'Unbalanced view' of facts regarding second-hand car imports

We refer to the editorial of the September issue of your Motoring magazine included with the issue of The Sunday Times of September 14, and to the article "Appeal for 'polluter pays' in second hand car imports" on page 7 of the same issue, both written by Malcolm J. Naudi.

A reading of both articles cannot but bring us to conclude that the writer did not make a thorough verification and assessment of facts before proceeding to print and that, as a result, both articles present as facts assertions that are outrightly unfounded and fraught with inaccuracies and misconceptions.

It is furthermore evident that, whether purposely or otherwise, the article, with the clear impression given to its readers, serves directly the interest of third party competitors of our members.

In this connection we would draw the following to the attention of your readers with specific reference to the "facts" as presented by Mr Naudi:

1. "... The specifications of the cars and other vehicles being imported are different from European specification." (Motoring editorial)

This is not correct. Through its close association with VCA - the Vehicle Certification Agency (being part of the Department for Transport of the United Kingdom) - and its set-up in Japan, UVIA ensures that each and every vehicle being imported conforms strictly to European standards and specifications of vehicle models, prior to loading and shipping. These are the same exact specifications that have been issued by the Malta Transport Authority (ADT).

Any car which fails this tight inspection is simply not sent to Malta. In this manner, all members adhere strictly to the particular requirements of Legal Notice 93 of 2003, which states that every second-hand vehicle imported into Malta will have a single type approval certificate by an internationally recognised inspecting agency (such as VCA) chosen by the importer and approved by ADT.

2. ".... The after-sales service and warranty (if any) offered with those imports is inferior compared to new cars, or even non-existent" (Motoring editorial)

This is a misleading statement. The second-hand vehicles imported by our members carry a six-month to one-year warranty - this is consonant with the strict testing measures adopted prior to their importation.

3. ".... Importers of these vehicles have been given a loophole - an MOT test in Cyprus - that is facilitating their entry." (Motoring editorial)

This is absolutely false and is a clear indication of an instance where not even basic facts have been verified. Model reports have been professionally carried out in a licensed VRT station approved by ADT, by senior mechanical and electrical engineers of VCA, who have been engaged by UVIA. The VCA of the UK (which itself acts as a Standards Organisation with due approval of the British Government) carries out a set series of tests on all car models being imported by UVIA members.

In accordance to such model reports VCA inspect the members' imported vehicles prior to shipment, to ensure that such vehicles meet the specifications issued by ADT. These tests, completed to the satisfaction of the VCA, UVIA and ADT, are themselves testament to the high standards that such vehicles are to have prior to their importation.

As a result, customers now have the added benefit that any car they purchase from UVIA members is duly certified by a Vehicle Standards Organisation of international repute.

It is to be pointed out that even prior to this association with the VCA, cars imported by UVIA members were duly tested. In fact, when the VCA testing started to be implemented, only minor deficiencies to side indicators in certain models emerged. Otherwise all cars were found to be compliant with ADT specifications. One is talking here of Japanese cars, already manufactured to standards which are as high, if not higher, than European ones.

4. "... These second-hand imports do not even comply with Euro 1 emission standards." (The Sunday Times article - quoting Dr Georg Sapiano, secretary-general of the Association of Car Importers Malta and paradoxically also legal adviser to the Malta Transport Authority).

This is also absolutely untrue as UVIA can show both Dr Sapiano and any other interested party who cares to enquire. Each car imported by UVIA members is - prior to its importation - tested and approved compliant not only with EC Directive on Emissions but also on EC Directives on all other related matters from rear-visibility to brakes; seatbelts to speedometers; plates to retro-reflectors, etc.

5. "...We have people spending Lm7,000 and more on second-hand cars" (Motoring editorial)

Cars purchased by our members range from all price brackets, however the most popular with customers (as may be duly and quite simply be verified at the Licensing Office) fall within the Lm3,500 to Lm4,900 price bracket. This price range - for cars already subject to strict testing as detailed above - covers vehicles in both diesel and petrol models, with factory-fitted air-conditioning system; anti-lock braking system (ABS); power steering and single/dual airbags.

The reasons for the popularity of such cars are therefore not difficult to identify. In this sense it may perhaps have been more beneficial to readers if Mr Naudi had carried out a proper survey identifying the actual reasons for such popularity rather than engage in a seemingly one-sided and severely prejudicial exposition.

6. " A level playing field means that those who invest in training staff, high quality premises and after sales service are given a fair chance to compete in the market." (Motoring editorial)

In this regard we agree with this statement but with an entirely different perspective. The playing field is not at all level. Is Mr Naudi aware that importers of new cars pay duty (where applicable), VAT and registration tax when the vehicle is sold thanks to their bonded stores system, while second-hand car importers must pay duty, VAT and registration tax before the vehicles are released from customs?

Is Mr Naudi aware that new car importers pay duty and registration tax on price indicated on invoice, while second-hand car importers pay duty and registration tax on the valuation worked out by the customs valuation office?

Is Mr Naudi aware that at present, UVIA members are not allowed to apply for bonded stores at their premises unlike new car importers? Should Mr Naudi wish to delve further into this matter, UVIA is prepared to show him how its members pay millions of liri to the Customs Department and the Licensing and Testing Department according to the cubic capacity of the vehicles' engines.

He should perhaps care to know that a vehicle between 1300 and 1500cc pays a minimum of Lm1,600 plus Lm240 VAT to the Licensing and Testing Department for initial registration fees, as well as 12% of the valuation established by the Customs Department Valuation Office times an overall 15% VAT. Thus Government on such vehicle nets circa Lm2,400. Level playing field indeed!

The reference to investment in quality premises and after-sales service as being restricted to importers of new cars is incorrect and unfair. UVIA is prepared to take Mr Naudi round the various showrooms and mechanical and technical garages, where he can easily see and attest the significant investment and high degree of professionalism, with consonant level of employment, evidenced by our members.

It is also ironic to note that there was a time not so long ago, when the majority of new car importers, all members of Dr Sapiano's Association, were themselves importing second-hand cars from Japan. Only recently a couple of them contacted some of our members to sell surplus second-hand cars to them.

Echoing Dr Sapiano in his comment on emissions and shedding doubts on the engine and mileage of these second-hand cars, Mr Naudi writes: ".... All you need to do is spend a bit of time following one of these imports."

Well, regrettably, this is what Mr Naudi himself failed to do and hence the gross imbalance and misconceptions of both articles, which could not go unanswered. Mr Naudi, who evidently did spend time with Dr Sapiano as secretary general of the Association of Car Importers Malta, did not contact anyone at UVIA to verify or double-check facts; or to get their version and consequently rushed to print a totally incorrect and unbalanced view of the facts at issue. This has caused grave prejudice to the members of UVIA with their very heavy investment in this sphere and the livelihood of their own employees.

Third party competitors may be duly alarmed by the fact that imported second-hand cars have been registering a very steady increase in sales, up to a stage (according to Mr Naudi), where practically half the cars sold locally are sold by UVIA members. This itself reflects a specific trend in other European countries, the United States and New Zealand, among others. In the UK alone circa 150,000 second-hand vehicles are imported annually from Japan.

These third parties may be excused for acting defensively. Quite frankly, however, Mr Naudi cannot be excused for writing about a delicate and highly investment-intensive area of economic activity, with only one bell to toll and without even making any proper effort to get to know the other side of the story and objectively verify facts before presenting them as such to his readers.

While our association members reserve the right to consider further action, we hope that publication of this letter will serve to somehow set the record straight and lessen the serious prejudice occasioned by both articles mentioned herein.