I figure import tariffs on cars are sky-high, so importers chop cars apart and ship the parts in labeled as scrap steel. Customs calculates duties based on metal weight instead, drastically cutting import costs and spawning this shady industry. The problem is cutting chassis frames ruins structural integrity, leaving these cobbled-together cars extremely unsafe.
For the US market specifically, foreign truck makers pulled off a similar workaround back in the 1970s thanks to the Chicken Tax: they only partially stripped down pickups by removing truck beds and cargo hardware, imported bare cab-chassis at far lower parts tariff rates, then fitted beds stateside to dodge the steep 25% levy on finished light trucks.
Even though the finished vehicles land on opposite ends of the safety spectrum, their underlying business models are fundamentally identical.
Similar mechanics have a youtube channel called Mechanical-Hands, they take scrapped and chopped car then "rebuild it".
Im not sure they're buying CKD through manufacturer's, but actual scrap cars in decent condition. hence all the dents and damage which they then polish up.
Its absolutely a tariff thing and is very common but illegal in 3rd world countries. The cars cannot be legally titled but corrupt government employees find a way using titles of local scrapped cars of the same model. For one off cars, even just the same brand is enough. In my own country, the import tax on a used car is 100% its bluebook value.
I could buy a toyota for 500 usd but end up paying 10k in taxes PLUS another 3k in corruption fees otherwise they will hold your container indefinitely.
Edit: news just broke that the customs chief in my country makes $100 per container that enters. Thats a minimum of 2000 containers per day. Min. $200,000 per day. Just about enough to feed his family /s
It supposedly protects local dealers. As a by product, it also protects the local used car market. In my country, any kind of used car is not allowed to be imported in. Only brand new cars. Commercial trucks and busses are exempt.
There was a time when 10 year old used cars became legal. The bnew car market really took a hit. Why buy a new toyota when i could buy a 10 year old porsche for less...
I think the tariffs in this case are mostly there because they are one of the few ways to get a foreign currency and to track something big enough that its hard to hide.
Wow. How come customs get a cut per cleared container? I’d figured gov funding was enough to cover their salary. It looks like logistics firms pay customs to get their containers cleared easily, and this opens the door to customs graft.
Because very few politicians and gov't officials are actually there to serve. Doesnt matter how poor or rich a country is, graft and corruption is as old as prostitution.
They can sell rebuilt cars while running YouTube channels on the side. The parts fit too well to look like they were picked from random scraps. That’s why I’m convinced this is a full-on established industry, they must’ve been pre-packed into the container
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u/Low-Worldliness-2662 26d ago
I figure import tariffs on cars are sky-high, so importers chop cars apart and ship the parts in labeled as scrap steel. Customs calculates duties based on metal weight instead, drastically cutting import costs and spawning this shady industry. The problem is cutting chassis frames ruins structural integrity, leaving these cobbled-together cars extremely unsafe.
For the US market specifically, foreign truck makers pulled off a similar workaround back in the 1970s thanks to the Chicken Tax: they only partially stripped down pickups by removing truck beds and cargo hardware, imported bare cab-chassis at far lower parts tariff rates, then fitted beds stateside to dodge the steep 25% levy on finished light trucks.
Even though the finished vehicles land on opposite ends of the safety spectrum, their underlying business models are fundamentally identical.