WEDNESDAY 14 APRIL 1999

MR IAN TAY, MR KEVIN NEESAN and MR ROLAND DANE

  123.  We work on the basis that the person in the middle usually introduces the others, so, Mr Tay, would you like to introduce your colleagues and yourself as well, please?
  (Mr Tay) My name is Ian Tay, I represent the API, the Association of Parallel Importers, principally on the motorcycle side. My colleague on the right is Kevin Neesan who is also a member of the Association of Parallel Importers and is a large motorcycle retailer in Stoke-on-Trent. On my left is Mr Roland Dane who represents BIMTA, the British Independent Motor Trade Association, and also runs an importer dealership in Alton in Hampshire. Really we are here to help tell you about parallel trading on two wheels and four wheels, so whichever comes first.

  124.  Can we just start on standards and safety. It has been suggested that there is no marked difference between the parallel imports and the other vehicles. Surely, however, there must be some difference between bikes supplied by official and unofficial dealerships. How do bikes differ? What is the difference between the UK national standards and, for example, the MCI state that motorcycles that do not comply with UK national standards are in breach of the law? There seem to be two distinctly different views here. Do you have any objective evidence to suggest that the differing positions are supportable?
  (Mr Tay) Yes, we do have evidence. We have an unusual situation here where some of the Japanese manufacturers oversupply product specifically for the United Kingdom market that comes into this country with a label on it that says "UK". Therefore, what the official importers try and do is blacken some of this product and in fact try and deny some of it, but undeniably, indisputably, the label comes into it with "UK" on it. There is, of course, other product that goes to other markets, principally America, which is a big market, and generally Europe as a whole, the difference for them being they drive on the other side of the road from us. There are three specific markets. I think it is foolish of them to be bad mouthing their own product.

  125.  In relation to the safety standards in Japan, in the UK and in the US, or in the European Union and the US, how big is the difference between them? What form do these differences take?
  (Mr Tay) I think it is very similar frankly throughout the world. If you took your car and drove it in Japan or in America or in France there is not a significant difference. There will be minor technical differences that each country has but I do not think that you are going to be a danger to yourself or to anybody else. I feel the manufacturers have used this to justify different pricing in different markets throughout the world.

  126.  It has been suggested to us that there is in the motor cycling fraternity an element of the anorak in the sense that they can strip their bikes down, they can do their own maintenance to an extent, they are enthusiasts. If you were putting yourself in that grouping would you say that if you stripped down a bike there would be much difference between an imported one and—
  (Mr Neesan) The bikes in many cases are absolutely identical, there is not a single difference whatsoever. To say that there can be a lower safety standard or to suggest that a Japanese factory would want to send a dangerous motorcycle to Germany but would only want to send safe ones to England is ludicrous.

  127.  Let us say that I have a motorbike, I want it serviced, I take it along to the lad at the end of the road who does motorcycles, who has not necessarily got a brand badge on his window but who can deal with most bikes, he would have no difficulty in dealing with a parallel import?
  (Mr Neesan) The bike is identical. If he can service an English one, he can service an imported one.

  128.  As far as BIMTA are concerned, where do they source most of their cars, is it in the EU or is it outside of the EU?
  (Mr Dane) It is a mixture of both. We have members who specifically import from the European Union and we have others who specifically import from other right-hand drive markets, of which Japan is the most important because it is the biggest right-hand drive market in the world, and contrary to popular belief amongst some exporters it has a very low tax on cars there which does not differentiate between the source, so that makes them easy to transfer out of the Japanese market to other places when they are used. We source from basically wherever we can get the product but because of the lack of right-hand drive markets in Europe we are forced often to go outside Europe.

  129.  What about India, is that a factor?
  (Mr Dane) No. There have been some cars recently that have come from India. They have been Mercedes Benz products which have been assembled in India but that has really been a one-off purchase of vehicles that were originally destined for the Malaysian airport project last year and for one reason or another they did not take them. As a rule India is not a source of product to come here.

  130.  What about the safety question? You have said that you can get them from Japan but what is the difference in safety? We know that there are considerations about kilometres and the question about speedos and obviously the odometer does give you a problem. Putting that issue aside, what about other matters regarding safety and maintenance, supplies, spares, etc?
  (Mr Dane) General safety legislation is actually remarkably similar between Japan and Europe. Where Japan, for instance, does not yet have side impact rules and standards, the reality is that every new product that is coming on to the market in Japan does meet side impact requirements which they do not yet have because of the globalisation of the market and the fact that they want to make their cars as common as possible for all markets. So more and more the cars are being built to the same standard, not just for the UK and Japanese markets but if they are going to Australia, if they are going to New Zealand, etc. There is a remarkable similarity now in the standards. What I would say on that is that for the last two years we have fought very hard to try to persuade the previous government, where we got nowhere, and this government, where we thought we had got somewhere but we are now finding it tough going, to get them to make the Single Vehicle Approval system available to everyone instead of the first 50 people off the street with each model so that people can feel that the car has been tested to an acceptable standard and that is good for the consumer, it is good for the insurance companies, it is good for the finance companies, it is good for everyone. That, in fact, would help reassure people where they are not sure of the standards that a car was built to in the first place.

  131.  Would it be right to say that all cars meet the ECE standards nowadays?
  (Mr Dane) No, not all the cars that are coming in at the moment would meet those. Because some of the cars are coming in as personal imports at the moment if they are over three years old they are only tested to MOT standard, that is one of the things that we would like to see stopped. We would like to see the opening up of the SVA system and making it available to everyone, both end users and dealers, so that the cars can be tested to be equivalent to ECE standards. That is something that we have been pushing for since 1997.

