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Conrad Dimech
The increase in the car retail market share for used car importers risks creating more redundancies for new car importers, as more consumers opt for imported, used cars from Japan.
Dozens of employers have already been made redundant since last year, and industry leaders fear this situation can only get worse. Around a 100 employees across the sector have already lost their job, MaltaToday is informed.
Georg Sapiano, who represents the Association of Car Importers (ACIM) is claiming that companies importing new cars “have no option but to restructure and downsize their operation simply because EU legislation is imposed on new cars, and exempts used cars imported from Japan.”
Sapiano said the government had not considered the association’s budget proposals to introduce the EU’s end-of-life directive, alleviate the high registration tax on new cars, and place further pressure on having Euro-4 compliant cars: “this government is selling the environment at a discount when it permits cars without clean air standards to be sold on the island,” he said.
The ACIM claims used car dealers sell cars imported from Japan, which do not fulfil environmental standards back in the country of origin, and are eventually dumped in Malta.
However, it is also the relatively used car prices, and their popularity with low and middle-income earners, that have torn into the market share of new car importers. The ACIM now claims it cannot safeguard employment as sales are declining.
ACIM members are also obliged to maintain expensive diagnostic equipment and technical staff as part of their conditions as registered auto dealers, which contrast to kerbside locations owned by used cars dealers. Sapiano wants to see free market competition on “a level playing field. New cars safeguard public health and environment by being severely tested to be Euro-4 compliant.
“Malta is almost the only country to have an eco-tax on plastic bottles but which exempts cars that are far more hazardous than plastic bottles,” Sapiano said. New cars also have to adhere to the EU’s certificate of conformity (COC), which Sapiano says is by far a better standard than the SVA certificate which has to be adopted by used car importers. Sapiano questioned the reliability of the method Japan imports are assessed when compared to severe testing on new cars.
Emanuel Mallia, the representative of the Used Car Importers Vehicles (UVIA), says the Single Vehicle Approval is regulated by the Malta Transport Authority (ADT). In particular, the SVA certifies that used cars are not stolen, repaired or registered with incorrect mileage. “Cars are exported from Japan for the simple reason that holders are encouraged to buy new cars after three years,” Mallia said.
Mallia is surprised by ACIM’s claims of redundancies. He says competition cannot be overcome with threats and that UVIA members invest in showrooms and equipment aiming to safeguard employment like new cars importers. He said ACIM’s call for level playing field is inappropriate since products are too distinct to be brought on the same line.
“Instead consumers should be given complete information and left free to choose,” Mallia said.
The two groups of importers also have different taxation regimes: the ACIM pay registration tax on the value of their cars when they are sold, whilst used car importers pay a flat rate registration on their cars’ engine capacity, paid at importation.
Mallia however contends that ACIM members are importing used vehicles, and that “their showrooms can be clearly seen in our roads.”
Despite Mallia’s claim, industry leaders are not considering the importation of used cars to benefit from what an ACIM member has called an “erroneous system” that would “weaken their reputation.”
“People would simply stop buying second hand cars if they are not satisfied with the product. On the contrary figures show an exponential increase in the last five years,” Mallia said – an increase that has been brought about by the affordable extras which come equipped in used cars upon importation, unlike their brand new counterparts.
“ACIM members should consider that customers have the right for a decent car without spending excessive amounts of money,” Mallia said.
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