Govt. urged to review car trade law
The government has been urged to review its decision to limit the age of vehicles imported into Samoa from twelve to eight years.
New Zealand-based lawyer, Haseeb Ashraf, who spoke on behalf of his family’s business, Apia Motors, says the decision will not only negatively affect members of the public who will not be able to afford vehicles, it will also discourage potential investors from coming to Samoa.
He says more thought should have been given to the change of law before it was passed. The change in question is to come into play on 17 January 2017. This will mean imported vehicles will now have had to be manufactured in 2009.
Prime Minister Tuilaepa Sa’ilele Malielegaoi is standing by his decision, saying the times are changing and there is a need to bring in newer vehicles.
“It doesn’t mean that we import cars and continue on with (importing) rubbish,” he said. “In this life we move forward. When you start bringing in cars, the next thing you want is a brand new car.”
But Mr. Ashraf says the impact of the decision is enormous. For instance, after 17 years of service to the Samoan community in New Zealand through Tarnica Cars, and four years of service here in Samoa with Apia Motors, Mr. Ashraf says they are reviewing their options. One of them is packing up and leaving. He says the government is showing the world they aren’t business-friendly.
“It’s going to be very difficult for not only us, but many members in the industry to survive,” Mr. Ashraf told the Sunday Samoan. “We are reviewing our options and one of those options is packing up. That’s very unfortunate because we employ locals, we give a lot business, and we pay taxes and everything."
“For us in particular, we have a very special connection with the Samoan people in New Zealand and here. We are a family business and our family has been working with the Samoan community for the last 17 years so it’s going to be very sad if we have to leave. But as I said, the government has made it very difficult.”
Mr. Ashraf says the way the law came about is odd. The public, as well as members of the industry, were not given a chance to voice any concerns.
“As a lawyer, it’s very interesting to see how this law has come into play. We found out through someone who has connections through the P.M’s office and that’s not the way it should have been."
“In New Zealand when a bill is brought to Parliament, there’s an opportunity for the public to make submissions, there’s a select committee that sits down and reviews how much the damage is going to be."
“When the submissions come in, people like us can go, lobby and discuss this with the P.M. I mean we found out that this law will come into play in a month or two and that’s not how this is supposed to be.
“Going forward, I think it’s very important that if a law comes into play, there’s an opportunity for everyone to have a say.
“And then everyone; the public, the businesses, the government, the Parliament, the Ministers can all sit down and have a discussion as to how (much) the losses are going to be; how the government can protect the businesses, and how the government is going to ensure that the cars are still going to be affordable for the Samoan people.
“The P.M. says that people want new cars but you and I both know that not everyone can afford a brand new car worth $45,000.”
Mr. Ashraf says that once the law is in place later this month, starting prices for used vehicles will jump from $12,000 to $27,000.
“I had a look at an article on the Prime Minister where his concern is that Samoa will be a dumping ground for the cheap vehicles and the fact that times are changing and new vehicles are needed,” he said. “He says that we are importing rubbish and that a lot of people are purchasing new cars even before the coming of this law.
“That’s what he said but there are two groups of people who are going to be affected. Firstly, this is going to have a huge impact on the Samoan people in purchasing cars. Just to throw figures out there, right now, cars in the market can start from $12,000, that’s a starting car, not what everyone wants to get.
“That’s a starting rate, once through the coming of this law, cars won’t be able to come into the country below 2009 and what’s going to happen is that the starting price will increase from $12,000 to a minimum of $27,000.
“That’s a huge difference and people need to understand that Samoa is a developing country and in a developing country it is very important that the law of a country caters for the need of the people.”
Furthermore, Mr. Ashraf says that this $15,000 jump will be a huge blow to the everyday Samoan and that the government is just taking a shortcut from what they should actually do to stop rubbish vehicles from entering the country.
“A car in Samoa is not a luxury; it is a necessity for a lot of people,” he began.
“There’s a difference. And due to the price of used vehicles, a lot of people were able to purchase vehicles and now it’s going to be very difficult for the average Samoan family to purchase a car.
“They will have to make a lot of sacrifices to purchase a car. The government needs to understand that this is not a developed country.
“Looking at a developed country like New Zealand, even there, 2004 cars are accepted into the country and what I, as an observer, can see is that the government is taking a shortcut.
“Because the L.T.A. wants high quality cars from what I understand, they don’t want rubbish coming into the country, but instead of just saying that nothing below 2009 should come, there should be a process where vehicles can be accepted after passing a few tests.
