Thai Cabinet Approves Ban On Imports Of Used Vehicles

[ghillie44]

Well if this stops your average motorcycle moron getting his hands on a "big bike" then that is definitely going to be good for road safety.

Of course the alternatives are to introduce a real driving test and enforcement of the rules of the road.

But I guess the ban is easier to carry out..

[Amras]

I spent 50 years in the motor trade in Australia, buying and selling new and used cars with some very big motor dealers, and being a motor dealer with my own dealership, I know a lot about the importing of used cars from other countries, Australia went through this and now dealers can only import used cars that are sold new in Australia, the problems with importing used cars from another country and a model or type of car that is not sold in the country is many, the main one is parts, if the imported car has an accident or needs a replacement part, no dealer in that country will carry parts for a car not sold new in that country, to get parts from an overseas country is a huge problem some times taking months or not getting parts at all,

the imported car would bought overseas for lot less than a similar type of car, size and age, that could be bought for in the country it is being imported to, if you try to sell the imported car the dealers will pay less than they can buy another one from overseas, that means a huge loss if you sell the car, making the car almost unsaleable,

another big problem is stolen cars or Cut & Shut cars, Cut & Shut is when two cars are damaged, one with a front end and one with a rear end damage, the two are cut in half and the two good ends put together to make one car, insurance in Australia is very difficult to get on imported second hand cars, don't know about about here,

most people would not know what they were buying with a used car, most people think they know about cars because just owning a car makes them experts but that is far from the facts.

I would not buy a second hand car that is not sold new in any country, there are a lot more problems but this just a few.

Great post, Merlen. Very informative.

That may apply for dealers, but for personal importers in Australia you cannot import a second hand car for a model that was sold in Australia (and locally available). You can only import and register a car if it was not a locally available model (ie sold new from the dealers). Unless the car is more than 15 years old, then it is exempt from this rule.

I fail to see why the government would care if spare parts are hard to find...seems like not their problem if it's your choice of car. The rule above though (for personal imports) protects the local second hand market of locally delivered models.

[RAZZELL]

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!

As you understand it wrong a retiree cannot bring stuff in free. Thai wife yes working here yes, retiree no.

Am I missing out on something here? Are you suggesting that my Thai wife (we've been married five years) can import my car free from the UK, (which I bought six years ago)?

This is wrong.

I believe the "importing a car" tax exemption was done away with in about 2000...otherwise the roads would be full of new BMW's, Mercs etc imported by returning rich Thai students.

RAZZ

[BuffaloRescue]

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.

Thats due to the cheap price of labor in Thailand compared with Aus, USA or Europe

Its cheaper to keep an old car on the road in TL compared with those countries to it retains more value

[anterian]

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.

Sorry but I disagree. Most second hand car prices are high , not because of supply or demand, but because sellers think their car is still worth the same price they paid for it three years ago, in to days market. Put simply the seller wants to sell it today for roughly the same price he / she paid for it. The concept of depreciation has yet to visit these shores.

It's not just that, in most countries, for example the UK a car after 3 years has to undergo a rigorous road worthiness test, cars soon start to fail in expensive components, so the resale value rapidly drops. Here if there is any such test I have never seen evidence of it.

[cheshiremusicman]

Don't you just love the statement in the original quote where it states about the concern caused by these imports on the grounds of 'Public safety'. Jexxxx's they haven't got a <Snip!> clue about this to start with.

Never mind the 7+ seater vehicles, what about controlling the lunatics that drive them,or maybe asking(insisting) the police stop people riding on the top of 15 foot loads on pickups - fat chance. The usual half baked ideas, designed to keep the masses happy whilst watching their endless 'soaps' and spending countless hours on their mobile phones - usually whilst driving - surely not I hear you cry!!!

Edited April 18, 2012 by metisdead
Disguised profanity removed.

[Thai at Heart]

I spent 50 years in the motor trade in Australia, buying and selling new and used cars with some very big motor dealers, and being a motor dealer with my own dealership, I know a lot about the importing of used cars from other countries, Australia went through this and now dealers can only import used cars that are sold new in Australia, the problems with importing used cars from another country and a model or type of car that is not sold in the country is many, the main one is parts, if the imported car has an accident or needs a replacement part, no dealer in that country will carry parts for a car not sold new in that country, to get parts from an overseas country is a huge problem some times taking months or not getting parts at all,

the imported car would bought overseas for lot less than a similar type of car, size and age, that could be bought for in the country it is being imported to, if you try to sell the imported car the dealers will pay less than they can buy another one from overseas, that means a huge loss if you sell the car, making the car almost unsaleable,

another big problem is stolen cars or Cut & Shut cars, Cut & Shut is when two cars are damaged, one with a front end and one with a rear end damage, the two are cut in half and the two good ends put together to make one car, insurance in Australia is very difficult to get on imported second hand cars, don't know about about here,

most people would not know what they were buying with a used car, most people think they know about cars because just owning a car makes them experts but that is far from the facts.

