SEMA News—April 2011

Developments Around the World

EUROPEAN UNION

An Imperfect Union

		The Australian Automotive Aftermarket Association (AAAA) has gathered more than 30,000 surveys regarding an Australian federal government proposal to severely restrict the use of traditional metal and alloy bull bars (also known as “roo bars”) through the adoption of a European directive that has already pulled most bull bars off vehicles in Europe.

Industry sources are reporting that a two-year-old regulation supported by the specialty-equipment industry is helping, but that problems still exist. The law was designed to ease restrictions on the sale of products, including automotive accessories and performance equipment, within Europe. Regulation (EC) No 764/2008, as it’s officially known, is designed to enhance trade among the 27 European Union (EU) countries as called for in the Treaty on the Functioning of the European Union upon the founding of the EU. The legally binding document obliges member states to accept products lawfully marketed in other member states.

These regulations were enacted in recognition that this principle was not fully operational. Local governments were too often invoking what was to be a limited exemption in the case of public security, or sometimes without giving any reason at all. The European Parliament and European Council now explicitly restrict the ability of local governments to utilize national technical rules to stop the sales of specialty and other manufactured goods. EU officials transferred the burden of proof regarding the products’ safety or environmental risk to the government, rather than the company. Moreover, a member state bears the burden of proof that the stated aim cannot be achieved by any other less restrictive means.

For the most part, the sale and marketing of specialty products are taking place without barriers. However, it has been reported that national governments are nevertheless hampering the growth of the specialty market in this densely populated region of 501 million people by denying consumers the ability to legally use aftermarket products. Specifically, motorists are reporting difficulties at times in obtaining needed approvals to legally drive on European roads due to the presence of specialty products. These approvals must show that all modifications were made legally. The registration papers, therefore, must match all of the changes made to the vehicles.

			Executive Summary: Global Regulations Update For the most part, sales of specialty products are taking place in Europe without barriers. Some problems being encountered in Austria, Germany, Italy and Spain. SEMA working closely with European Tuning Organization to address these issues. New European tire rating system will not affect pre-’90 vehicles. Use of protective “bull bars” under attack in Australia, and strict penalties are enacted for drivers with multiple moving violations. Indonesian language to be affixed to a wide array of products sold in that country.

Among the countries in which consumers are reporting problems to date are Austria, Germany, Italy and Spain. Motorists in each of these markets are required to update their registration papers to reflect modifications, and these revised papers are being denied specifically because the product has not been tested to local regulations. The European Commission has agreed to review several of these cases, and another case is being heard in the German courts.

In an update to a previous SEMA News article, a consumer facing difficulty in obtaining revised motorcycle registration papers due to the installation of carbon-fiber wheels that already appear legally in the United Kingdom market is stuck in appeal. Local authorities are fighting a lower-court ruling that favored the consumer, noting that the state had not provided proof that the product was dangerous and, thus, should be banned. The court said, in part, “The long-lasting, unproblematic and accident-free use in Great Britain and the Netherlands in public road traffic and at international motorcycle racing makes such proof unlikely.” Ludwigsburg, Germany, officials are appealing the ruling, and SEMA is working closely with the German association VDAT (Verband Deutscher Automobil Tuner) and the European Tuning Organization in order to address these issues.

Tire Labeling Comes Into Force in 2012; Vintage Tires Exempted

		Tires for pre-’90 vehicles are exempted from upcoming new labeling requirements (for fuel efficiency, wet grip and external rolling noise) that are slated to take effect in November 2012. Tires sold in Europe will be rated from A to G—a classification system that is used on European energy labels in a wide range of applications ranging from appliances to buildings and aircraft.

Tires for pre-’90 vehicles are exempted from upcoming new labeling requirements (for fuel efficiency, wet grip and external rolling noise) that are slated to take effect in November 2012. Tires sold in Europe will be rated from A to G—a classification system that is used on European energy labels in a wide range of applications ranging from appliances to buildings and aircraft. The regulations were developed as part of the efficiency action plan (COM, 2006, 545), which seeks a 20% reduction in the total energy consumption of the European Union by 2020. Tire makers are being “encouraged” to comply with the regulation before its formal introduction in 2012. Racing/sports tires are also exempted from these new requirements.

