Thai Cabinet Approves Ban On Imports Of Used Vehicles

[majhiggins]

I am apalled by the price of autos in Thailand. I saw a used 4-year old Mini S on a classified site for 2.9 Million! In the USA, a brand new Mini S sells for the equivalent of 700,000 baht. So, for the price of one 4 year old car, I could buy 4 brand new ones in the USA. Wealthy business owners are driving around like they are Saudi Princes when they have a mini, not realizing that it is a car that a middle class family in the US might buy for their daughter as a graduation present.

I wonder if this applies to foreigners who live here bringing their own car into Thailand. Currently, you can bring 1 personally owned vehicle here duty free 1 time.

[Fishface]

Just sold my classic car, should have waited longer, think this will drive the prices of classic cars/ motorbikes up big time.

no, you are lucky you sold it. I for one would not give you one baht for a car I cannot fix. No import parts, no repairs!

You could never get parts for a classic car and they hav'nt stopped repairing them, they havn't banned imports of parts either.

Just a few cars have been stopped.

[Fishface]

I am apalled by the price of autos in Thailand. I saw a used 4-year old Mini S on a classified site for 2.9 Million! In the USA, a brand new Mini S sells for the equivalent of 700,000 baht. So, for the price of one 4 year old car, I could buy 4 brand new ones in the USA. Wealthy business owners are driving around like they are Saudi Princes when they have a mini, not realizing that it is a car that a middle class family in the US might buy for their daughter as a graduation present.

I wonder if this applies to foreigners who live here bringing their own car into Thailand. Currently, you can bring 1 personally owned vehicle here duty free 1 time.

This is obviously in response the the story of last week where big Thais would buy Bentleys in Uk and get them registered here without taxation being paid. The car was then worth many millions more on the Thai market. Its value being on what some on will pay for it wether its a Bently or a 1980 Mazda 323.

[tuktukmike]

Protectionism pure and simple nothing more.

Thailand have an agreement with the EU where Thai exports get a General preference certificate which lowers the duty on their goods, this was put in place many years ago as Thailand was considered a third world country.

The time has come for the EU to scrap this nonsense and let Thailand compete with others on a level basis.

The banning of second hand cars will make little difference to us as it was just a cartel run by Hi-sos and the crooks in the customs department.

How many of you remember Thailand's big show about signing up to the Gatt agreement which should have ensured fair tariffs on all imported goods, as always they might as well have burned the agreement as soon as they signed it.

Anyway on the news yesterday they announced that (yingluck) Thailand was hoping to become the commercial hub for China so we can see the path they are heading, China loves to export but does not want large scale imports.

While companies around the world fail due to cheap imports and millions of workers lose their jobs our politicians allow this to continue without putting import tariffs on these goods.

TTM

[Fishenough]

motorcycles, sedans, pick-ups and vehicles that carry more than seven passengers.

So what else is left? Is Thailand the only country in the world with such a bizar law ?

I am missing something here, the Gov claims that Thailand is going to be the Detroit of Asia car manufacturing. Take that with a grain of salt. But, it is true that many cars are manufactured in Thailand and sold domestically. so why are used cars here so dam_n expensive, I mean crap boxes.

Old clapped out junk that you could easy buy for $500-$1000 in USA, Australia or Europe you have to pay $6000+ in Thailand.

Yet in America you can not bring in a import unless it's 25 years or older - plus some American cars are old clapped out junk at just 10 years old. Australia and Canada follow a 15 year old rule for import cars, again all designed to protect a countries massive dealer networks.

I have bought a large number of vehicles from Japan at very low prices, this has generated a large amount of anger and outrage over the years from the Canadian Motor automobile retailers associations.

This is simply ... crazy. There must be something corrupt going on here.

A quick Google search seems to show that the only country which has done this is Zimbabwe, and they have even stopped this ludicrous law. I hope the Thai government is not taking its cues from a country like this, despite K. Nalinee Taveesin's connection to that government (http://www.thaivisa....et#entry4990795).

