this year; and, if usedcar prices rise, trafficking in new cars may return. For that reason, Mr Shelton has devised a scheme to prohibit the resale of a new car within 12 months, except at a depreciated value to the dealer, from which it was purchased. The scheme also envisages control of resale prices, and provides for sales under other conditions where hardship) can be established. Similar covenants already exist in the trade; but if they were given statutory authority they would be more effectively enforced. However effective the covenant may be, the need for some such restriction aftrr a year of record imports forcibly demonstrates ‘the excess of demand over supply in the market for new cars. The continued expenditure of scarce overseas funds on this scale cannot be justified. Perhaps the remedy briefly applied by Mr Nordmeyer, and again suggested by the Monetary and Economic Co’ancil this year, is, after all, the only one: to raise the price of new cars by increasing the sales tax on them.