EU Restrictions on the Sale of Chemicals

Manufacturers and importers of automotive products sold in the European market are required to ensure that their products comply with the Registration, Evaluation and Authorization of Chemicals Regulation (REACH; European Regulation EC 1907/2005). REACH requires companies to gather and report information on the covered chemical substances to the European Chemicals Agency. The reporting requirement generally applies to those using more than one ton of these hazardous chemicals in the production of their products each year, and covered substances intended to be released under normal use.

A guide has been published by the European car manufacturer’s association providing information specific to the automotive industry. The document is available online at http://tinyurl.com/acea-be. Among the key points noted in the guide are that raw materials used in paints, rubber, adhesive, etc., should be registered independent of when or who added them to the product and that non-EU companies have no obligation under REACH. Compliance with REACH must be ensured by each company’s EU importers. Non-EU companies should provide the necessary information in order to allow importers to fulfill
their obligation.

Brakes

A working group on brakes and running gear for the United Nations Economic Commission for Europe (UNECE) is working on a new regulation on replacement brakes. The UNECE, established in 1947 to encourage economic cooperation among its member states, is one of five regional commissions under the administrative direction of United Nations headquarters. Specialty brakes of a different size from the OE brakes are not covered under this proposal. However, there is a concern that countries which do not already require extensive testing by outside testing agencies (only a few nations, including Germany, Switzerland and Spain, already require such testing), may begin to require manufacturers of specialty brakes to undertake the same extensive tests that will be newly imposed on replacement brakes, even though specialty brakes are not covered in the regulation under consideration.

Germany Votes to End National Approval System

The German Parliament has voted to eliminate the so-called Teilegutachten, which loosely translates as “parts approval certificate.” The Teilegutachten has been the preferred approval route for many companies due to lower costs and quicker approval time than the so-called Allgemeine Betriebserlaubnis (ABE) system. While both systems involve the same tests, the ABE involves a three- to six-month approval process, with the approval being granted directly from the German Federal Office for Motor Traffic (KBA) and involving additional paper work and cost. Under the Teilegutachten system, private testing agencies can grant approvals in only days. The ABE system also requires that companies be evaluated and approved by the KBA before being allowed to apply for product approval.

The decision to eliminate the Teilegutachten occurred without discussion and without an impact-assessment test. The vote to cancel the Teilegutachten was reportedly buried in a larger bill without adequate discussion or information to allow legislators to make an informed decision. As it turns out, the KBA is unable to handle the increased load of new verifications. Complicating the elimination of the private-agency approval process is the fact that some products, such as wheels and suspension, can only be approved through the Teilegutachten. For now, the current dual approval process remains in effect.

Spain: Virtually All Specialty Product Approvals on Hold

The Spanish government has issued a requirement that testing services must ensure that all products they seek to approve comply with European directives. This new guideline has generated confusion in the market due to the fact that European-wide directives do not exist for most products, and that subjecting aftermarket products to the same testing required for whole-vehicle-type approvals would be cost-prohibitive. Under these guidelines, the typical fee for approvals that consumers must obtain to ensure fitment of a suspension/lift modification would rise from approximately 200 euro ($271 USD) up to 1,500 euro ($2,032 USD). The new guidelines note that testing services issuing a compliance statement without having actually done the EU-type approval test could be held liable in case of a problem.

AUSTRALIA

Western Australian Authorities Back Away From Independent Aftermarket-Only Engine-Testing Requirements

In another Australian Automotive Aftermarket Association (AAAA) industry-led victory, the Western Australia (WA) Department of Transport has decided to abandon, at least temporarily, mandatory IM240 testing for engines that have been “significantly” modified. The AAAA is the national industry association representing manufacturers, distributors, wholesalers, importers and retailers of automotive parts, accessories, tools and equipment. The industry had complained that requiring the IM240 test would have resulted in high compliance costs and that the proposal would have unfairly targeted the aftermarket because OEM-branded parts would have been exempt. Alastair Bryant of the WA Department of Transport confirmed that the policy relating to the emissions testing of modified vehicles will revert to the policy prior to the April 2009 implementation of IM240 testing requirements. Discussions are continuing with the WA Department of Transport to outline guidelines for 5-gas analyzer testing. IM240 will still be an accepted test procedure, but will no longer be mandated.

