Car demolition plan has pitfalls
The Excise Department should carefully consider the so-called "car demolition roadmap" being tabled for discussion tomorrow by representatives of the automotive industry.
The roadmap as proposed by the auto industry encompasses incentives, cash rebates for new car purchases, and higher car renewal tax to encourage motorists to bring their used cars in for demolition and buy new vehicles.
The Federation of Thai Industries' auto industry club under Khanchit Chaisupho has painted an image of old cars, those that have been used for over seven years, as villains on the road because they "emit more CO2 as well as fine PM2.5 dust", which has been a major cause of health problems for city dwellers in recent past years.
According to the auto industry club, Thailand, unlike some of its neighbours such as Malaysia, China and Japan, still does not have vehicle demolition plants and there are 39 million cars in total. Of that number, 26 million were registered with the Land Transport Department before 2009. Among them, nine million are private cars.
Whether old vehicles should be phased off the roads through higher tax measures has been up for debate for a long time but the government has always stopped short of taking action due to strong resistance.
However, the auto industry club insists allowing old cars on the road "does not comply with international standards in developed countries where old cars are subject to higher annual fees and taxes because they release more emissions than new ones".
In Thailand, it's the opposite. Car owners normally enjoy lower annual fees and taxes at the Land Transport Department after their cars have been used for more than seven years. With such a tax structure, incentives are lacking for owners to buy new cars.
The auto industry club said it needs state support for the proposed car demolition scheme to go ahead. The scheme is part of the circular economy strategy to bring a higher value to the whole automotive sector -- new cars, used cars and recycling businesses. The club also insists the demolition scheme is in line with the Land Transport Department's plan to increase the annual fee for compulsory third-party insurance, with old vehicles paying higher renewal fees.
Under the proposed scheme each owner of an old car will receive a cash coupon from the Excise Department to buy a new car. It also wants the measure to be extended to 10-year-old cars in the future in order to adopt the demolition plan for the whole automotive sector.
It was reported that the industry club has raised this matter with the Excise Department on many occasions, but it gave it particularly strong push this year after the industry experienced slow growth as a result of the sluggish economy. Slightly more than 838,000 cars were sold from January to October this year, compared with more than one million last year.
But the Excise Department should take into consideration that proposed higher taxes for old cars will have an adverse impact on a large number of car owners, particularly middle income earners, while the auto industry will emerge a winner. Cash rebates for new cars which lessen state revenue is a no-no.
Higher tax measures should be avoided as it is well-known that, while commuters in Western countries have various travel options as a result of efficient public transport systems, in Thailand, a poor mass transport system, dilapidated public buses, and a costly electric rail system force city commuters to own a car.
The state should be firm that the private sector should invest in the proposed car demolition plants. Any support it provides to the operators should come in the form of tax incentives.
At the same time, the state should toughen measures to ensure owners of old cars keep their vehicles in good condition through stringent roadworthiness checks.
But if the government is serious about the air pollution problem, what it needs to do is curb the private car population by making the mass transit system more attractive. That means a complete network and affordable fares, and possibly imposing measures such as traffic charges in certain zones to discourage commuters from using private vehicles.
The economic slowdown has hit the auto industry hard. Nevertheless, the industry must improve its capacity to remain competitive and pay more attention to new technologies such as electric vehicles.
Bangkok Post editorial column
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