MEXICO: Dealers prepare to fight used vehicle import liberalisation

By just-auto.com editorial team | 25 October 2005

The Mexican Association of Auto Dealers (AMDA) says it is prepared to fight the government's legalisation of hundreds of thousands of used vehicles, imported from the US every year, in the international courts of justice, if necessary, according to autonewsmexico.com.

President Vicente Fox decreed on August 22 that vehicles between 10 and 15 years old could be imported from the US and would be given provisional licence plates or permits allowing them to be driven on Mexico's roads.

His announcement came a matter of weeks after Fox promised he would never legalise the trade.

Andrés Ocejo, AMDA's president, claims the government has acted illegally because, he told journalists in Mexico City on October 20, under the terms of the North American Free Trade Agreement (Nafta), such imports are not permissible for another two years.

Mexico's autoparts industry association, the Industria Nacional de Autopartes (INA), has already accused Fox's government of "violating done deals," of "going outside the legal framework" and of "creating uncertainty" in the supply sector.

Under the decree, second hand vehicles, from passenger cars to buses and trucks of up to 4.5 metric tons, can now enter the country legally. Buyers are also being levied a tax of 10% percent of the vehicle's purchase price.

Automotive industry representatives estimate at least one million such vehicles, which they refer to scornfully as chocolates, enter Mexico every year. They claim the practice has drastically reduced the growth of the national market for new vehicles.