Auto group hits auction of used cars in Subic

Threatened by the sudden influx of cheap imported vehicles into the market, automotive manufacturers want the government to stop the auction of used vehicles and heavy equipment at the Subic Bay Freeport.

The Philippine-Automotive Federation Inc. (PAF) expressed concern over the spate of public auctions of all kinds of vehicles, equipment and machinery at the freeport, warning of their implications on the government’s Motor Vehicle Development Program (MVDP).

In his letter to BOI governor Ofelia Bulaong, PAFI president Vicente Mills Jr. asked government to give the legal justification for allowing the importation and sale of vehicles through the Subic Bay Freeport.

The auctions are conducted regularly at Subic by three major companies – JVMC, Subic Auctioneers International and Asia International Auctioneers.

Sold at the public actions are a wide range of vehicles, mostly light and heavy equipment and luxury vehicles such as vans, sports utility vehicles, including the popular Mitsubishi Pajero, jet skis, big bikes and luxury cars.

Aside from vehicles, the auction firms also import and sell agricultural machinery and even power generators.

Mills asked the BOI to intervene and look into the auctions to determine how the vehicles are being checked for compliance with excise tax, customs duty, emission standards and safety.

Mills said the proliferation of cheap imported vehicles is having an impact on the overall performance of automotive assemblers participating in the MVDP where government provides various incentives such as reduced import duties on imported parts.

According to the Subic Bay Metropolitan Authority (SBMA), however, these vehicles were not imported duty-free despite being shipped and sold at the freeport facility.

The SBMA said the auctioneers settle their duties directly with the Bureau of Customs and each vehicle sold had been cleared by the bureau for sale. Moreover, the BOC reportedly also has a list of prohibited vehicles that could not be sold at the freeport.

According to SBMA, over 2,000 second-hand vehicles and used equipment and machinery are sold per auction and the BOC generates an estimated P40 million to P50 million in collected duties and taxes.

The law prohibits the importation of used cars. Only the importation of heavy equipment, depending on tonnage, is allowed. Even the importation of mass transport vehicles such as buses have to go through the Department of Trade and Industry. – Des Ferriols