Santos gives position on used vehicle issue

Trade and Industry Secretary Juan B. Santos gave yesterday conflicting signals on the used vehicle issue.

In a press conference, Santos assured that the government is against the importation of right hand vehicles.

On the other hand, however, Santos admitted that the remanufacturing industry in the special economic zones is allowed so long as the vehicles are re-exported.

The Joint Foreign Chambers recently expressed their concern about the plans of the Bataan Technology Park to allow the entry of imported vehicles supposedly for remanufacturing and re-export.

The Joint Foreign Chambers pointed out that it is through such loopholes that the influx of used motor vehicles continues.

Although the imported vehicles are supposed to be re-exported, they still somehow find their way into the domestic market after being converted into left-hand drive vehicles.

Santos gave his assurance that DTI/BOI position on imported used motor vehicles "has been very consistent." "We maintain that there is a law prohibiting importation of right-hand drive vehicles, and therefore we feel that should be followed."

Additionally, Santos said, to discourage the importation of second hand cars," the President has issued an EO imposing a P500,000 surcharge on used motor vehicles."

These measures, Santos explained, "are essentially, first, for the protection of the local automotive industry – both assemblers and spare parts manufacturers, and second to ensure the safety of the riding public."

Santos, however, appeared contradictory with regard to the plan of the Bataan Technology Park for the development of remanufactured vehicles.

According to Santos, "we feel this is against national policy as we already have in position an automotive incentive program to enhance the auto business."

However, Santos also acknowledged, that the importation and remanufacture of imported used vehicles "is okay as long as they are re-exported."

Santos tried to assure that the DTI/BOI is taking measures to ensure that the Bataan Technology Park does not "push what is really against the interest of the local industry."

Data from the Land Transportation Office show that registrations last year reached almost 227,000, but actual sales of the local automotive industry accounted for only 88,000.

The continued entry of imported used motor vehicles is, thus, strangling the local automotive industry.

Automotive industry sources questioned the so-called vehicle remanufacturing industry since almost all other countries prohibit the importation of used or remanufactured/reconditioned vehicles.