I would not buy a second hand car that is not sold new in any country, there are a lot more problems but this just a few.

Great post, Merlen. Very informative.

That may apply for dealers, but for personal importers in Australia you cannot import a second hand car for a model that was sold in Australia (and locally available). You can only import and register a car if it was not a locally available model (ie sold new from the dealers). Unless the car is more than 15 years old, then it is exempt from this rule.

I fail to see why the government would care if spare parts are hard to find...seems like not their problem if it's your choice of car. The rule above though (for personal imports) protects the local second hand market of locally delivered models.

It just makes life harder and harder for the grey importer to provide any service at all. Want a Merc repaired? You have to go to the main dealership and pay full price for genuine authenticated new parts. Once had a friend who had a bearing go on a BMW he had bought from the main dealership. You could almost buy a second hand small car in Europe, for what he paid here.

Plus, there must be an absolute glut of second hand parts from scrapped cars from the flood hanging around, and there is probably a handsome business to be done selling the parts that are already in the country instead of continuing to allow imports. Well now you can't get hold of the part from overseas, so how the hell are you supposed to know if that given part hasn't been sitting under water for 2 months? Either way, this type of petty rule changes are handed down by this style of government continuously to achieve some apparently laudable aim, to solve a non-issue or to benefit a very few select people.

Anyone for closing petrol stations at night or not selling booze between 2 and 5? It is exactly the same type of proclamation. Everyone wanders around scratching their head what the real tangible effect of the rule will be, and there isn't any apparent. When that is the case, you can basically guess that a few people are losing out financially and they have enough pull to sort it out.

I can believe it is nothing more than the up country BMW dealers moaning and bitching that they aren't getting any service business through their expensively created showrooms because people are getting hold of the parts and doing it themselves.

[thaihome]

Can you provide a link that shows VAT is not collected on 60% of the required transactions? You had better be sure you understand the law and how VAT is reported and collected first before posting anything.

You could start by listing your personal transactions in which you think VAT should have been collected and was not.

TH

Every bowl of noodles that I buy for a start. Every beer I buy in my local bar for another, every bottle of coke that I buy from my local mom and pop store. Building materials in profusion. Just try and get a VAT receipt of many suppliers. It can be like getting blood out of a stone. This is why Chinese VAT is so high, because it encourages companies to keep the chain intact because claiming it back is worth it.

The law is up to 1or 1.5mn baht in revenue to register, it is a nice simple rule, but means that there is an enormous part of the Thai economy that is virtually never touched by the tax man. Throw in the entire "black" economy of the country, and Thai GDP is probably minimum 10% higher than officially reported.

You do realize that VAT is collected on every transaction through the production chain, not just the one you see. When you buy that beer your "local bar for another, every bottle of coke that I buy from my local mom and pop store" the VAT has been paid when they purchased it and passed on to you in the price. I promise you, every beer and soft drink wholesaler is paying the VAT (against a credit for the VAT they paid for the raw material to make the product).

In the case of the bar and mom and pop store, they are paying the VAT when they buy product, adding it to the price, but not bothering the take the credit for the VAT they paid. The government is only out the VAT due on the difference between the wholesale price and retail price you paid. That margin is mostly pennies and the lost VAT 7% of that. Which is one reason the government does not bother to go after it, the other reason being it would be political sucide.

You will have to explain the math and how the GDP being a "minimum 10% higher than officially reported" equals to VAT not being collected on 60% of the value of the transactions in Thailand.

Certainly there is a large tax avoidance going on, but it is nowhere near 60%. It is likely closer to 10% as it is only at businesses that are using the 1.8 million baht threshold to avoid registering and collecting on their retail prices, even though their turnover may be higher. The VAT has been collected through he whole chain and it only the margin on the retail price that is being missed.

TH

Edited April 18, 2012 by thaihome

[BuffaloRescue]

Reminds me of something Milton Friedman once said about vehicle safety and free market.

Something along the lines of - Government intervention and safety controls actually make cars more dangerous. It keeps the prices up which prevents people entering the market for new cars and consequently there are more old and dangerous cars on the roads. He was talking about airbags and other safety gear being requirements.

The poster here who likes protectionist policies is seriously misguided. What TL needs is a completely free market, open, high tech manufacturing and farming, foreign investment etc. The question should be how to bring this in gradually so as not to upset the balance. Government controls are almost always wrong, seriously narrow minded view of the world usually favored by the elite who have everything to gain by keeping the country poor - or so they believe (actually not).

