State ESC law might block 8000 vehicles

A NEW Victorian law fast-tracking mandatory electronic stability control (ESC) for all new passenger cars and SUVs might block 8000 new vehicles a year from registration in the state from 2011.

The state legislation, which the nation’s top automotive industry group has described as unnecessary and duplicative, essentially mirrors a new federal design rule that will require all new vehicles except commercial vehicles to be fitted with ESC from November 1, 2013.

However, while the federal ESC Australian Design Rule (ADR) provides for a two-year honeymoon period in which only new-model passenger cars will require ESC from November 1, 2011, the Victorian legislation applies to all new passenger cars registered in Victoria from January 1, 2011 – almost three years earlier.

Official confirmation of the new Victorian law was revealed in a Melbourne newspaper advertisement on October 6 after just four of 27 submissions to the government supported the state’s proposed Road Safety (Vehicles) Amendment (Electronic Stability Control) Regulations 2009.

While the draft Victorian legislation was amended to exclude light commercial vehicles (LCVs), the new law requires all passenger vehicles and SUVs made (or first affixed with a compliance plate) on or after January 1, 2011, to be fitted with a compliant ESC system – 10 months before new models are required to do so by the federal ADR system.

The only exceptions are vehicles previously registered in another state for more than one year, or low-volume vehicles listed on the Specialist and Enthusiast Vehicles (SEVS) register.

Left: FCAI chief executive Andrew McKellar. Below: Victorian roads minister Tim Pallas.

More significantly, however, a press release issued the following day (October 7) by Victorian roads and ports minister Tim Pallas said: “The minister will be able to exempt certain vehicles that meet exceptional conditions from the mandatory regulations for up to 10 months or until 1 November, 2011.”

The peak industry bodies both in Australia and Victoria have sought clarification of which models may or may not be exempt from the new legislation, which could prevent most entry-level versions of many imported small cars from being sold in Victoria in little more than 12 months.

The Federal Chamber of Automotive Industries (FCAI) estimates that, based on current sales trends, up to 8000 vehicles could be affected, and has labelled the Victorian government’s new legislation as redundant.

“We are disappointed that the Victorian government has chosen to proceed along the track of a unique state-based registration requirement,” FCAI chief executive Andrew McKellar told GoAuto.

“It would be our observation that it is unnecessary, given that the industry has demonstrated a very strong take-up of this technology in the first place and that it overlaps and duplicates the impact of the new ADR which was finalised only a few months ago by the federal government.

“It is unnecessary and it will not lead to any improvement in road safety outcomes because it is entirely duplicative of the federal legislation.”

Mr Pallas said the compulsory fitment to all new cars but not LCVs of ESC, which research shows can reduce single-vehicle accidents by up to 29 per cent, in Victoria from 2011 would save lives.

“Road safety experts the world over acknowledge ESC technology as the most significant vehicle safety innovation since seatbelts,” he said. “Regulating for ESC is yet another world-leading and bold move from Victoria, similar to the introduction of compulsory seatbelts in the 1970s.

“The consultation process identified that the lead time for manufacturers to design, test and install ESC systems into light commercial vehicles was unreasonable.

“Recognising this, we consulted with the vehicle industry, amending the draft regulations to avoid adverse effects on Victorian manufacturers and dealers.

“In 2008 there were 120 deaths on Victorian roads involving run-off road crashes, including deadly rollovers. By making this active safety feature mandatory on new cars sold from January 2011, we expect many lives to be saved on our roads.”

Mr McKellar said the new state-based automotive design rule sets a precedent that challenges the established federal ADR system, despite the Victorian government’s consultation of industry groups.

“I do acknowledge that they did consult with us and we had discussions at the highest level – with the premier, with Mr Pallas, with (Victorian industry minister Martin) Pakula and I think those were full and open exchanges,” said Mr McKellar.

“We support the objective of enhanced road safety that the Victorian government is working towards, but unfortunately in this case there are more effective avenues that it could have pursued if it wished to improve road safety.

“The federal government is responsible for the regulation of vehicle design standards through the system of ADRs and unfortunately this does create a precedent and it directly undermines the ADR system.”

Mr McKellar added that the potential outlawing of a “handful” of vehicles did not justify the expense of a duplicate vehicle approval system.

“The main and only substantive difference (to the forthcoming federal ADR) is purely the timing in relation to January 1,” he said.

“Beyond that they have provided some level of exemption up until November 1, 2011. At the end of the day there will be a handful of models that will be potentially excluded from the Victorian market.

“But given that that is the likely outcome, one would have to question why you would go to the trouble and expense of setting up a completely parallel compliance regime when you’re only in practice going to exclude a few vehicles.”

Mr McKellar said the $5.80 processing fee (excluding fitting costs) to be charged by the Victorian government for each vehicle either approved or exempted under the new legislation was not cost-effective, relative to the similar fee charged for the federal ADR process that covers more than 80 design rules.

“It will lead to higher costs for industry, higher costs for motorists and it will be totally redundant by 2013 – if not earlier,” he said.

“We question the need to go through the process of setting up an entirely new compliance regime at a cost of, as we understand it, $5.80 per vehicle just for the certification.

