Sun | Sep 23, 2018

Jamaica weighs damaged car repair, export under logistics hub

Published:Wednesday | October 29, 2014 | 12:00 AM

Tameka Gordon, Business Reporter

The Trade Board Limited is weighing the lifting on the moratorium on damaged car imports, under a new policy that ties the business into the larger logistics hub programme.

But Kent LaCroix, chairman of the Automobile Dealers Association, has come out strongly against it, saying it would once again expose Jamaican drivers to unsafe vehicles.

"I want to place it on record that I am against this policy," said LaCroix, who initially voiced his objection at a public forum last Thursday.

The suggestion made by Hussey on how the policy would work "is something that nobody has done before and the thought is that 'Hey, why can't we be the first?'" LaCroix charged.

"I think that we have a lot more important things to do. Bringing damaged vehicles that could endanger the lives of our people, I think it would be a retrograde step," he commented to Wednesday Business on Tuesday.

Trade Board chairman Benthan Hussey signalled, however, that the auto facilities would be structured in such a way as to police standards.

Under the new plan, approved auto repairers could import the vehicles and restore and export them.

Eventually, the cars could be sold locally as well, according to the Trade Board, whose chairman has also been tipped as head of the damaged vehicle task force.

The importation of damaged vehicles was suspended six years ago amid concerns that the vehicles were being brought into Jamaica without proper documentation of the level of damage, resulting in revenue leakage from the customs department.

The true status of the vehicles was often detected only after accidents and repairs.

Under the new policy, Jamaica is eyeing markets in the Caribbean, South and Central America, as well as in Jamaica for the repaired vehicles, the Trade Board said at a sensitisation session last Thursday to discuss the new motor vehicle import policy.

However, Hussey said the programme was targeted more at the export market rather than replenishing the local stock of motor vehicles.

"It is a proposal for reopening. The Government tasked us to look at the implications," and whether the plan was feasible, Hussey told Wednesday Business.

Caymanas Economic Zone

Eric Deans, chairman of the Jamaica Logistics Hub Task Force, confirmed, when contacted that the motor vehicle repair is seen as one of the opportunities for the Caymanas Economic Zone being developed by Government as well as private sector company - Kingston Wharves' Total Logistics Facility, and would likely be located in these spaces, should the policy come to fruition.

"If you look at the expansion of Kingston Wharves and the Total Logistics Centre, part of that building involves setting up an automotive centre because they are already in the process of trans-shipping cars. What they are building in their logistics centre is providing other value-added service to those cars," Deans said.

The Logistics Hub Task Force also foresees investors bringing in and adjusting or customising vehicles from Asia, for example, switching them over from left-hand to right-hand drive, or assemblying vehicles with designated economic zones.

Jamaica will phase out its free zones next year, in conformity with World Trade Organization rules against export subsidies, but will replace them over time with about 16 newly incentivised special economic zones or SEZs.

Used car dealers were banned from importing damaged cars in 2004, while individual imports were banned in 2008.

"There were also concerns of the level of repairs done to the vehicles, which often were limited, and led to accidents on our roads," Hussey said.

Regarding the safety issues, he said the new system under consideration would centralise repairs of the vehicles and reduce the risk of recurring problems.

Deans said both local and overseas investors would be invited to run auto repair facilities, even as he noted the myriad of value-added services the sector could provide through vehicle trans-shipment.

"For example, when orders come in, they can be customised - whether that involves spraying them in a particular colour or just putting in CD players," he said.