Try http://en.wikipedia...._import_vehicle

Yes used vehicles are rather pricey, yet countless young locals here are buying new vehicles on salary's of (more and less) 10,000 baht.

Uk and Japan have mandatory government inspections, which for many reasons leads to very low priced used vehicles. A older SUV that someone had to pay to have removed from there yard in Japan, after a full mechanical once over, would and does fetch a high selling price in Canada and Thailand. And after the smear campaign I've seen generated in Canada against import vehicles, not at all surprised by this news. In Canada the Media, being feed news by industry safety organizations and government run insurance, has many Canadians believing that a 15 year old benz from Japan with low miles and perfectly maintained is a danger to all on the road yet the ramshackle 20 year old plus American rust bucket just fine.......

This car here, the last I purchased from Japan bought as a gift for my mother, cost just 9000 baht at auction. What would it cost plated on the roads of Chiang Mai?

[Pops]

This is just, the Thai politicians way, to protect foreign car makers, investing huge sums of money, in assembly and manufacturing plants in Thailand.

Foreign car makers avoid taxes, by investing in assembly and manufacturing plants in Thailand and adding an X amount of value to their products on Thai soil, through these plants.

Grey market car dealers avoid taxes by doing pretty much the same, importing in parts and assembling in Thailand, but probably without the necessary licenses and paying full taxes, for there must be an X % added value in Thailand, to have a car production license and some parts need to be produced locally.

Nothing wrong with that, if that is the case !

The thing that bothers me the most, is the fact that the taxes on importing second hand cars as a whole are so high, that second hand imported cars get more expensive then locally produced new cars.

This is a form of false competition to protect the local manufacturing companies.

This happens in our countries as well though, for in Europe, Japanese cars are taxed extra, to allow the European produced cars to be competitive as well.

On the other hand, politicians should try to find a balance, in which both options are offered to consumers against affordable prices.

It's the consumer that counts and that should be protected I reckon.

[tuktukmike]

Majhiggins,

Where on earth did you hear that nonsense.

You as a forigner cannot bring 1 car into Thailand duty free, no way not ever.

You can apply to Thai commercial affairs dept and gain an import permit but it will cost you more than 5-10 times the value of the car in duty.

TTM

[andyl66]

The second hand car market in Thailand is insane. Me and my wife went to look for a cheap runabout and I was shocked to see cars that were nearly ten years old selling for the same as a brand new version of that car. Then I discovered the real reason why. The fact is this, most Thai's do not have any substantial savings, so they rely on loans. Also, a high percentage of Thais run their own businesses and avoid tax of any sort. They cannot prove their income to a satisfactory level for the new car dealers. However, the second hand car dealers over here are more than willing (for a backhander) to lie on the finance forms and claim to have seen evidence of income. Also the deposits required are far less for second hand than new. Sometimes the Thai false pride just leaves me weak. As my wife says 'Thais need to show power'. They all are in debt up to the eyeballs but will never admit to it, a car is their status symbol. I live in an apartment block and everyone in these grotty 4000thb per month apartments has a car. There are new Mercedes, BMWs, pick ups, modified Toyotas, and two Mitsubishi Lancer Evos. So, they'll live in a dogsh** apartment but must have a flashy car 'to show power'.

[ozsamurai]

Aother self-serving law that puts a few more nails in the coffin of Thailand. It will just drive the bribe money higher, so that again the only ones who can 'work within the system' will be those related to, or paying off some very high officials. Why don't they just get on with it and ban foreigners as well! They have been making it increasingly harder for years anyway, as they did with import cars. Perhaps we're next.

Oz

[Xonax]

Typical sldegehammer to crack a nut.

The issue was people dodging taxes on supercars using corruption in the customs department. Instead of solving that issue, they have caused another headache completely. I can't help feeling that this is down to the probably 10's if not 100's thousands of secondhand cars on the market after the flood. As though stopping a few imports will help to firm up the price of a water damaged Vios.

