Bolivia is awash with contraband cars from Japan | Hacker News Reader

Bolivia is awash with contraband cars from Japan

economist.com

98 pointslivueta80 comments

The irony is that Bolivia is a hotspot for lithium production. I love the diconnect. A country to poor to effectively control the import of illegal used cars, where cops can be bought off for 100$, is producting lithium for electric vehicles sold in the richest.

Bolivia is not a hotspot for lithium production. In fact, lithium doesn't rank among Bolivian exports at all.

https://commons.m.wikimedia.org/wiki/File:Bolivia_Product_Ex...

Bolivia has extensive lithium resources which are known to be economically viable, but development of those resources is still largely hypothetical, though a few small production facilities have opened in the last decade.

This must be one of the most common ironies in the world. It’s the story of most extractive developing economies

It's not that odd. Producing lithium is horrible for the environment, and places like Bolivia don't care very much if you don't (fully) adhere to environmental laws.

> The irony is that Bolivia is a hotspot for lithium production.

It's why there was a coup in bolivia a few years ago. Guess who was involved in that one? Hint, the same one involved in coups in ukraine, venezuela, iran, etc. Discovering major resources is both a blessing and a curse. It can generate wealth/development. It also brings in bullies who want to steal your wealth/resource. Hopefully bolivia can buck the trend and use their resource for the good of their nation.

Countries like bolivia, and other countries that slap very large (>50%) import duties on foreign-made cars, have a very funny side-effect.

Every 4 years it seems there is a model or brand that is cool, and that every elite seems to be driving. Is that the cool new car? The "in" brand. No. The cause is simple. Its 101 economics:

Import duties are usually managed on a country-by-country basis. Politicians will manage capital flight ("trade imbalance") by seeking higher levies on heavy industrial goods that are popular, like cars. Those levies lead to a situation where everyone seems to be driving the exact same brand new cars (and usually 1 particular make). However, its not that the brand is particularly popular, its only that the car maker offers the best value net of import duties, plus, importers are very wary of bringing cars with huge import fees.

So, the newer cars are always a few specific never-seen brands or makes. Then there are others driving slightly-older Y brand cars, far more generic. The oldest cars seem to have a lot of diversity and would resemble your average US used car sales lot.

The evolution of the duties can then be described as follows: 1) free market: very low cost to import any car 2) Some tough -but not insane- duties (particularly on US new cars). 3) Restriction / heavy levies on used car imports. 3) Very heavy import duties on most western new cars (vs Indian or Chinese makes).

That's interesting but Turkey has found a solution to the problem. Having one of the highest tax rates in the World[0], the country had to be creative, thus invented the "Special Consumption tax" or SCT , which is determined by the size of the engine and price bracket of the car.

When you buy a car in Turkey, on top of the import duties(if any) a SCT is added(anywhere from %45 to %150), on top of that a VAT is added(yes, VAT is calculated over the final price with SCT), on top of that other smaller taxes are also added(radio tax, stamp tax etc) and you end up with ridiculously expensive cars and you have no way out because you can't drive an unregistered car and you can't register your car without paying everything you have to pay. Also, the used car imports are tightly controlled to prevent undercutting the local market, to the point that it doesn't make any sense to import. Bringing your car from a neighbouring country is something you can do but for most it doesn't work out because you are limited to 2 years(it was 6 months till a few years ago).

This also inflates the second hand market, often making cars an investment because they barely loose value. Once you buy a car you are in the club now, you drive it for a year or two then sell it at a high price, put a bit more of your savings on top of it and buy yourself even better car.

[0] https://jalopnik.com/why-this-150-000-porsche-costs-600-000-...

Turkey has always had creative taxation schemes - as a British holidaymaker visiting in the 90s, everyone had to pop a fiver (sterling) into a hat at passport control.

It was a tenner in 2011.

Wait until you hear Turks have to pay 120 euros for a tourist visa to Europe...

Or that Turks have to pay 50 liras each time they exit the country.

Hey, that's even better than turning houses into investments, creating a house price bubble!!

Don't worry, houses are still an investment in Turkey - just as everywhere else in world.