[Thai at Heart]

Can you provide a link that shows VAT is not collected on 60% of the required transactions? You had better be sure you understand the law and how VAT is reported and collected first before posting anything.

You could start by listing your personal transactions in which you think VAT should have been collected and was not.

TH

Every bowl of noodles that I buy for a start. Every beer I buy in my local bar for another, every bottle of coke that I buy from my local mom and pop store. Building materials in profusion. Just try and get a VAT receipt of many suppliers. It can be like getting blood out of a stone. This is why Chinese VAT is so high, because it encourages companies to keep the chain intact because claiming it back is worth it.

The law is up to 1or 1.5mn baht in revenue to register, it is a nice simple rule, but means that there is an enormous part of the Thai economy that is virtually never touched by the tax man. Throw in the entire "black" economy of the country, and Thai GDP is probably minimum 10% higher than officially reported.

You do realize that VAT is collected on every transaction through the production chain, not just the one you see. When you buy that beer your "local bar for another, every bottle of coke that I buy from my local mom and pop store" the VAT has been paid when they purchased it and passed on to you in the price. I promise you, every beer and soft drink wholesaler is paying the VAT (against a credit for the VAT they paid for the raw material to make the product).

In the case of the bar and mom and pop store, they are paying the VAT when they buy product, adding it to the price, but not bothering the take the credit for the VAT they paid. The government is only out the VAT due on the difference between the wholesale price and retail price you paid. That margin is mostly pennies and the lost VAT 7% of that. Which is one reason the government does not bother to go after it, the other reason being it would be political sucide.

You will have to explain the math and how the GDP being a "minimum 10% higher than officially reported" equals to VAT not being collected on 60% of the value of the transactions in Thailand.

Certainly there is a large tax avoidance going on, but it is nowhere near 60%. It is likely closer to 10% as it is only at businesses that are using the 1.8 million baht threshold to avoid registering and collecting on their retail prices, even though their turnover may be higher. The VAT has been collected through he whole chain and it only the margin on the retail price that is being missed.

TH

I don't disagree entirely, I disagree with the idea that it is pennies in the final sale price, because the idea that once a company miraculously reaches 1.8mn baht they will run off to register is a bit of a nonsense. There is an enormous cash industry running around in the country, and company revenues are largely grossly underdeclared. It would be interesting how much revenue is declared by an average booze wholesaler.

There are millions of transactions conducted every day in the country where the exchequer doesn't get his legal clip, importing of grey market cars being one of them.

[arthurwait]

So this will really help the poor out as in the people who voted for them.

Stop the import of second hand cars will most likely mean second hand cars get even more ridiculously overpriced. How to help move the country forward hey? It won't effect the rich though who can afford new anyway. The poorer people will just have to work even longer hours or take out more loans they can't afford. At least they can loan against their farms until they lose them.

Well it will help the car manufacturers in this country whose factories were flooded I suppose. I'm sure they're be extremely grateful.

It won't help the second hand dealers though. Hmm theres another industry that uses large spaces of good retail land that will be available cheaper if the business folds. I wonder if any of the megalomaniacs running this country had ever thought of that.

[notmyself]

Is Thailand the only country in the world with such a bizar law ?

This could be old news but China and Nigeria had something along the same lines when I was doing high end car exports during the late 90's. It was however based on milage rather than age so so I think you can guess what people done. A 5 year old BMW 750iL would cost around 20-25k (GBP), shipping would be around 1.5k (US$) and the sale price would be something like double what I paid for it.

As a slight aside, I bought the cream interior from the Rolls Royce Leslie Crowther crashed.

Leslie Crowther's showbusiness career ended on the afternoon of 3 October 1992 on the M5 near Cheltenham, when he sustained serious head injuries in a car crash which nearly killed him. The precise cause of the accident remains unknown. It was speculated that he fell asleep at the wheel and, as a result, his Rolls Royce car skidded into the central reservation barrier and overturned several times.

http://en.wikipedia.org/wiki/Leslie_Crowther

[crazydrummerpauly]

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.

Why ? Simple: it's a stitch-up (always has been with the huge import-tax formerly in place) between the gov., the banks, the auto-dealers, and the auto-manufacturers...forces huge numbers of citizens to get deeply in debt to buy new cars and trucks - years and years of crippling repayments, and many defaults resulting in the complete loss to families of 100s of thousands of baht. Absolute scandal. Hate it with a vengeance.

[metisdead]

A post has been removed due to possible violation of copyright and non compliance of fair use. It is generally accepted, but not written into law, that quoting the first two or three sentences of an article and giving a link to the source is considered “fair use” and not a violation of copyright.

