October 27 2003
EU the heart of car import feud
In 1998, the European Commission imposed its highest ever fine,
EUR 102 million, on a private undertaking. Volkswagen, the German
car giant, was fined by the Commission for agreements aiming to
prevent Volkswagen dealers in Italy from selling vehicles to buyers
that were not resident in Italy.
The fine confirmed the prohibition of concerted practices, agreements
and association between undertakings which may affect trade between
Member States, in this case the EUs competition laws.
In Malta, 1 May 2004 will also herald radical changes in the car
retail sector, with parallel importation eroding the power of
exclusive agreements and sole distributorships. Even the importers
who park their used Japanese imports by the kerbside will now
have a finger in the pie, no longer able to be discriminated against
by foreign car manufacturers who operate through their exclusive
sole agencies on the island.
For the Association of Car Importers (ACIM), which groups Maltas
car importers, this is bad news. Since 1999, new car imports have
been taking a drastic plummet down 52 percent from 10,225
cars imported in 1999 to 4,932 until September this year.
Now the importers are taking the competition seriously. Used vehicle
importers, kerbside retailers linked up to the Internet and who
thrive on used Japanese imports, are seeing growing demand for
second-hand motors. Since 1999, when 1,344 vehicles were imported,
the total volume has more than doubled with 3,548 units imported
Last month, the ACIM, spearheaded by their lawyer-spokesperson
Georg Sapiano, claimed UVIA members were being aided by fiscal
incentives in the form of a lower registration tax, for importing
cars which were environmentally damaging and which no longer had
any use in the countries from where they originate, Japan. The
ACIM says used vehicle importers were paying up to Lm900 less
Reacting a week later, Emanuel Mallia, legal counsel and spokesperson
for the 28-strong members of the UVIA, accused the ACIM of conducting
a campaign against its interests: "This is quite abominable
when considering that certain ACIM members were until recently
importing used Japanese vehicles for resale to used vehicle retailers.
UVIA assures consumers that the standards and specifications of
these cars are reflected in the thousands of middle income-earning
consumers who are satisfied with their acquisitions."
Speaking to MaltaToday, Mallia said the used vehicle sector was
stoking up the competition for ACIM importers. "Used vehicles
have been imported into Malta for several years now, and these
have been satisfying a market for a certain bracket. When government
demanded that used vehicles be certified to ensure EU standards,
we accepted to have our cars tested before leaving Japan by the
British Vehicle Certification Agency. The VCA satisfies the specifications
imposed by the ADT."
Sapiano says the problem is not competition. "The problem
is that they do not compete on a level playing field. Anyone with
a broad pavement in front of their premises can log on to the
Internet, get six cars and put them on the pavement and charge
a mark-up. Thats not fair because someone else is dealing
with manufacturers who operate in environmentally-sensitive areas."
When all the levies are brought into play, Sapiano says, a new
car can be taxed up to twice its value, and is calling for a fiscal
deterrent for cars that are not up to standard environmentally:
"What I dont accept is that a five year old car is
imported - a car which is inevitably dirtier, produced with five
year old technology and so less recyclable - with less tax paid