If the taxes are THAT high - wouldn't it make sense to just buy cars in Greece and ship/drive them to Turkey?

When the 2 year period is up - what happens? Can you sell the car?

Just to be able to bring the car with you from abroad(but not import the car), you need to spend at least 185 days abroad. Once you are in Turkey, only you are allowed to use the car(you may let someone else drive but you must be present in the car).

So you can't just go to Greece, buy a cheap car and bring it to Turkey. The laws are designed to allow the Turkish diaspora or foreign visitors to come for work and a holiday in Turkey but to block any attempts of the citizens buying cheap cars from a neighbouring country and use them in Turkey.

When the 2 year period is up, you obviously start building up fines.

Turkey sucks at collecting taxes, there are a few areas where the country is effective at collection of taxes and automobiles is one of them and they are damn serious about it.

Another original Turkish tax collection method is on cellphones. Like the cars, taxes are very high on cellphones and to block bringing phones from abroad all the foreign devices need to be registered within 90 days of the first time the device picks up signal in Turkey(once the 90 days expire, the phone can no longer connect to the GSM network until registered). The registration price is hefty, making it not worth it. You are also allowed to register 1 device every few years and you need to register within the first 90 days of your arrival from abroad.

Denmark functions similar to this, i believe (i am danish).

Same in NL. BPM.

Nation Geographic's Trafficked has a fascinating episode on the stolen car market. The episode follows cars that are shipped out of the port of New Jersey to Ghana and documents just how organized the operations are.

https://www.nationalgeographic.com/tv/shows/trafficked-with-...

I read a story on an auto enthusiasts forum. A guy had his Tesla totaled in the US. He claimed insurance etc and disposed it off. And then out of curiosity he opened Tesla’s app and was able to follow the car all the way across the Atlantic to Czechoslovakia before the car was deregisteted.

FYI Czechoslovakia ceased to exist in 1992.

It traveled back in time then, must be a new beta feature :)

Ah hah! That explains why the cybertruck is raw stainless steel.

Dart, sorry. I should have said Czech Republic :-).

I feel obligated to point out that the preferred name is Czechia.

This story might have a lot less impact once you learn what it takes to total a Tesla. https://www.reddit.com/r/teslamotors/comments/8bbfo2/all_it_...

In Europe most of those kinds of small fender benders are almost considered cosmetic :)

This is a good example where import controls are obviously silly. Is Bolivia (pop 11M) going to have a domestic car industry? Does it make any sense to ship the raw materials for building a car 4000 meters up in the Andes instead of just shipping the car?

I assume it's as a source of tax revenue, not to protect a domestic car industry. The assumption is that in a very poor country these import duties fall on those able to afford them. But people want to roll...

Probably not, but not because of the population. Sweden's population is smaller (10.3 million) and yet it is home to Volvo and Scania.

Bolivia's population has increased sharply recently, while Sweden's has been growing much slower if at all. So historically Sweden doesn't look so small, and they share (somewhat) a labor and goods market with Germany, which has a huge domestic car industry and correspondingly offers the goods and services that car manufacturers need, and Denmark nearby, with shipping on the Baltic offering multiple excellent ports. Historically, in 1950 you have Sweden at 7M and Bolivia at 2.7M. Sweden is an outlier among small countries with its car industry thanks to all of these factors.

Additionally, while not all of Bolivia is mountainous, the sweltering tropical climate of the lowlands is not exactly germane to physical toiling in a factory building all day. And my point about labor resources includes diversion from other more worthy applications of the abilities of Bolivia's engineers: its domestic infrastructure (power/transport/water) is lacking and you can't import that. Sweden has had a long time to build a power grid and rail system and enjoys less challenging geography.

Yeah, but Sweden industralized a century and a half ago.

Quite a few developing countries have similar laws. It’s all about the import fees/customs that can easily be an additional 100-200% over the cost of a new car. In many countries there would also be once-a-lifetime exemption cards for the equivalent of federal government employees or veterans (that are often sold on the black market for a tidy sum to a wealthy buyer looking to import a luxury vehicle).