[Billmont]

I understood that a retiree could bring in one car for personal use tax free. As several posters have pointed out this is not correct and I apologise for this misleading information. For some reason I had in in my memory that this was possible as I had read about it several years ago. However it is now obviously not possible and I apologise again for any incovenience caused.

[kartman]

Both papers reports are just confirmation that the Thai Government has no control over the Customs Dept and it's employee's, therfore it's going further down the supply chain and doing a rearward action through an agency it does have control of.

[arthurwait]

I understood that a retiree could bring in one car for personal use tax free. As several posters have pointed out this is not correct and I apologise for this misleading information. For some reason I had in in my memory that this was possible as I had read about it several years ago. However it is now obviously not possible and I apologise again for any incovenience caused.

If memory serves me right it was nothing to do with being retired, but if you had owned the vehicle for a certain amount of years. Again if my memory serves me right it was longer than most foreigners (in the UK anyway) own a car for.

[arthurwait]

A post has been removed due to possible violation of copyright and non compliance of fair use. It is generally accepted, but not written into law, that quoting the first two or three sentences of an article and giving a link to the source is considered “fair use” and not a violation of copyright.

That explains why I couldn't quote it, but thanks for the poster for trying to clear this up anyway.

[EvilDrSomkid]

Am I allowed to cut and paste from the newspaper ?

If not this is what I read today,

The government has banned the import of used body parts for passenger cars and motorcycles to prevent tax evasion while the Transport Minister has banned the registration of cars assembled fro spare parts

Oh fiddle sticks...

Does this really mean I cannot import spare parts for my Audi anymore?

[smedly]

I often think when reading the "Thailand News" thread on TV it should be renamed the Thailand zanny Funny Stories" thread - the stuff you read here is like a comic book

Anyway I wonder if a step like this will actually push up the asking price of already registered vehicles that fall into this category and secondly - which government officials currently have a huge stock of imported already registered Vehicles........the mind boggles at this insanity

[metisdead]

An inflammatory post has been removed.

[arthurwait]

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!

As you understand it wrong a retiree cannot bring stuff in free. Thai wife yes working here yes, retiree no.

Am I missing out on something here? Are you suggesting that my Thai wife (we've been married five years) can import my car free from the UK, (which I bought six years ago)?

This is wrong.

I believe the "importing a car" tax exemption was done away with in about 2000...otherwise the roads would be full of new BMW's, Mercs etc imported by returning rich Thai students.

RAZZ

It was in the news this year for that exact reason. It may have been done away with this year or late last, but not in 2000.

[DavidJames]

Too many unsafe Audi and Mercedes on the streets

It is a problem indeed,

Get rid of cars Like this Volvo XC90 SUV, it is a deathtrap:

Thank god for the new law, I feel safer now.

[soi41]

&lt;deleted&gt;. This is about import of used CARPARTS. Not used cars !

[thaihome]

http://thainews.prd....id=255504180005

BANGKOK, 18 April 2012 (NNT) – The Cabinet has agreed to ban the import of used car parts for the production of new vehicles in Thailand

[pacovl46]

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.

You have to pay so much money for old cars because of the horrendous import and excise tax in Thailand. Take bikes for example, if you import an assembled bike you pay 80% import tax plus the excise tax. If you import the bike in parts you pay 39% for the frame and only 17% for the rest of the parts. Therefore it's a lot cheaper to import the bike in parts and this is the loophole they've closed now.

[KCPhuket]

Still, if people are wiling to pay the asking price for a used car, it does boil down to supply and demand. There are hundreds if not thousands of used cars for sale on Phuket. If the used price is too high, people will just buy new. Oddly, as with property here, some owners would rather not sell than lower the price...weird. Guess they really don't need the money.

[TheCure]

The Thai economy is built on dirty money , made via corruption, prostitution, and all sorts of illegal, untaxed businesses.

The Thai economy , thus , is a huge launderette for this dirty money .

Case in point : the car market , new or second hand.

Name one other country in the world where you can walk into a car dealership, put a few million THB in cash on the table and drive away with a new car, no questions asked ?

[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.

You have to pay so much money for old cars because of the horrendous import and excise tax in Thailand. Take bikes for example, if you import an assembled bike you pay 80% import tax plus the excise tax. If you import the bike in parts you pay 39% for the frame and only 17% for the rest of the parts. Therefore it's a lot cheaper to import the bike in parts and this is the loophole they've closed now.

Only if they are USED parts. This does not impact complete knock-down (CKD) vehicles at all. What they don't want people doing is importing used parts and then saying it is a new vehicle.

TH

[beloriss]

time to leave thailand, the things are getting worse and worse everyday...