The Import Industry

[Mr Eps]

a particular user of this thread said in another thread of the future risks to our car import industry... i'm starting this thread to discuss exactly what that is and what that will mean to us on the consumer side of things - and what it means to business owners in the industry...

the user said in a loose term... if people paid a fair price for compliance then the industry wouldn't be in the danger it is in now because workshops are closing and not bothering

reason i want to know more is... - for a consumer, $2,200 is the GENERAL going rate to comply a basic car... and upwards... if that's not a fair price - then what would you suggest IS a fair price?

i personally was a bit shocked to find nobody here in WA has any evidence packages or plates to comply any Toyota Soarer 1996 onwards - becuase nobody wants to touch them... nobody wants to take that risk on board...

reason i think people don't "pay a fair price" for compliance is... all consumers see is a car that looks identical to what we purchased in japan...

and we're paying thousands of dollars and many of us don't know what has been done, does that make sense?

perhaps if we- the consumers - were kept more "in the loop" regarding what service we are receiving for our compliance fee, rather than just being invoiced for it... perhaps we'd have a better understanding of what we're paying for and get a better grasp of it's financial worth...

i remember hearing the catallictic convertor for M35 stagea is $1700 alone, so what's a general cost breakdown?

also, approximately how much profit do the RAWS workshop see of our fee? and what does that profit go towards, ie - does it generate wealth for the owner? does it perpetuate the industry in any way?

as a side note i will say being gracious with money is not something many Australians hold closely to our culture... for a good example go check the parts for sale thread in this forum... everywhere you look you'll see someone putting up a set of imported work wheels for sale for say $1700 and you'll have someone in public forum just blurting out "i'll give ya $600 for em these aren't worth what you're asking mate" ... not only does this destroy the credibility of the seller but also scares off responsible offers of the item...

try sell a car - "i'll give ya 2 grand fer it"

i guess same premise applies here with compliance - screw the workshop down in price that way consumer wins in the short term...

as opposed to in, say - Japan, where price haggling and offering lower amounts than sale price is considered rude and shameful...

that is my view as to what could be a bane for the import industry... australians and our culture of expecting to receive an amazing product with tiny outlay...

also feel free to discuss opinions on the SEVS rule as a whole here, good and bad points of it... not just as a "reminisce over the 15 year rule" point... but more as a SEVS is here to stay, it's been here for years... how's it changed or changing the import industry since it's inception?

any light that can be shed on it by other users?

[Messiah]

i think maybe itemising could be the problem.

eg take a look at j-spec (to clarify i have no gripe i'm using them as they offer great depth of info on each car)

the give a total break down on costs.

eg....

450,000 JPY FOB

@ 81.64 yen bank rate

= AUD $5,512 FOB

AUD $1,656 shipping

~ 10x USD$75/m3 freight

~ $800 customs costs

AUD $276 import duty

$5,512 x 5% duty

AUD $678 GST

$5,512 + $1,270 x 10%

AUD $2,400 compliance

AUD $1,100 J-Spec fee

So we know that all but compliance and broker fee are static, they are set by business who dont care to haggle.

We deal with the brokers and ask them to find us good cars. so we tend to look after them and dont haggle there.

That leaves compliance.. the poor faceless man in the middle. Buys will do whatever they can to make a saving and they'll shop around here.

Maybe all brokers should agree to mask the aus side fees as a single Aus service fee. They can negociate an good price with their preferred workshop and factor it into their own bill.

It does require more trust form the buyer, but it should stop destructive bargain hunting. and should hopoefully allow the brokers and the raws shops to come to a mutually beneficial arrangement.

[C-Red]

Thats a really thoughtful post Mr Eps.

If I was being flippant I'd say the reason no-one has done late Soarers is they only made 4 of them, and 3 are already here.

The "can't you do it cheaper" mentality of a lot of import punters has soured the industry as a business for me. If I'm providing a service or a product at a reasonable cost then I dont expect to be lowballed or be whined at by the client, its just not cricket.

There is an awful lot to owning and running a RAWS workshop as anyone involved will tell you, audits, cubic amounts of paperwork etc etc. I think the service provided in compliance for a RAWS car is extremely good value for what is done these days.

Jash

[Iron Chef]

Maybe all brokers should agree to mask the aus side fees as a single Aus service fee. They can negociate an good price with their preferred workshop and factor it into their own bill.

It does require more trust form the buyer, but it should stop destructive bargain hunting. and should hopefully allow the brokers and the raws shops to come to a mutually beneficial arrangement.