“It costs us a similar amount per vehicle to achieve certification against more than 80 ADRs. The Victorian government is administering one regulation and they’re charging basically the same amount. It’s more than 80 times more expensive on a comparative basis than the ADR system.

“It is not cost effective and we can’t see the justification for it.”

The state’s top industry body, the Victorian Automobile Chamber of Commerce, has joined the FCAI in calling for clarification of potential exemptions to the new legislation, which it labels as confusing and inconsistent.

VACC senior manager of government and public affairs David Russell said the VACC supported any initiative to improve vehicle safety and to reduce the road toll.

“However, VACC is concerned about the ‘go-it-alone’ strategy of the Brumby government,” He said. “We feel it will cause confusion, inconsistencies and loopholes. There are likely to be impacts on manufacturers, dealers and consumers.

“The minister has exempt light commercial vehicles from the requirements and will be able to exempt certain vehicles that meet exceptional conditions from the mandatory regulations, but we would like clarity regarding the regulatory details for those exemptions.

“Manufacturers will be affected because they plan models years in advance. They are global operators and will not be able to amend their plans solely for the Victorian market and for a 10-month period. That means certain makes and models simply will not be available for sale in this state.

“It is not too late for the Victorian government to reconsider the impact of these regulations on the state’s economy and on the implications for manufacturers, retailers and consumers.”

To sell vehicles without ESC in Victoria in the 10-month period between January and November 2011, car companies must obtain an exemption from the government and apply a label on those vehicles that states they are not compliant. Beyond November 2011 they will either have to comply or they will be excluded from registration.

Under the new legislation, cars will need to have a Victorian certification plate in addition to the federal ADR plate, while exempt vehicles will need to display a label deeming them ‘fit for registration’.

“I think the issue that we have great difficulty with is that you’ll have some models that will be fully compliant with all the requirements of the ADRs being allowed to be imported, registered and driven in every other state,” said Mr McKellar.

“In fact, they will be allowed to be driven in Victoria but not allowed to be registered there. If they haven’t been registered for more than 12 months then they’ll face the same problem.

“So if somebody buys a vehicle that doesn’t meet the requirements and six months later they move to Victoria then it looks to me like they’ve got a problem. But that doesn’t stop somebody who lives in Sydney or Adelaide driving around the streets of Melbourne in a vehicle that doesn’t comply.

“Is totally unsatisfactory and makes a mockery of the ADR system. We are concerned that that is an untenable situation and we’ll have to contemplate where we go from here.”

Some industry observers told GoAuto that car companies could employ a number of measures to short-circuit the new legislation unless the Victorian government overturns it or the federal government forces it to under Section 51 of the Australian Constitution, which is unlikely given both governments are current Labor party-led.

They include stockpiling of pre-2011-complianced vehicles and despecifying upstream models fitted with ESC to maintain the vehicle’s current price point. For example, Toyota could choose to import only premium versions of its Yaris light car, which recently became available with ESC for the first time, but remove other top-shelf items to compensate, such as alloy wheels.

Mr McKellar criticised the Victorian legislation’s exemption of vehicles listed on the SEVS register, which includes a range of imported Japanese sportscars such as Nissan’s previous-generation Skyline GT-R.

“Under this regulation, vehicles like that will not be required to have ESC fitted or to go through the compliance regime even if they do have it fitted,” he said.

“Moreover, they will not be required to place any notification on the vehicle that they don’t comply. In contrast with a range of new models which are brought in by full-volume vehicles, some of these used Japanese vehicles end up as street racer vehicles driven by young drivers which we see all too frequently in the media with serious accidents and injuries.

“They are given a complete free pass under these regulations, yet vehicles that are fully compliant with ADRs but are not fitted with ESC … some of those will excluded from registration in Victoria.

“So why is it that we have that exclusion for vehicles which from a road safety point of view are highly dubious.”

Mr McKellar welcomed the exclusion of LCVs from the Victorian ESC legislation, a move he said was in line with both Australian and European design rules.

“Currently the new ADR doesn’t extend to light commercial vehicles, but the federal government has made it very clear that it will. They are working to finalise the timetable for that to occur and I expect that to be resolved shortly.

“The industry supports the expansion of the ADR to include LCVs – let’s be very clear on that – but because of the various production requirements and compliance requirements in terms of where we are sourcing vehicles from, we have to look to align to other international timetables in that regard.

“The federal government is consulting with a range of stakeholders to determine what the appropriate timing for the ADR to be expanded to include LCVs.

“The Victorian government has practically recognised the very same difficulties that the Australian government recognised in its federal ADR. Sensibly, they moved to exclude them from this new regulation,” he said.

A spokesman for Mr Pallas told GoAuto that an exemption may be granted for particular models if the manufacturer could demonstrate a serious adverse effect (such as financial hardship) on the manufacturer or dealers in Victoria.

The manufacturer would have to ensure that the vehicle model will have ESC available by November 1 2011, when the equivalent national regulations were implemented for new models.

"If an exemption is granted, manufacturers and dealers must display a noticeon the vehicle advising potential buyers that the vehicle is exempt fromthe regulations," the spokesman said.