I have often wondered about the second hand market here, and why it doesn't follow the depreciation rates seen in the rest of the world, and I can't help thinking it is down to a manipulation from the finance companies to allow you o have enough value remaining in the car after 5 years to go off and finance another one. When 7, 8 or 9 year cars are still selling for 40% of their original sale price, there is something very odd with the market.

Is there a burgeoining market in export of second hand cars here that no one knows about? If so to where? Never heard about it, but how can it be that people believe that second hand cars are in short supply here when the sale of new ones keeps going up year after year? There must be an explanation somewhere as to why 2nd hand cars hold their value so well here, it isn't as though the maintenance is so good is it now.

I definitely agree that used cars are very extremely expensive in Thailand and that´s why I only buy new cars manufactured in Thailand.

When that is said, cars do actually last longer here. Thailand has no winter, no cold start up´s, no rust and the rain dries up faster than a blink of an eye. In Thailand a car often lasts 20 years, and in the Thai way of calculation, this means only a 5% depriciation per year.

[Semper]

I suppose this will effect someone coming to Thailand to retire. As I understand it a retiree could (up until now) bring in all his belongings, furniture etc including one car, all tax free proving it was within six months of the retiree's visa stamp. Now will the car be excluded, not even permitted if one wanted to pay the Tax?

Also are the Taksin haters late risers as I read every post and did not see anyone blaming Taksin for this latest proposed law!

I think this is/was only for Thai nationals.

[majhiggins]

The US has traditionally viewed east Asia as a grouping of 'developing economies' including Japan up through the 1980s. As such, they have eschewed placing high tarrifs on their imports because the idea is they couldn't pose any real threat to the domestic market anyway. But, in the late 70s, Japan started making really big motorcycles, Honda Goldwing being the most notable but all 4 of the main Japanese bike makers went up into the 1000cc + category. Harley Davidson, the last American bike maker, was on the verge of bankruptcy and people lobbied congress to pass a special big-bike tarrif on imports over 700cc. This tarriff was to be about 100% of the bike's cost. As a result, the Japanese scrapped a lot of their big air cooled bikes and came out with a whole new line of water-cooled 700cc bikes (water cooled bikes can produce way more power than air cooled because they run cooler and can use higher compression rations). This got them through the life of the law (it was a temporary measure that expired in 4 years, I believe). But many people complained that a 100% tarriff was outrageous, even for a protectionist measure. Here, they are routinely slapping %150-%300+ tarriffs on imports. Want a new BMW 5 series? Good, you're going to pay for 4 of them and give the other three to the benevolent government. Yet, somehow, this place continues to chug along! I have an MBA and am earning a PhD in International Business right now and every single thing I have ever learned in business school says that Thailand could not possibly survive economically, and still it does. If I could figure out how, I might well have the subject for my dissertation.

[Markaew]

I question anything made in Thailand. Even if it's a foreign company and the parts shipped here it is still assembled by Thais. EVERYTHING I have bought from a Thai company has failed in six months or less.

[phl]

The initiative is viewed as being beneficial to domestic auto-makers as well as for the sake of public safety

People have to wait for up to 90 days to get a new vehicle, i have a feeling domestic auto-makers are in no danger.

Not to mention second hand market is just as expansive

[MEL1]

So no more second hand pink Jag for her lady, especially when a part fails?

Just can't get the quality now. (of course, I'm sure she'll find a Chinese copy part when forced to; contrary to her new imposed law!)

Load of rubbish if I ever heard it! Just increased tea-money at shipping import officer's pockets... run by you know who

-mel.