I don't remember ever having crunched a workshop on price - there are times when I've gone with the workshop that quotes me a cheaper price in order to make my customer's budget doable, but in the end, without the workshops making money, I wouldn't have a job.

The problem with masking costs is that firstly, it goes against the whole premise of a broker, in that the process and the costs are transparent. The other is that having such a setup would also allow less scrupulous brokers to keep haggling and make more fat in the middle.

I think $3300 for every car would be far better for the industry.

[Chris Rogers]

parts are a breaking point on RAWS. think about it for a sec. if I had a Z11 Cube and wanted on the road cheaply would I pay for a set of cats ($2k new) or would I borrow a set clear the car then put the old one back on. same goes with tyres. I have a car here that went through a few weeks back and the tyres by rights should have been changed. they are marked 2007.

I had an instance with a chev blazer about 2-3 months back that had airbag issues. new module was $1k and the thing also needed brakes,suspension and a host of other things before it would clear the RAW. not sure what happened to it but I do believe it went somewhere else to be done because the RAW in question could not do the car for that price.

adding further to it are these guys that cut teh crap out of it and in teh end whilst they gain market share for 2-3 months it screws things for everyone else.

put simply there are those that give a shit and wont process a vehicle unless its done properly and those that do not care and are out to make a quick $.

my 2c from what I see here in brissy.

[Mr Eps]

Messiah - i disagree with your idea - not to shoot it down completely but to mask everything as an "aus wide fee" just further perpetuates the reason why (i beleive) customers DO try to screw down the price...

for instance - me as a customer, i look at the car in japan, i see it, i get it registed and in my ownership, and it looks no different on the surface - so i - as a customer - don't KNOW what i paid ~3 grand for... so i try to low ball the compliance workshop - because i don't know the intricacies of workmanship they perform...

...if you mask ALL fees... and just invoice the customer for 5/6 thousand dollars ... how does the customer know where that money's going? it's just perpetuating the problem

(that's what i think about it anyway)

i mean you gotta see this from an objective standpoint really - see it as someone who's giving money to a guy... not from someone that KNOWS the processes and the work needed etc... and i think that's where the problem stems from... lack of knowledge in what product we're receiving... if you MASK the fees more so... that creates an even bigger knowledge gap..

Jash - a few things... 1) where the heck have you been I haven't heard from / about / spoken in YEARS. haha, doubt you'd even remember me!

and - i think we've got mixed up... i'm after a series 3 soarer, single turbo JZZ30 VVTI bla bla bla.. can only be complied over east then transported to WA

fun times.

and you're on the right track, many RAWS workshops will be quick to say "think of the paper work we have to do, and the safety work we carry out" etc etc - i think maybe the customer would like to know exactly what this paperwork is, and what manual work is carried out on their car to make it driveable on our roads...

furthermore - if the paperwork, audits and legal side of things is so complicated... - -why? why is it made so difficult? is there any changes or process improvements to the system you would implement to make it easier on your jobs? or easier on your finances to help maximise your own profits? also... off topic but how many RAWS workshops are members of the Capricorn Society? do they help out with this style of work?

and Kris... i guess now that we've made a full "roundabout" to come to this conclusion... $3300 is a fair call for all cars YES... but what about us westerners where many of the more "exclusive" cars are not avail for compliance over here???

case in point, my soarer, must be complied over east then trasported over to WA... that alone is about $1300 cost, so if the compliance fee is exploded by a further $1100 that then means by the time i GET my soarer... i'd be looking at about 16/17 grand... for a car that's 11-15 years old... that's my perspective as a consumer...

so if you increase the costs further - would that squeeze many customers out of the market?

it's a tough situation... you increase the cost of imports to keep the industry happy... but also risk losing customer interest, you screw the price down on the industry... and customer interest increase (as much as customer interest CAN increase - importing will only EVER be a niche market) .... so is change to the system possible? are there costs we can minimise to make it affordable for customers but also sustainable for the industry???

ie; can we request to lower the taxation rates? (unlikely)

can we remove the GST which is charged on our tax? (unlikey being the GST is static)

surely someone must have an opinion on somebody who's finger is in the bowl taking more than their fair share...

[Mr Eps]

Ok, Chris...

excellent post! - but then... you just gave me a great example... the cat pipes for a Z11 Cube is $2000.

and that's the cost for the part alone. - why?

