Emission test discount helps level playing field for parallel importers

Mr Nicholas Wong, general manager of Kah Motor, said parallel importers have an "unfair advantage" in the form of a discount on their emission tests ("Parallel imports zoom ahead in car sales"; May 14).

Regarding the "unfair advantage" due to the fixed evolution coefficient factor (EC), we wish to highlight that the EC is allowed because, unlike authorised dealers who are generally provided emission test reports by their manufacturers where their vehicles are run in, parallel importers do not have access to such reports.

Parallel-imported vehicles are tested locally, and these vehicles are not run in at the time they are being tested. Therefore, they would generally have higher emission values.

The EC of 0.92 allows parallel importers to better compete against authorised dealers by giving them an equal opportunity to benefit from the incentives offered for low-emission vehicles.

Thus, the EC factor is to level the playing field rather than give parallel importers an unfair advantage.

Authorised dealers have repeatedly suggested that there are double standards in the industry that benefit only parallel importers.

The Land Transport Authority addressed the issue regarding the EC in a letter to The Business Times last year ("Applying fixed EC does not give parallel-import cars an advantage"; July 21, 2015).

It clarified that emission testing of parallel-imported cars does not provide any advantage to parallel importers. Moreover, the application of the EC is subjected to strict guidelines and requirements in order to qualify.

Recently, news has surfaced that severe inaccuracies have been found in manufacturers' reports. These reports are typically permitted to be used by authorised dealers without further verification.

Therefore, in order to forge a truly level playing field, authorised dealers should be subjected to the same inspection process as parallel importers, to avoid further comparisons and inaccuracies.

Since the liberalisation of import rules in the 1990s, many parallel importers have grown to become prominent players locally and regionally.

Parallel importers bring greater price competitiveness and better product variety to the table.

Today, soaring sales of many parallel-imported models serve as the best testament of their success.

This is not because of any unfair advantage, but because parallel importers are fierce competitors, and they are here to stay.

Neo Nam Heng

Immediate Past President

Automobile Importer and Exporter Association

A version of this article appeared in the print edition of The Straits Times on May 25, 2016, with the headline 'Emission test discount helps level playing field for parallel importers'. Print Edition | Subscribe