Update on NSW Anti-Hoon Proposal: Suspension Restrictions Suspended for Now

New South Wales (NSW) is pressing the national government to impose restrictions on suspension upgrades. The move is apparently an abrupt change in strategy for the NSW Ministry of Transport, which unsuccessfully sought to impose draconian state restrictions on lift or lowering kits in the face of strong opposition. The AAAA led the opposition to a July 2009 NSW proposal to limit the raising or lowering of vehicle suspensions to no more than 5 cm (2 in.), with all modifications needing engineering approval.

“I don’t want to see young hoons [a derogatory term used in Australia and New Zealand to refer to a younger person who engages in loutish, anti-social behavior] putting their lives or the lives of others at risk just because they think their car looks better 15 cm closer to the ground,” said Minister of Transport Michael Daley in a press release. “These hoons may think their car looks cool, but as far as I’m concerned, anything more than a 5-cm change in a car’s suspension is dangerous and doesn’t belong on our roads. Raising or lowering a vehicle’s height can put the driver, passengers and other road users at risk.”

Vehicles can currently be raised or lowered by up to 5 cm without approval and by up to 15 cm (5.9 in.) with outside engineering approval. NSW had been meeting with an industry working group of suspension manufacturers and industry associations, including the AAAA, that convened to provide input on the proposed measures. A recent meeting of the group discussing changes to what had officially been called Vehicle Standards Information -50 (VSI-50) was cancelled at short notice, and the Minister for Roads asked the appropriate national body to achieve an agreed national position on raising and lowering vehicles. AAAA is reporting that the VSI 50 proposal will be addressed at an upcoming joint meeting of Transport and Road Departmental Heads, although a pending state election in NSW is expected to unseat the current government and thus halting
these deliberations.

National Vehicle Crushing Scheme Abandoned

Australian Prime Minister Julia Gillard recently announced the abandonment of an AAAA-opposed nationwide “cash for clunkers” program. The program would have provided Australians with a $2,000 payment ($1,993 USD) for trading in pre-’95 cars for new vehicles, even though the Australian Department of Environment determined in September 2009 that “replacing older vehicles with newer vehicles, without significant changes in the mix of vehicle sizes, engine capacities or fuel types, would not result in significant greenhouse gas emissions benefits.” The administration of Prime Minister Julia Gillard continued to push through the $430 million ($428 million USD) initiative, which has been coined the Cleaner Car Rebate Scheme. It originated as a campaign pledge that Gillard promised would result in taking 200,000 older vehicles off Australian streets. The growing opposition to the scheme, which was due to begin in January 2011 and was then delayed to July of this year, was finally killed. Australia’s executive blamed the program’s demise on the lack of funds due to the recent severe flooding in the country.

Three Strikes and You Are Crushed

While the nationwide “cash for clunkers” program was recently set aside, cars are still being crushed under a series of state programs that punish motorists guilty of multiple moving violations with the confiscation of vehicles. Under the so-called anti-hoon laws, first-time offenses warrant a 48-hour confiscation, with three months for a second offense. Drivers risk the vehicle being crushed or sold for a third offense.

More than 11,370 cars—an average of 10 per day—have been impounded in the Australian state of Victoria through July 2010 under the four-year-old program. The state’s Justice Department website provides a broad range of examples of actions that would qualify as hooning, including everything from intentionally causing tires to lose traction and causing a vehicle to make excessive noise or smoke to exceeding the speed limit by 45 kmh (28 mph) or more or traveling at more than 145 kmh (90 mph) in a 110-kmh zone (68 mph). Street racing and driving without a valid license also constitute hooning, according to the site.

		Officials in the Australian state of Victoria recently crushed a vehicle owned by a driver with three “infractions.” The government stated that the Holden Commodore it crushed was the first of 40 in the pipeline to face a similar fate. Under the so-called anti-hoon laws, first-time offenses warrant a 48-hour confiscation, three months for a second offense and drivers with three offenses risk the vehicle being crushed or sold.

The government crushed a vehicle owned by a driver with three infractions, attracting widespread media coverage. The government stated that the Holden Commodore it crushed was the first of 40 in the pipeline to face a similar fate. As to whether the vehicle of a three-time offender would be sold or crushed, Victoria Police Commissioner Ken Lay was quoted in July 2010 in press coverage of the vehicle crushing.