“For example the frontal impact assessment test which takes into account the airbags, safety and that.”
Mr. Ashraf went on to mention a few different processes that the government can take in order to still prevent rubbish vehicles from entering the country while maintaining a business friendly atmosphere with the used vehicle industry.
“This (law) is not the solution,” he began.
“There could be a car that is 2009 that has been driven 200,000km. That’s not the issue, the issue is that the government can import under other regulations such as cars over 120,000km driven should not be allowed into the country.
“That’s understandable. Or cars which don’t pass the frontal impact test should not be allowed into the country; that’s understandable.
“This government is taking a shortcut and in taking that shortcut, it is not putting on the responsibility of the L.T.A. that there should be.
“This is not any solution, in saying that, what’s happened happened and we can’t do anything about it.”
Another major issue will be the increased pressure on Samoans both based New Zealand and here in Samoa to purchase vehicles for themselves or their families.
“The major concern that people need to understand is affordability,” Mr. Ashraf said.
“Now, Apia Motors is a family business and we have been here for four years. We have another family business in New Zealand called Tarnica Cars.
“We have an arrangement whereby Samoan families can finance the cars in Auckland and they can pick up the cars here.
“We’ve been working with the Samoan community in Auckland for over 17 years. Because we worked with the Samoan community in Auckland, a lot of Samoan people in Auckland really love their family and their parents and want to purchase cars for them.
“Especially in Samoa because a lot of the population lives in the village and it’s very difficult for them to come to the market or go to the church.
“A car is a necessity, it’s not a luxury but unfortunately the public transport system in Samoa is not up there yet.”
And although the government may have a good motive for this law, Mr. Ashraf says that this is not the way to do it.
“In saying that, it is very important that the government understands the needs of the people,” he said.
“The government may have a good motive, but this is not the way to achieve it, it’s going to cause more harm than good.
“It’s also good to understand that a lot of the people have the misconception that their family overseas will buy them a car but I have a few friends in New Zealand who work extremely hard to put food on the table and they go out of their way to purchase vehicles and provide for their families in Samoa.
“So if the difference is going to be $10,000- $15,000, it’s going to put a huge burden on their family, it’s going to be very unjust on them as well.
“The Prime Minister says that people can afford new cars. Most of the new vehicles are purchase by the government or the government officers and the local people are out of reach.
“I mean, we are talking about cars that are $45,000, it’s out of the range for most people and if they want to purchase those cars then they will have to make a lot of sacrifices.”
Aside from the increased pressure on the public due to the increase in starting prices for used vehicles, Mr. Ashraf explains how the industry will suffer from the new law.
“We are a business and we are going to get affected as well,” he said.
“The industry is going to suffer a lot. It’s a small industry but we provide a lot of revenue and tax for the government, we employ a lot of the locals and apart from that, we provide a lot of business to the industry such as mechanics.
“That’s going to suffer as well. Unfortunately it is going to be very difficult, according to our analysis, for businesses like ours to continue to operate in Samoa.
“The government has made it very difficult for us. Samoa is changing year by year and we want to be part of that but like I said; it’s going to be very difficult.
“This sends a very bad message for investors and business people, who want to invest in Samoa, that government isn’t business friendly.
“So everything which happens, there should be a win win situation but the government is making it so that it’s not a win situation for the people, and not a win situation for the businesses.
“Yes, they want to modernize Samoa but they aren’t as developed as New Zealand and they have 2004 cars coming in.
“If you have that idea, that rubbish is coming into Samoa, then improve your safety regulations, improve the assessments that L.T.A. conducts on the ground, and limit the mileage meter.
“That’s understandable and the industry can cater to that.”
Furthermore, Mr. Ashraf says that with all the negative impacts, the government might have to review this law after a few months.
“At the end of the day, its guess work,” he said.
“The government has conducted an assessment, however they’ve done that, and its guess work as to what’s going to happen.
“Our analysis in the industry is that it’s going to have a huge impact for the people as well as us. If that is true and it comes in the next couple of months, the government is going to have to review their position.
“The law is what it is, but I think on a practical level, it’s important for people to understand the types of impacts it’s going to have.
“As I mentioned two figures, right now the starting price on a used Japanese vehicle is about $12,000 but once all those cars run out in the market, which will be in a few months, we’re going to look at a $27,000 starting rate which will be difficult for a lot of local people to afford.”