  132.  One last point. What about recalls for bikes and cars? People who are not part of the charmed circle, how do they get information of this, how can they deal with it?
  (Mr Dane) As far as cars go, the real problem is cars that are coming in from the Japanese market and keeping tabs on those as far as recalls are concerned. Within Europe it should be available and known and publicised by the official importers or the manufacturers. As far as the Japanese recall system goes, there is a very, very clear system on the Internet with the Japanese Ministry of Transport who make the information available, it has got to be by law, publicised for each and every recall that affects a Japanese home market car. This information is already used in New Zealand. We are working with the DETR and DVLA to use that information ourselves here and to make that information available to everyone. Furthermore, there is, of course, the information on every chassis number of every parallel or grey market vehicle that is registered here, it does go to the official importer of that make and if they had the will when they saw a model that they were not importing themselves they could inform HQ in Japan and tell them to notify them of any recalls. The reality is only one of them does that.

  133.  Which one is that?
  (Mr Dane) Honda. We have had recall information come through the system. Despite the fact that Honda do not wish to help us sell any more grey market or parallel market cars they are keen to make sure the recall work is carried out where necessary.
  (Mr Neesan) For motorcycles it is different because the product we sell is identical so there is not a problem of recall as the DVLA can notify, there are press releases, etc., and also our suppliers are quite capable of telling us of a recall and we are quite capable of getting into contact with our customers. It has never been a problem at all.

  134.  Going to grey imports, the RAC have noted in their evidence to us that many consumers are unaware that they are buying vehicles of a non-EU specification and that the grey imports are sold as vehicles meeting EU specification. Are there procedures in place to ensure that customers know what they are getting?
  (Mr Neesan) Certainly with us as a retailer we actually advertise the fact that we are independent. I think the biggest culprits for actually selling bikes are the franchise dealer networks. For years they have sold these bikes at full list price being parallel imported. Honda, etc., turned a blind eye to it when it suited them and allowed these people to sell these bikes and then the customer really has been deceived because he is going to a franchise dealer with their product name above the door and he is buying one of these bikes at full price.
  (Mr Tay) I think the customer is fairly adequately covered by the Sale of Goods Act and protection already. Whatever contract he arranges with his dealership, if he is misled then he benefits from any of the remedies in law. I do not think that is as much of a problem as the organisations make out. Undoubtedly some dealers do mislead some people, it is a fact of life, but I do not think grey or parallel dealers are any worse than authorised or franchised dealers. I do not think it is a major problem.
  (Mr Dane) Can I just give a car perspective on that. We have been working with the DVLA to try and ensure that it is not a problem. It is not a problem for the first buyer of a parallel or grey market car because they are in all instances aware of what they are buying, but further down the line there are two things which we are aware of and trying to do something about. One is putting that information on to the V5 registration document so that it is clearly apparent to a user down the road that this vehicle was tested to a Single Vehicle Approval standard and that it was imported by an independent importer. That is going on and that is already happening. It is not happening consistently but it will happen consistently. So there should be no reason why they do not know and they can then ask questions. The other thing is there have been some instances of people, including some of our own members, describing cars which are very, very similar, and in fact in some cases the same except for a badge, as a car which is with a badge that is put on in the UK whereas it may be sold in Germany or Japan or whatever with a different badge. If I can cite, for instance, Mitsubishi Shogun, Shogun is a name that is only used in the UK, in Europe and the rest of the world it is called a Pajero. We have been adamant with our members and stamped on it hard that if it is a Pajero when it comes to them it stays a Pajero, it does not become a Shogun. That is something to do with trademark law as well as deception. That point should be very, very clearly made. We support any actions against anyone who does not make it clear. We think long-term down the road that the proper information on the V5 will make it apparent to the consumer so that the consumer can ask the questions, should they so wish, later on.

  135.  What you have just said about the V5, the Retail Motor Industry Federation has suggested a grey import tag, is that what you are talking about so the information is there?
  (Mr Dane) Not so much a tag as putting on there the information because what is important is the information, not trying to dress it up as something that it may or may not be. The important thing is to have the information on there so that people can refer back to it in future.

  136.  Mr Neesan, can I just get a point clear. I may have got you wrong but you said that dealers were buying from parallel traders and selling them under their own franchise, did I understand you correctly?
  (Mr Neesan) Yes, that is absolutely correct.

  137.  That is quite a serious charge you are making.
  (Mr Neesan) We have evidence to support it. In the litigation that is going on at the moment one of the bikes that one of our colleagues has been sued for was actually sold to a Honda franchise dealer.
  (Mr Dane) I would also like to make the point that there are plenty of franchised car dealers in the UK now who are selling cars that they have bought on the parallel or grey market, call it what you will. I am not saying that they are selling them under anything other than those guises but they are selling them alongside their own UK sourced product and as such they may well be able to get more from the consumer than one of our members can for the car because it is sitting alongside another range of UK products.

  138.  Can we move on to spare parts lists. Motorcycle manufacturers have stated that the lists that are available in Japan and in the United States are not necessarily available for certain models in certain EU countries. What is your view about that?
  (Mr Neesan) The majority of the bikes we sell are identical. If I sell you, for example, a Honda Fireblade, you can go to any Honda dealer in the country and buy exactly the same parts for that bike.

  139.  So there is no problem at all?
  (Mr Neesan) No problem whatsoever.