SYDNEY – An organization representing automobile drivers in Australia called Wednesday for an end to the country’s 5 percent tariffs on new imported vehicles, citing the fact that domestic auto production is due to cease by 2018.
“If tariffs were designed to help protect the local industry, then there is no longer any justification to maintain them,” said Andrew McKellar, chief executive of the Australian Automobile Association.
The AAA’s request came after Toyota Motor Corp. said Monday it will halt vehicle production in Australia by the end of 2017.
With U.S. auto giants Ford Motor Co. and General Motors Co. having already announced their plans to withdraw production from Australia, Toyota’s retreat signals the end, from 2018, of vehicle production in the country.
At present, 90 percent of new vehicles sold in Australia are shipped from abroad, and domestically made autos account for only 10 percent of the total.
The removal of tariffs could save the average new car buyer between 1,000 and 2,000 Australian dollars on the cost of a vehicle, McKellar said.
Abolition of the tariffs is expected to spur negotiations between Japan and Australia on an economic partnership agreement.
Australia’s tariffs on imported vehicles and Japan’s levies on beef imports have been major obstacles in the bilateral talks thus far. The focus will now shift to how much concession Japan would be able to make over a requested cut in the beef tariffs.
Besides the 5 percent tariffs on new vehicles, Australia currently imposes a special tariff of AU$12,000 on each imported used vehicle.
The business community hopes that tariff abolition will lower vehicle prices in Australia and act as a catalyst for auto sales countrywide.