Cars coming into New Zealand could soon be required to meet tougher Australian standards
BMW is working on its own version of Closer Economic Relations, where its cars will be built specifically for a new, integrated "Australasian" market and not for separate New Zealand and Australian demand.
"It's something that won't happen straight away but we have to look at it because BMW wants to optimise supply and demand in this part of the world," says the carmaker's New Zealand managing director Mark Gilbert.
Vehicles built or imported into Australia have to meet Australian Design Rules (ADRs), national standards for safety, anti-theft and emissions.
ADRs are generally performance-based and cover issues such as occupant protection, structures, lighting, noise, emissions, braking and a range of miscellaneous items.
New Zealand doesn't have a such dedicated vehicle standard. Vehicles sold here pretty much only have to meet the design rules of the country in which they are built.
In the case of European vehicles, New Zealand accepts the right-hand-drive design standard required by Britain. In a nutshell, the Volkswagens, Peugeots and so on sold here meet British design requirements but not necessarily Australian, although more ADR-compliant cars are coming in.
European carmakers want to know why Australia and NZ can't get it together. They would prefer to build to an ADR-driven "Australasian" standard. One reason: Australia sells one million new vehicles a year; New Zealand sells 100,000 at best.
There are many advantages of a common automotive market Downunder - getting technology to market quicker, spreading freight costs - but many niggly things remain.
For example, side mirrors on some European cars sold here don't meet ADR. It literally comes down to suitable nuts and bolts. Said one European carmaker: "We've looked at the ADR thing but it's a nightmare."
Fuel, too, is a problem. Both countries need to improve petrol and diesel quality to take advantage of modern technologies.
BMW, however, is committed to ironing out difficulties. Says Gilbert: "There will be logical times to do it. The new 7-Series is an example. It is pretty much an ADR-compliant car. The new Z4 will probably be an ADR car. The new 3-Series isn't.
"It will take time. Our products are different, our computer systems are different. But it will happen. We think it's better for our brand. It makes more efficient use of the company's capital.
"We will look at more synergies within our group. It makes no sense to have one business model and plonk it all around the world when, for example, we could share a call centre with Australia.
"BMW Australia sells 17,000 vehicles a year; we sell 1000. If we have 50 more cars than we need Australia will swallow them a lot easier than we can without us having to force them down the sales funnel here with the resulting loss of residual values.
"Possibly even parts could go from here to Australia. They could come the other way if we need them. All these things, believe it or not, haven't been well thought through.
"But tough economic times force you to look and ask where the synergies are."
Gilbert has met BMW Asia-Pacific chief Guenther Seemann and BMW Australia boss Stavros Yallouridis.
"We had our first meeting on ADR last year," said Gilbert. "Munich (BMW headquarters) thought it was going to be a traditional Australia-New Zealand battle.
"But we met early and went to the second conference with more solutions than problems. I think Munich sat back dazed.
"We are all looking for the same result - we want our company to be successful. Doing nothing is not an option. You have to find ways to make these things happen."
Gilbert launched the facelifted 3-Series this week in Auckland. It gets a new look front and rear with design changes to the interior. The engine line-up and the car's class-leading driving dynamics remain.
But prices have changed up and down in line with more standard features. The entry-level model is up $3000 to around $62,000. The top-end unit is down $11,600.
An "innovation package" offering buyers features including satellite-navigation, heated seats and USB interface, can be had for around $1300. The same package would normally cost around $6000.
