10,000 Luxury Automobiles Smuggled to Thailand Annually

A LUXURY CAR is put on display yesterday as representatives of car-importing companies file a complaint with Justice Minister Pracha Promnok, demanding that he investigate reports of Thai students abusing their right to bring cars into Thailand tax free

 

BANGKOK -An average of 5,000 to 10,000 luxury cars are smuggled into Thailand or imported off authorized dealers each year, costing billions of baht in lost import and trade tariffs, a senior Federation of Thai Industries official said yesterday.

The four brands most affected by smuggling and tax avoidance scams or imports through independent dealers are BMW, Mercedes, Lexus and Rolls Royce, said Suparat Sirisuwannangkura, chairman of the FTI’s Automotive Industry Club.

The practices worried foreign auto makers, who are considering moving production bases to neigbouring countries if they continue, while certain Japanese producers may stop complete knocked down (CKD) assembly here because their business is hurt by lower prices and great availability of smuggled or illegally imported luxury cars, Suparat said.

Citing an FTI report in 2011, there were 5,000 luxury cars entering Thailand through various channels, resulting in a total of Bt44.4 billion (S$1.83 billion) lost – Bt8.6 billion (S$353,632 million) in import tariff, Bt32 million (S$1.32 billion) in customer grievances due to lower quality and repair, and a risk of their vehicles being seized after arrests and prosecution, and subsequent fourfold fines, he said.

The accumulative losses in the following two years should amount to Bt100 billion, given the rise in the annual average from 5,000 to 10,000, he said.

Continuing on the 2011 report, Suparat said that there were three channels for luxury cars entering Thailand – smuggling of parts that were later assembled, which accounted for 80 per cent of the 5,000 cars and Bt7.6 billion (S$312,512 million) in lost import tariff; complete-built-up (CBU) import (10 per cent and Bt1.04 billion (S$42,765 million) in lost tariffs), and imports of second-hand cars made legitimate through change of fabricated ownership (2 per cent and Bt89 million (S$3.66 million)).

Meanwhile, senior Department of Special Investigation official Wannaphong Khotcharak warned owners of smuggled luxury cars or illegitimately-assembled cars not to remove computerised vehicle control units, as the practice may result in permanent damage to their cars and doing so might not escape detection by DSI inspectors.

The DSI have appointments today with owners of four luxury cars. Inspections are underway to verify authentication of ownership and import registration documents of 548 luxury cars owned or bought by rich people on a DSI list.

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