HispanicVista Columnists

Economics/Environment News

Frontera NorteSur

For different reasons, Mexicans are warily anticipating the enactment of a federal government decree that will restrict the models of used cars which can be legally imported into their country. The decree will limit to ten years the age of used cars that can be introduced into Mexico for sale. The measure will replace an August 2005 regulation that permitted the importation of vehicles as old as 15 years. Additionally, the new rules will require that used vehicle importers pay the 15 percent value-added tax (IVA) on the declared full value of all units. Currently, importers are charged the IVA for only 30 percent of the declared value of the vehicle.

Fernando Avila Ortega, director of the Ciudad Juarez Association of Customs Agencies (AACJ) warned consumers will feel a price pinch. The new rules will "severely hurt" automobile owners, Avila said.

Alberto Rivera Gutierrez, leader of a used car dealers' organization in Ciudad Juarez, said 25,000 local families who earn income from the sale of imported used cars could be economically squeezed by the federal restrictions. Rivera added that car sellers are analyzing the possibility of obtaining court orders to block the decree. He contended that car buyers will also be hurt by excluding many models from the marketplace.

"A factory employee will never be able to buy a car from a new auto dealership if the least expensive monthly payment is about $170, which implies almost four weeks of wages to make the payment," Rivera said. "The automobile is a necessity, not a luxury,"

Both Avila and Rivera predicted the new federal rule will encourage official corruption, boost the black market and diminish government revenue from legally imported used cars.

AACJ statistics report that 170,539 used vehicles were legally imported into Ciudad Juarez from the US and Canada in 2007. Ninety percent of the imports were models more than ten years old. In contrast, 7,128 new cars and trucks were placed at auto dealerships in the city during 2007, according to the AACJ.

Of 450,000 vehicles registered in Ciudad Juarez, 90 percent are older, dirty models acquired from Mexico's NAFTA trading partners, according to the Mario Molina Center, a non-governmental environmental advocacy organization. The Molina Center estimated that 63 percent of the imports are gas-guzzling vans and minivans, pick-ups and SUVs.

In a 2006 study, the Molina Center used detectors to measure auto emissions in Ciudad Juarez. Researchers found that used US imports emitted 50 percent more in contaminants of nitrogen oxides and hydrocarbons and 38 percent more in carbon monoxide pollution than other vehicles. The environmental group reported that while only 2 percent of legally imported used vehicles were visually inspected, not a single auto or truck was subjected to an emissions test at the moment of its entry into Mexico. Federal Economy Minister Eduardo Sojo justified the pending used vehicle import restrictions because of environmental considerations and negative economic impacts on Mexican auto dealers who say they face unfair competition.

In 2009, Mexico will be open territory for all imported used vehicles under the provisions of the North American Free Trade Agreement. Next year's liberalization of used car imports has environmentalists worried. In recent comments, Economy Ministry chief Sojo insisted that strengthened environmental regulations for imported used cars and trucks will be ready by next year so Mexico doesn't turn into a "junk yard."

In October 2007, the federal Environment and Natural Resources Ministry began monitoring air contamination from vehicle emissions in northern border cities as part of a program to help local authorities design adequate pollution control programs. Tijuana and Mexicali were the first cities studied by environmental officials.

Used car dealers' spokesman Rivera argued that government policy should focus on the mechanical condition of each vehicle rather than singling out model age and stinging consumers with higher costs.

In many border cities, sprawl coupled with inconvenient or unsafe public transportation favors the popularity of personal automobiles and trucks. Proximity to the US assures a steady, brisk market for old autos, trucks and SUVs.

In fits and starts, some local governments are grappling with alternatives to the used car culture. In Ciudad Juarez, for instance, the new municipal administration of Jose Reyes Ferriz has identified expanded public transportation as an important public policy goal. Two new bus routes from central Ciudad Juarez to outlying neighborhoods are planned for inauguration this year.

Wider implementation of a public transportation plan, however, is running into snags. Maria del Rosario Diaz Arellano, general director of the Municipal Research and Planning Institute, said completion of the final stages of a vital study is being held back by delays in the release of funds from an approved World Bank grant for $2 million.
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Sources: El Diario de Juarez, January 29 and 31, 2008. Articles by Juan de Dios Olivas, Horacio Carrasco, the Notimex news agency, and editorial staff. La Jornada, January 21 and 30, 2008. Articles by Angelica Enciso L.

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