[PhilipCook]

Banning second-hand vehicles serves the interests of the manufacturers in Thailand,the buyers of new vehicles made here/imported and the importers of new vehicles with an emphasis on the last category. Suppose you were a Lexus dealer having to compete against the importers of slightly used or moderately used Lexus vehicles which are cheap coming from Japan and well maintained. Also suppose you were the buyer of the new vehicle and your resale value was being hurt by these second-hand vehicles. I wouldn't imagine that the big bikes would cause much of a stir because the wealthy here don't want to risk their lives on two wheels. The government wouldn't take such an interest in this unless there was something to be gained by special interest groups. The real issue in Thailand is that you are expected to pay double or more the price available in developing countries for vehicles made here and this definitely hurts the domestic sales for manufacturers in Thailand.

[SPIKECM]

the road infrastructure (even more cars) which we all know is pretty bad already.

Actually, the road infrastructure is actually quite good for a developing nation. Been in quite a few where outside of the major city - you could NOT drive a car - in fact rental agencies would not insure it outside of city unless you rented a rugged jeep.

What an understatement. The roads in Thailand are now unbelievably good. I think too many here seem to compare the roads to somewhere like LA. When I go back to my little town in the UK I have to suffer roads far worse than Thailand. I've driven all over Thailand and the roads are really quite amazing... The inter provincial highways are good but even when you go off the main highways the roads are always good.

[Markaew]

The US has traditionally viewed east Asia as a grouping of 'developing economies' including Japan up through the 1980s. As such, they have eschewed placing high tarrifs on their imports because the idea is they couldn't pose any real threat to the domestic market anyway. But, in the late 70s, Japan started making really big motorcycles, Honda Goldwing being the most notable but all 4 of the main Japanese bike makers went up into the 1000cc + category. Harley Davidson, the last American bike maker, was on the verge of bankruptcy and people lobbied congress to pass a special big-bike tarrif on imports over 700cc. This tarriff was to be about 100% of the bike's cost. As a result, the Japanese scrapped a lot of their big air cooled bikes and came out with a whole new line of water-cooled 700cc bikes (water cooled bikes can produce way more power than air cooled because they run cooler and can use higher compression rations). This got them through the life of the law (it was a temporary measure that expired in 4 years, I believe). But many people complained that a 100% tarriff was outrageous, even for a protectionist measure. Here, they are routinely slapping %150-%300+ tarriffs on imports. Want a new BMW 5 series? Good, you're going to pay for 4 of them and give the other three to the benevolent government. Yet, somehow, this place continues to chug along! I have an MBA and am earning a PhD in International Business right now and every single thing I have ever learned in business school says that Thailand could not possibly survive economically, and still it does. If I could figure out how, I might well have the subject for my dissertation.

That's easy. People underestimate the underground economy here and the percentage it represents. Scamming foreigners out of their money. Foreigners buying/building houses for in-laws and wives and cannot have their name on the property. At the slightest whim the foreigner can be thrown out of the house they expected to retire or just live in and many are dumb enough to repeat the same thing. Not to mention the pros that have multiple boyfriends abroad collect huge sums of money. These are thousands of men bringing thousands of dollars, pounds, etc into the country. All this cash feeds this economy.

[kerrysum52]

Hello all,

And thanks for the comments.... Some how someway, this doesn't even make sense.... But it does seem like protectionism to me...(Am I wrong?) Or maybe it is the Kyoto Agreement, I can honestly say, it makes no sense...

Many great posts that I read, thank you all... I guess it eliminates any indiviual creative ideas.... Is it one size fits all ? I know I could drink a few more beers, but don't think I could get this messed up to make it logical.....

Kerrysum

[TeddyFlyfisherDavis]

Look I don't profess to be an expert on economics.

But thishis just seems plain ludicrous.

Can someone explain the reasoning to me behind this decision.

It doesn't seem to make any sesne.

Agreed...Suppose I want to import a used Ferrari...? Don't they want my money..? Sounds pretty ignorant to me also...

[BigBikeBKK]

I have a legally imported bike for sale which isn't available in the local market.............it just doubled in price

They can stop the title transfer. I have one as well and transferring the title (green book) was nearly impossible. It took all day and met resistance from a line of people but I got it through with no money passed under the table. That was a year ago.

