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May 10th, 2008
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Drowning in jalopies

Overwhelmed by used-car imports, gov't seeks restrictions

By Michael Heitmann
Staff Writer, The Prague Post
May 7th, 2008 issue

VLADIMÍR WEISS/THE PRAGUE POST
The government is looking to curb the growing number of used cars coming in from abroad; some 212,000 were imported last year.
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When the European Union forced the Czech Republic to drop its restrictions on used-car imports two years ago, there were concerns that the country would become the automobile dumping ground of Europe.
Now, according to the government and business community, all of those fears have been proven true.
Thanks to a persistent influx of used cars from neighboring countries, the average age of a car in the Czech Republic soared to 13.94 years in 2007. Also last year, drivers imported 212,000 old cars, while buying only 132,000 new ones.
“In the first half of 2006, imports were liberalized under pressure from the EU, driving this negative trend,” Transportation Ministry spokesman Karel Hanzelka explained. “This is not a short-term spike but a persistent problem with adverse effects on road traffic security and environmental pollution.”
The blight of used cars has become a common cause between the government, automakers and even used-car dealers, all of whom blame the EU’s strict enforcement of its single-market rules for the jalopies puttering on the country’s roadways.
The government wants to restore restrictions on car imports. Moving toward that goal, Prime Minister Mirek Topolánek appointed a special interdepartmental committee April 28 to study the problem and find a solution.
The current situation amounts to the export of environmental waste from wealthier EU states to the Czech Republic, said MP Břetislav Petr of the Social Democrats during a parliamentary debate April 24.
“Owners [from foreign countries] who sell their cars to the Czech Republic would have to pay a substantial amount of money for the car’s recycling in their home country,” he said. Letting cars older than 10 years cross the border is nothing short of importing garbage, he added.
In a somewhat surprising turn, the local consensus even includes used-car companies such as AAA Auto, the country’s largest dealer, which went public on the Prague Stock Exchange last year.
“Guarding against these imports does not mean restricting free trade,” said Milan Smutný, AAA Auto’s spokesman. “It will protect our citizens and consumers.”
The Czech Republic cannot be an equal partner in the EU and have the unrestricted imports continue, especially since many of the imported cars are simply junk, he added.
Creative solutions
Under the country’s previous, repealed ban, used vehicles older than eight years could not be imported. Restrictions were even placed on newer cars, which had to pass a car safety inspection before being allowed on Czech roads.
The political pressure from the European Commission (EC), the EU’s executive arm, does not adequately account for conditions on the ground, the Transportation Ministry warned. Nonetheless, the government’s hands are tied.
The EC has already brought Poland before the European Court of Justice, the EU’s top court, for its discrimination against imported used cars. It is also pressuring Slovakia and Hungary, the ministry said.
In Poland, imported used cars have to pass a technical inspection. Domestic cars are not required to undergo road-worthiness tests, even if they are of the same age or change hands in a sale. Such technical controls on cars imported from other EU countries constitute obstacles to the free circulation of automobiles, according to the EC.
The Polish government says it needs to protect public health and the environment by inspecting imports, but the EC counters that these reasons alone do not justify the restrictive measures.
Now the Czech Transportation Ministry, which is urging the government to come up with new restrictions, is walking a fine line. The ministry wants to avoid being taken to court by the EC and so must avoid conditions as strict as Poland’s.
“Reintroducing age limits or similar criteria for the import of used vehicles is not an option right now,” Hanzelka said.
Instead, the authorities have brainstormed some new ideas. According to a draft plan, the ministry could strengthen periodic motor vehicle inspections to sort out those cars that do not conform to regulations governing safety and emissions.
Also, the Environment Ministry may impose new environmental duties, which would presumably help with car recycling costs. And the Finance Ministry could raise the administrative fees, taxes and conditions on automobile insurance.
These proposed fees and regulations could undermine free-market ideals. But, for many, the dream of owning a “Western” car, albeit a used one, has already turned sour.
“The import of used vehicles that have long surpassed their service life is connected to a large-scale fraud by dishonest dealers who ruin the industry’s reputation,” said AAA Auto’s Smutný, adding that “in order to sell these worthless used vehicles at a good margin, they manipulate odometers, give the wrong age and hide repair marks or other signs of previous accidents.”

Michael Heitmann can be reached at mheitmann@praguepost.com


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Reader's comments:

add your comment
[20:50 08/05/2008] : >> the ministry could strengthen periodic motor vehicle inspections to sort out those cars that do not conform to regulations governing safety and emissions.

They could also stop taking bribes, and actually examine the vehicles before giving out (or rather, selling) a certificate.
Margot Winston
Prague
[17:42 09/05/2008] : Yes, I know what you are saying Ms. Winston. The corruption, the pollution, everything overpriced, low earnings, Microsoft going aftter pirated copies, and the radar base!
Instead of complaining, I moved away! I earn four times more, and everything is cheaper here! I will be back though, to work at the radar base :}}}}
Philip
San Fran
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