WHY is that piece of metal 2 thousand dollars... where is the part manufactured and what's so different about the japanese cat converter set?

i mean - kris... you ...or should i say... your COMPANY charge "around about" a grand... to hunt down a car, inspect the car, de-reg the car, trasport the car, organise shipping, see the car sent to a ship. ship the car to australia, organise customs, transport, compliance and all necessary towing... for a thousand dollars.

how is a piece of metal have twice the financial worth more than your service fee?

how is a piece of metal worth more than the profit a RAWS workshop will receive for their labour? or the money needed to pay their bills, staff, and loan repayments?

[Chris Rogers]

Ok, Chris...

excellent post! - but then... you just gave me a great example... the cat pipes for a Z11 Cube is $2000.

and that's the cost for the part alone. - why?

WHY is that piece of metal 2 thousand dollars... where is the part manufactured and what's so different about the japanese cat converter set?

i mean - kris... you ...or should i say... your COMPANY charge "around about" a grand... to hunt down a car, inspect the car, de-reg the car, trasport the car, organise shipping, see the car sent to a ship. ship the car to australia, organise customs, transport, compliance and all necessary towing... for a thousand dollars.

how is a piece of metal have twice the financial worth more than your service fee?

how is a piece of metal worth more than the profit a RAWS workshop will receive for their labour? or the money needed to pay their bills, staff, and loan repayments?

complaince of a car can't be shoehorned to a fixed cost. there are people in this game doing Z11s for $1600 and you wonder what has actualy been done. cats weren't tyres- probably not. oil changed - nup. filters - nup.

now to do it properly and take into acoount the labour portion of things that car would clear $12-1300 in parts and 10-12 hrs labour (@$110/hr) to clear/cert it. that would be a close figure for a GOOD car. the worst case woiuld be doing everything needed and the parts/labour cost go up further. (more wrong with it more time to fix it.)

as for the cost of parts. ask the dealerships. on a parallel vein I bring in a LOT of jdm only bits and those are not cheap to land. now you margin those to cover your own costs and you get a final fee. for that $2000 set of cats $1-150 of that would be a margin.

most of the RAWS I know use genuine parts (and I think its a requirement they do this.) and as such those are not cheap.

V series skylines - cats (2 of them) $1600 approx (my numbers may be out a notch but for arguments sake..) then you have the compliance kit, then full service. $3k would be a LOW starting figure to do this car. personally I would pay the money knowing that the car was done properly and it was safe for me to bolt my 2 y/olds kidseat into and it not come out in an accident. yes I have seen those done poorly as well.

so where to now:

why does every one lowball - hell if 90% of the people stopped this shit and stopped taking kickbacks (locally and ex japan) I think this industry may have a chance in surviving.

that said human nature does have a tendency to f**k shit up based on price....

[Messiah]

Its the above that makes me think that bundling the complience and broker fees together is a good idea, well maybe not good... but better.

Remember theres a difference between an enthusiast and yr average young'n who wants an import. the former will budget for and pay the cost of quality complience, to a point. the average mug however wont and will instead go to the raws that is looking to gain market share at all costs.

End result is, corners cut and quality raws start thinking about leaving. Education is only useful for those that care to start with.

I dont think my suggestion is that bad, and it wont lead to run away costs. Brokers will have their costs advertised for their vehicles, and the buyer can shop between brokers. fixing the price to 3200 per vehicle smells of price fixing, however justified it may be.

but brokers partnering up with preferred raws and offering packaged broker+complience fees could help cut down on the low balling as the respected brokers would always use their respected raws, and anyone with stupidly low package prices will suffer from both low margins and bad reputations, and they shouldnt last too long.

thats said. i always did suck and business studies

[Messiah]

I don't remember ever having crunched a workshop on price - there are times when I've gone with the workshop that quotes me a cheaper price in order to make my customer's budget doable, but in the end, without the workshops making money, I wouldn't have a job.

The problem with masking costs is that firstly, it goes against the whole premise of a broker, in that the process and the costs are transparent. The other is that having such a setup would also allow less scrupulous brokers to keep haggling and make more fat in the middle.

I think $3300 for every car would be far better for the industry.

Sorry kristian, i didnt mean to infer that you did crunch a workshop on price.

Instead i was suggesting negociating with a shop on an agreed standard price on a given vehicle assuming an acceptable car quality, with the aim of removing choice of raws from the customer whilst maintaining some for of self regulation on price.

[Iron Chef]

Sorry kristian, i didnt mean to infer that you did crunch a workshop on price.