“If we permanently seize a vehicle that is not of a high safety standard, in that it doesn’t have features such as ABS brakes and airbags, I cannot, in good conscience, send that vehicle back into the community,” Lay said.

In the spirited 2010 elections for Premier (the highest elected office in the state), opposition candidate Ted Baillieu singled out the anti-hooning law as being too lenient. He called for increasing the penalty for a first offense to 30 days. Ballilieu won the election in late November. Each of the other Australian states now has its own anti-hoon laws, with all calling for impoundment as a central feature of the program.

Steel and Alloy Bull Bars Being Relegated to Museums?

The AAAA has gathered more than 30,000 surveys regarding an Australian federal government proposal to severely restrict the use of traditional metal and alloy bull bars (also known as “roo bars”) through the adoption of a European directive that has already pulled most bull bars off vehicles in Europe. The Australian government has given the public until April 15, 2011, to submit comments on the proposed adoption of the UNECE-approved regulation governing the design and safety performance of vehicles that come into contact with pedestrians, despite the fact that the Australian Transport Safety Bureau is on record as stating that “there is a dearth of scientifically based studies of the effect of bull bars on road safety.” The government continues to look into the adoption, which requires that all products affixed to the front of passenger cars be required to meet pedestrian safety criteria, which would be administered via the Australian Design Rule process. The imposition of this directive in Europe has eliminated nearly all traditional steel and alloy bull bars. Only a small percentage of bull bars are now being installed, some as smaller nudge bars and some as plastic bars.

The AAAA is fighting the proposal, which it believes is ill-suited to its market and could spell the end of steel and alloy bull bars in the country. Through its 4WD Industry Council, the association has been consulting closely with the government via a bull bar sub-committee.

		Manufacturers and importers of automotive products sold in the European market are required to ensure that their products comply with the Registration, Evaluation and Authorization of Chemicals Regulation (REACH; European Regulation EC 1907/2005). REACH requires companies to gather and report information on the covered chemical substances to the European Chemicals Agency. The “Automotive Industry Guideline on REACH” guide, published by the European car manufacturer’s association, provides information specific to the automotive industry.

“Australian driving conditions vary enormously from European conditions,” said AAAA Executive Director Stuart Charity, making particular note of the physical and weather environment, the increasing incidents of large native animals on urban roads and the level and concentration of built-up areas in Europe compared to Australia. “These factors all make Australia a unique driving environment. In our part of the world, bull bars are designed to save the lives of the drivers and passengers of the vehicle.”

New Regulations Blocking Importation of Modified Pre-’89 Vehicles

The Australian government has recently changed its laws regarding the importation of pre-’89 cars. According to the Australian Hot Rod Association, these changes were made without consultation with industry. Specifically, modified vehicles are now required to comply with all regulations in place when the vehicle was modified rather being assigned the same model-year designation as the production vehicle it most closely resembles. On the government website, the government uses the example of a replica Shelby Cobra. “A replica/hot-rod vehicle’s date of manufacture is taken from when the vehicle is complete, e.g., a replica ’64 Shelby Cobra completed in 2004 would be regarded as being a year of manufacture of 2004,” the site says.

INDONESIA

How Do You Say That in Indonesian?

Before they can send shipments to their customers in Indonesia, companies are now required to develop a special label in the Indonesian language, which then has to be approved by the Indonesian government, The new regulation requires all goods manufactured or imported into Indonesia to be affixed with pre-approved Indonesian-language labels prior to entry into the customs area in Indonesia. The Ministry of Trade of the Republic of Indonesia issued the labeling regulation as no. 22/M-DAG/PER/5/2010. It applies from September 1, 2010, for new products and provides an 18-month transitional period for goods that were circulating in the market before the regulation was enacted. The local manufacturers’ associations have come out in strong support of the new labeling requirements, with the deputy chairman of the Indonesian Automotive Industry Association, Jongkie D. Sugiarto, being quoted in a recent article in the Jakarta Post that the members of his associations had no problem with the implementation of the regulation.

“For automobile component products, we are ready to stick on Indonesian-language labels anytime,” Sugiarto said.

As of September 29, the trade ministry recorded that 1,044 companies, both manufacturers and importers, had applied for letters of the label inclusion. As many as 958 of those companies had obtained approval to begin producing and affixing labels. Relevant information is available at http://tinyurl.com/indonesiathisday.