Used auto inspection ‘redundancy’ dispute

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Advocates for the pre-inspection of Japanese auto exports yesterday leapt to the initiative’s defence after a veteran used car dealer branded the checks “redundant”.

Brent Fox, who plans to relaunch his Montague Motors venture this March, told Tribune Business that the Japanese system overseeing used car sales provided sufficient protection for Bahamian consumers without requiring the inspection regime the government recently signed up to.

The Minnis administration last month signed a contract with Yokohama-based EAA, which will conduct safety/roadworthiness inspections on used Japanese vehicles before they are exported to The Bahamas, but Mr Fox argued that the move was “unnecessary” because it duplicated inspections conducted before such autos can be sold.

He explained that Japan prevents used autos from being sold by individuals and dealers via private sales, instead requiring them to be disposed of at public auctions. Before any bidding/sale can take place, Mr Fox said all autos have to undergo a thorough inspection to ensure purchasers are protected and receive what is advertised.

Bahamians also benefit from such measures that are designed to protect Japanese consumers, he added, arguing that the EAA contract effectively represented the addition of an extra layer of inspection bureaucracy and red tape.

Mr Fox, who said he has been to Japan multiple times to acquire vehicles and witness the inspection process, also alleged that the checks conducted by examination providers such as EAA were relatively rudimentary and often performed “at the dock”.

He argued that the $150 inspection fee, which will likely be passed on to Bahamian auto buyers in the vehicle price, would “hurt grassroots consumers” the most and suggested that the main beneficiaries from the contract will be EAA and new auto dealers.

Mr Fox also showed Tribune Business messages from his Japanese agent, who described such inspection processes as “worthless” and designed to make the testing companies “rich” by prevailing on foreign governments to hire them.

His assertions, though, were rejected by Fred Albury, the Bahamas Motor Dealers Association’s (BMDA) president, who said the testing that will be conducted by EAA from April 1, 2019, will be far more thorough than a simple “dock side” check.

Mr Albury, who accompanied the Bahamas Bureau of Standards and Quality on its early January 2018 mission to assess the Japanese pre-inspection process, reiterated that the EAA contract will ensure local auto buyers get “value for money” from imported vehicles that are safe and more environmentally friendly.

Arguing that the $150 inspection fee was a small price to pay for better road safety and vehicle quality, the BMDA chief added that the process would enable himself and other purchasers of used vehicles to have “peace of mind at night” over what they had imported to The Bahamas.

Questioning why The Bahamas should continue to be treated as “a dumping ground” for unsafe, poor quality vehicles, Mr Albury said of the EAA deal: “It’s the price we have to pay to have good and safe transport on the road.”

This, though, was challenged by Mr Fox, who said he had personally witnesses the pre-auction sales process that all used Japanese vehicles are put through - regardless of whether they are for the domestic market or exported to countries such as The Bahamas.

“My first couple of trips over there, I was curious and went into the inspection booths and yards,” he told Tribune Business. “I was impressed by how thorough they were; going into cars with high beam flash lights, which is way beyond what you get in the US. I was extremely impressed by the quality of the inspections.

“Japan requires that individuals cannot sell to other individuals; it has to first be inspected by a government-sanctioned facility to avoid any misrepresentation before it is sold at a co-operative auction. It’s a safeguard for the consumer that they’re going to get a good car according to what the inspection is. A car can’t be sold unless it goes through that process...

“Ninety-nine percent of the cars I brought in here were trouble free. If it was not like that, you would not have so many people buying off the Internet. The assumption is that the cars are pretty good, and it’s a rarity that you find one with a problem.”

Mr Fox said the quality of such pre-sale inspections meant the services of companies such as EAA did “not serve any purpose” other than ultimately adding to the price paid by Bahamian used auto buyers, many of whom were already stretched when acquiring $5,000-$6,000 vehicles.

“It’s a very short inspection, and quite often it’s done at the dock,” Mr Fox argued of pre-import checks. “It’s unnecessary. It’s a redundant process, a redundant inspection. The cars have to be inspected at the auction house by law. They’re so meticulous. Why do we need another inspection? It’s only to add cost.

“It hurts the grassroots consumer, the poorest of the poor people here. The people buying these cars can’t buy from new car dealers anyway. At the end of the day it only puts a burden on the poor people. I’ve been to Japan and know what I’m talking about.

“I know the inspections they carry out. All the stuff is covered, and covered very well. That is why Bahamians are buying cars in droves from Japan because they trust the system and know they’re going to get a good car. This [the EAA contract] is not consumer friendly. Calmer heads need to prevail.”

Mr Fox, who is hoping to meet with Dion Foulkes, minister of labour, to make his case on the issue, showed Tribune Business text messages received from his Japanese agent, Mr Yamimori of Zenbei Auto, to back his argument.

Mr Yamimori, confirming that The Bahamas was set to issue new regulations, wrote: “There are many inspection companies that are now promoting to governments in many countries to have the inspections. They are getting rich; too bad.

“Actually, it is a very simple inspection and worthless. It just makes more money for the inspection companies. Japanese inspection companies are pushing your government.”

Such arguments, though, were yesterday disputed by Mr Albury. While acknowledging that the annual inspection process was “very tough”, the BMDA chief said Bahamian auto dealers and importers alike needed added protection from “unscrupulous exporters” who frequently performed tricks such as winding back the odometer to show a lower mileage and increase the vehicle’s value.

“I’m not saying all the vehicles and exporters are bad,” he told Tribune Business, “but 90 percent of those who contact me tend to ask two things. One is: What value you want on the vehicle?”

Mr Albury said this was code for falsifying an invoice by undervaluing a vehicle, thereby allowing the importer to evade Customs duties and VAT at the border. The second question, he added, was: “What miles do you want on the odometer?”

Revealing that many exporters were non-Japanese, he added of the EAA checks: “The inspection process will give consumers confidence that if the odometer says 50,000 miles, it’s 50,000 miles.

“That the engine is in good working order, it has passed the emissions test, the struts, brakes and tyres - everything is in good working order. There is nothing to stop people importing cars. It’s just to ensure consumers get what they’re told they’re getting, not something else.”

Rejecting Mr Fox’s allegations of a basic “dockside inspection”, Mr Albury said: “Their facilities are a very tough process. They put the probe into the exhaust to measure the emissions, they inspect the brake pads for how much wear is left on the brakes, check the thickness of the brake pads, put the vehicle on a lift to inspect the under-carriage, check the braking force and slippage, and check the electrics and all the lights.

“I’ve imported used cars, and when they got here the engine’s got a knock; that’s a $2,000 job. The exhaust smokes, and the undercarriage has rusted out because it has been in a snowy area. They’ve got here and the AC is not working, and I have to replace the condenser or evaporator.

“It’s not 100 percent foolproof,” the BMDA president added of the EAA inspections, “but it will eliminate a lot of the garbage and ensures consumers are protected to a greater extent. It gives me peace of mind at night that the investments I’ve made are going to be good vehicles.

“All the Government is trying to do, and this is a government initiative, is to ensure consumers are getting value for money and are safe to use on the road. People have had it their way for too long, and now some controls are coming into play they’re starting to cry about it.”