Instead i was suggesting negociating with a shop on an agreed standard price on a given vehicle assuming an acceptable car quality, with the aim of removing choice of raws from the customer whilst maintaining some for of self regulation on price.

It's all good, I wasn't taking it that way. The point I'm making is that the industry is full of greedy people, for want of a better way of putting it. Say I bundle a compliance cost of $3300 together with my $1000 broker's fee, the customer then pays me that money, then I still tell the workshop "if you want my business, you have to do my compliance jobs for $2500", there are plenty of workshops who would be keen to do that because of the volume of cars I do, and then I could theoretically pocket that extra $800 every time I got a car complied there. In strict profit terms, I would end up making more money than the workshop, which is ridiculous.

There are a multitude of issues.

The first is that the general public just doesn't understand why compliance is so expensive. The costs aren't (just) because of the work that is being done, they are to recoup the costs of becoming a RAW and doing the relevant testing for that vehicle. A late model emissions test means shipping a car to Melbourne, and the test itself costs $20K, regardless of whether you pass or fail. In other words, you fail the test, it's another $20K you need to drop to get the car ready for compliance. Add to that the cost of purchasing the vehicle itself and having that money tied up for anywhere up to 12 months, and it's little wonder some workshops are saying $4400 minimum for compliance if they get plates for an all new model.

I'm a fairly loyal sort of person, and I tend to stick to the workshops that give my customers the best service over the ones that have the cheapest price. One particular Melbourne workshop I use gutted all their prices last year and I told them they were mad, they were getting my business anyway, so they didn't really need to reduce them.

I seriously despair at the state of the industry sometimes. Many workshops do excellent work, but they also suck when it comes to running a business and 'future-proofing'. A case in point was the Nissan Cube - the two things I said a few years back that could kill the industry would be 1) a crap exchange rate (happened after the GFC) and 2) fuel prices skyrocketing (happened just before the GFC). My reasoning for getting the Cube on SEVS was that if fuel gets too expensive, guys with Skylines will be looking for a funky buzz-box to use as a daily, then keep their GT-Rs for weekend-only use.

There are very few players in the industry prepared to lead the way and keep pushing ahead with getting plates for new models, and if no-one keeps getting new evidence packs done, then the import industry's long term future is pretty bleak.

You guys have given me some inspiration for my next HPI article haha

[STATUS]

wouldnt it be nice if we could just pay for the compliance then not let them fck up perfectley good cars with cheap shit cats, seat belts and generally poor workmanship.... thats my experience with alot of complianced cars that come through.

[funkymonkey]

wouldnt it be nice if we could just pay for the compliance then not let them fck up perfectley good cars with cheap shit cats, seat belts and generally poor workmanship.... thats my experience with alot of complianced cars that come through.

your gripe is with the ADRs, not with the RAWS that have to comply with them or risk losing their RAWS status.

[STATUS]

your gripe is with the ADRs, not with the RAWS that have to comply with them or risk losing their RAWS status.

my gripe is the quality of the work being done....

[Chris Rogers]

your gripe is with the ADRs, not with the RAWS that have to comply with them or risk losing their RAWS status.

not really. I have seen messes that would not pass if an inspector looked at them. electrical items that if left would cause fires. not sure what it falls under trade wise but some training I figure would help.

that said if all the people that got in for a quick buck would get out things might fix thenselves.

there was a rumor kicking around here that you could give someone a chassis number and $1500 and sight unseen you would have a plate for your car. probably good for volume car dealers but not good for safety as a whole.

there are the guys that do hold the inspectors in regard as they know they can be shut down fairly easily if they stuff up.

[sbyder]

my gripe is the quality of the work being done....

when you're paid shit all to comply a car, you can't afford to spend much time on a car or pay a mechanic a good wage to do so.

I take pride in my workshop and since i have started running it late last year i have had nothing but compliments about my workmanship.

There is a trade off though. For example I spend on average 5 hours complying an Evo 8, pulling the bumper off to convert the xenons to normal globes, pulling the rear seats out and fitting child restraints, doing the cat properly, etc...

If i was to do it dodgy and not bother with the xenon conversion and cat, then i could cut the time down to 2.5 hours and get 2 done in the same time frame. I could even cut it futher by not installing child restraints, which i know some workshops dont even bother doing!

I charge $2400 INC GST + tyres. The dodgy bloke could charge $1250 and make more in profit.