Nonsense- if the green book was legal it's a piece of cake to transfer an imported vehicle. Wonder if the value of my Gixxer K5 and other imports might actually go UP as a result of this ridiculous new law?

[BigBikeBKK]

Look I don't profess to be an expert on economics.

But thishis just seems plain ludicrous.

Can someone explain the reasoning to me behind this decision.

It doesn't seem to make any sesne.

Agreed...Suppose I want to import a used Ferrari...? Don't they want my money..? Sounds pretty ignorant to me also...

Didn't you notice that SPORT CARS are NOT on the list of banned imports? The Hi-So's still need their toys!

[thaihome]

Actually the other newspaper is saying the ban is only on used automotive parts and the registration of vehcilces made from such parts. They say this is to protect the domestic industry and to prevent unsafe part from being used.

Malaysia and the Phillipines, amoung others, have similar bans for the same reasons.

TH

[wolf5370]

Old clapped out junk that you could easy buy for $500-$1000 in USA, Australia or Europe you have to pay $6000+ in Thailand.

This is pretty obiously it's call supply and demend.

In the 'west' you have generally weathier people, who have been told time and time again the new is better and they can afford it, so they buy new often, this leaves plenty of second hand cars in a devaluted market place for them.

In Thailand you have alot of people on very very very basic wages, they still need cars, most people can afford to purchase new ones, or even near new, they have to WAIT until it's been handed down 4-5 times before they can get move up from a motorbike.

So, Supply of Second hard cars is scarse (relavity) plus Demand for Second hard cards is high (relavity)... PUSHING up the prices!

If you look at the second hard market overall in Thailand is much higher for most products than the west.

Please excuse my bad spelling.

Don't know where in Thailand you live, but here in CM as I look out my window day in and day out, I see almost entirely cars less than 5 years old. Old trucks, but new(ish) cars. In the UK from whence I hail, I would see a much greater percentage of old cars on the road. New cars here are up to 5 times the price than western prices, so second hand imported cars are likely to be expensive too. However, even locally made cars keep silly prices after a decade or more. When I was looking for a used Vigo twin last year, the second hand market prices were near on the same as the new price - for ten year old vehicles! Bear in mind that vehicles are not well maintained here on the whole (services not being kept up - little pre-emptive maintenance) and often with dents outside and things glued all over the dash and roof inside (not to mention many of the stock parts replaced with gaudy, ill fitting, Chinese replacements - like small steering wheels, gear knobs, flashing led headlights etc). This makes it hard to understand why these cars are still so high priced.

[retell]

so there goes the chance to get a harley or that hotrod i always wanted

wish they made a law against second hand politicians

[roxnadz]

What an understatement. The roads in Thailand are now unbelievably good. I think too many here seem to compare the roads to somewhere like LA. When I go back to my little town in the UK I have to suffer roads far worse than Thailand. I've driven all over Thailand and the roads are really quite amazing... The inter provincial highways are good but even when you go off the main highways the roads are always good.

You haven't driven on Phetchakasem Road anywhere south of Rama 2 Road, have you?

[vahack]

That's easy. People underestimate the underground economy here and the percentage it represents. Scamming foreigners out of their money. Foreigners buying/building houses for in-laws and wives and cannot have their name on the property. At the slightest whim the foreigner can be thrown out of the house they expected to retire or just live in and many are dumb enough to repeat the same thing. Not to mention the pros that have multiple boyfriends abroad collect huge sums of money. These are thousands of men bringing thousands of dollars, pounds, etc into the country. All this cash feeds this economy.

judging by your several anti-Thailand posts here, i would say you have some bad karma. a majority of the expats in Thailand are having good experiences. as a suggestion, maybe you should stop dating bargirls and ladyboys..

[thaihome]

motorcycles, sedans, pick-ups and vehicles that carry more than seven passengers.

So what else is left? Is Thailand the only country in the world with such a bizar law ?

I am missing something here, the Gov claims that Thailand is going to be the Detroit of Asia car manufacturing. Take that with a grain of salt. But, it is true that many cars are manufactured in Thailand and sold domestically. so why are used cars here so dam_n expensive, I mean crap boxes.

Old clapped out junk that you could easy buy for $500-$1000 in USA, Australia or Europe you have to pay $6000+ in Thailand.

In my opinion, Thailand needs the tax revenue from these kinds of items. The majority of citizens here do not pay any personal income tax. Most of the small businesses are not registered as businesses nor submit any VAT or income taxes. Therefore, tax revenues must largely come from import and excise taxes plus the VAT system. Furthermore, the lowering of taxes on vehicles will also put more pressure on the road infrastructure (even more cars) which we all know is pretty bad already.

The biggest sources of tax revenue in Thailand is VAT. Corporate income tax, excise tax, and personal income tax are next. Custom duties are less than half personal income tax.

http://www.internationaltaxreview.com/Article/2920219/Thailand-Exploring-the-latest-indirect-tax-trends.html

TH

[wolf5370]

The US has traditionally viewed east Asia as a grouping of 'developing economies' including Japan up through the 1980s. As such, they have eschewed placing high tarrifs on their imports because the idea is they couldn't pose any real threat to the domestic market anyway. But, in the late 70s, Japan started making really big motorcycles, Honda Goldwing being the most notable but all 4 of the main Japanese bike makers went up into the 1000cc + category. Harley Davidson, the last American bike maker, was on the verge of bankruptcy and people lobbied congress to pass a special big-bike tarrif on imports over 700cc. This tarriff was to be about 100% of the bike's cost. As a result, the Japanese scrapped a lot of their big air cooled bikes and came out with a whole new line of water-cooled 700cc bikes (water cooled bikes can produce way more power than air cooled because they run cooler and can use higher compression rations). This got them through the life of the law (it was a temporary measure that expired in 4 years, I believe). But many people complained that a 100% tarriff was outrageous, even for a protectionist measure. Here, they are routinely slapping %150-%300+ tarriffs on imports. Want a new BMW 5 series? Good, you're going to pay for 4 of them and give the other three to the benevolent government. Yet, somehow, this place continues to chug along! I have an MBA and am earning a PhD in International Business right now and every single thing I have ever learned in business school says that Thailand could not possibly survive economically, and still it does. If I could figure out how, I might well have the subject for my dissertation.

That's easy. People underestimate the underground economy here and the percentage it represents. Scamming foreigners out of their money. Foreigners buying/building houses for in-laws and wives and cannot have their name on the property. At the slightest whim the foreigner can be thrown out of the house they expected to retire or just live in and many are dumb enough to repeat the same thing. Not to mention the pros that have multiple boyfriends abroad collect huge sums of money. These are thousands of men bringing thousands of dollars, pounds, etc into the country. All this cash feeds this economy.

Erm, I think its more to do with having practically no social security net and very low state wages. With little bills going towards the citizens, the medium to large companies (i.e. registered ones), international companies, taxes of those employed therein, state employee taxes, import taxes (like those mentioned here), foreign investments and share dealings, and fiddling with national debt - all go to make it work (for now). It was easy to see how quickly this house of cards can come crashing down (like in 97), but Thailand has always played for today and left tomorrow for the next guy. Of course, the west's house-of-cards also was brought low thanks to the evils of state encouraged greed and rose tinted specs!

[ericjt]

This car here, the last I purchased from Japan bought as a gift for my mother, cost just 9000 baht at auction. What would it cost plated on the roads of Chiang Mai?

You bought that car for around $300 USD "at auction" "from Japan"?

How do those auctions work, Fishenough?

Can you tell us a little more about where they are held? How to get info about upcoming auctions? Any special qualifications to attend? And how you arranged for shipping and delivery to your mom?

Thanks!