So the bloke that doesnt do anything by the book makes more money then me and gets away with not even complying a car properly. DOTARS are aware of these companies and are removing vehicle models from their schedules when they are inspected and found to be fraudulant, but 90% of them get away with it. Dotars must give 48 hours notice prior to a spot inspections, which gives the guy plenty of time to do the work proplerly.

I could make twice the money and do twice as many cars if i do things dodgy, but in the end, the guy with a family that buys the Evo with no child restraints and gets defected due to the xenons is going to wish he paid me the extra $'s to do the job legally.

Edited May 14, 2010 by sbyder

[z-240]

Guys - My two cents worth, I have been complying Japanese imports since 1997 in now two different Government systems.

Like the first system the RAWS system has headed in exactly the same direction. Which it was introduced not to do.

There is cut price compliance, no standards across all workshops & the industry is struggling to survive. I do not win business over the phone as every one who calls wants the best deal. I do the job correctly & do it well. I also itemise to clients the work carried out, which all are supposed to do. I have the attitude that it is worth doing correctly or not at all. The RAW is deemed to be the manufacturer of the vehicle once imported & responsible for it to meet ADR's & our approved evidence. We are responsible for ADR recall/changes for the next 10 years if they arise at our own expense. This happened with Soarer seat belts a few years back. Lets remember this is a specialist & enthusiasts scheme not a used car alternative. Some thing different that you can not buy here to sum it up. This option will disappear if shops like mine & others that do it right can not financially survive. The costs to be government licensed & ISO certified plus ongoing equipment requirements with calibration, (ask the shop if theirs are up to date) while giving compliance away at next to nothing is not smart economics. Would you work for nothing or going broke in your own business? I believe a lot of people think compliance shops are a Gold Mine in essence they are not, but we carry alot of responsibility to the end consumer, given we do our job correctly. With out compliance shops you can not bring in your import - food for thought. This is just a brief over view there is so much more. In conclusion it is up to the consumer to vote with your decision to use reputable RAWS shops (there are many)- we are like you trying to do the best we can. Craig

[Mr Eps]

this is an excellent thread... i'm impressed with all contributors to it...

and i'm glad kris has found some inspiration! i made this thread because it's obvious that the import industry is .... on the verge of going down the gurgler really... and nobody's actually done anything or worked out a plan to see through this storm...

the GFC of 2009 (and current) has brought this industry to it's knees, from all sides of it, however... to repair itself it's not as simple as "cutting costs" to keep the customer happy... because there isn't any profit for the businesses which support us... however if the businesses have it their way entirely... many of us on the customer end are squeezed out of a market...

it's a situation where nobody can be kept happy entirely.. we're all "hungry" to have it our way and nobody is willing to comprimise... so what's sustainable? or "future proof?"

realistically as kristian said .. paying 4 grand for compliance is definately future proof from an industry standpoint for sure...

however being from WA myself over here, i (again) have to pay about $1500 to get any car i desire sent from over east, because of WA's conservative and timid RAWS list of eligable cars...

so that's $6500 odd on compliance and trasport alone... not inclusive of tyres, or registration!

which in this case would squeeze me... with my current budget for a car out of a market... and i wouldn't be the only one in this boat!

most of the Z11 market would be removed from the market also... why do you think they're buying a Cube in the first place? part of it would be so that they can "drive something different" on a budget...

so there's two sides there... either compromise on profit... and risk sustainability for the industry in the (near) future... or maximise profits, guaranteeing the economical safety for the industry in the long term... but also removing a good 20-30% (guess) of the eligable market, causing more strain on the already difficult situation...

=|

my hair just went grey.. anyone else?

[z-240]

Fair enough, but it is not about profit for a work shop or just one vehicle to a customer- it is about sustainability of a system, with the work required actually being done! Not mentioned in the thread has been the enormous costs associated with each vehicle approval a RAW adds to its compliance schedule (and the time). We require volume to cover the out lays before profit can even be thought of. This is rarely met by any shop.

On a side note I have arranged sea freight from Brisbane to Fremantle @ $900 ro/ro.

[NISMO]

A question for the brokers,

Those that have been in it for a while, are volumes of imports coming down?

I ask because the most popular imports are easily now available here in Aus, with hundreds to choose from - skylines, supras etc etc, so i would think that the large selection of cars already here are more of an issue to sustainability than any cost associated issue will ever be.

The newer models eg V36 skylines, simply don't have the cult followings that the older turbo cars do and I don't think there will ever be the demand for these cars, regardless how much they come down in price.

Could be wrong though