Since the very old times custom taxes and transit fees made a significant portion of income for countries and kings. The "tax the rich" is not new, it was the way it worked: if someone has something, tax it as much as possible. If some people afford to pay for a car and the taxes, then what stops the government to set huge taxes? It looks more humane than confiscating their money.

Bolivia isn't entirely 4000 meters up in the Andes, and two thirds of it aren't in the Andes at all; the eastern lowlands are as low as 70 meters above sea level. They have a navigable river to the Pacific (the río Paraguay); you could ship in barges full of iron ore to Puerto Suárez. It would be a longer trip than crossing the Great Lakes to River Rouge, but it wouldn't involve any costly overland shipping at all. Moreover, it has very substantial domestic ore resources, though those do require overland shipping if not smelted at the mine*, and they are partly in the Andes.

I don't know much about Bolivia, but as I understand it, Bolivia's lack of domestic industry isn't due to its population or its lack of natural resources; it's caused by political factors such as profound social division, a resulting nonstop social struggle (including a socialist revolution in 01952), foreign subversion by agents like Che Guevara and the US CIA and DEA, a history of poverty rooted in Spanish colonialism and apartheid, counterproductive economic policies like the auto import tariff (directed toward the comprehensively failed experiment of import-substitution industrialization), and insufficient capitalism in general. Historically it also suffered from widespread illiteracy, but that is no longer a problem. Like, for example, Montana, it almost totally lacks research universities.

Normally I hesitate to attribute poverty and oppression to conspiracy theories like "CIA subversion", but in the case of Bolivia, the evidence seems indisputable that the CIA were key supporters of the ultra-right-wing military dictatorship in the 01960s and the 01971 coup, as well as operating their own military operations independently inside Bolivia.

The economic situation improved significantly during the Morales years.

Hopefully lccarrasco or someone can correct me if I got this wrong.

______

* As far as I know, they aren't currently smelting at the mines, but then again, they aren't currently mining iron either.

I once hitchhiked from Mexico city to Rio (had to take an airplane from Panama to Colombia).

During that trip I saw many Wonderful sights, and met many Wonderful people, but I also saw a lot of extreme poverty.

Even so, the poverty in Bolivia was worse.

They lost the war of the Pacific to Chile and Peru, which cost them valuable land and resources, and made them one of only two landlocked countries in south America (Paraguay is the other)

May I ask about your use of a five digit year?

Oh, it's just a bit of fun: https://blog.longnow.org/02013/12/31/long-now-years-five-dig...

I wish I had a good source, but from what I've seen firsthand (well, by following the Japanese car community and having friends in it) there's a pretty large export market for stolen cars. Either the full car is exported or people literally chop off things like front bumpers for popular cars, remove special limited parts, etc.

There's probably some Japanese car website with actual numbers, but it can be unnerving when some of these are caught, and more so when I see new ones being reported.

one relevant news article: https://jalopnik.com/facebook-group-catches-american-shop-th...

Doesn't Japan also require you to junk your car after two years or pay an arm and a leg for a yearly pollution inspection? If that's true, that's probably a much bigger stream of profitably exportable cars than theft.

It's not that bad, every year you must take all cars through the Shaken ( 車検 ) process. It's exhaustive but they also help you resolve some issues at the Shaken workshop so it's not like they are antagonists unlike in some other country's roadworthiness processes. The rules aren't outrageous, and modified cars can make it through. It's certainly less strict than where I live in Australia.

There is also no requirement to junk your car, if you can't be bothered with getting a particular car through Shaken anymore, you can still sell it to someone who will.

Thank you! Is there some carveout that makes sha-ken less rigorous or expensive the first couple of years, or was I just totally wrong about that? How much does it cost later on?

Shaken costs about ~$300-$500 for most cars, if the car is well-maintained and you take the car through the inspection line yourself. I daily drive a 15-year old sports sedan and will never pay a shop to get this car inspected ever again. If you pay a mechanic to do the inspection, it could be $600-$800. If the car is poorly maintained, of course expect to get gouged on parts & labor.

If you drive a car with terrible resale value AND it has major deficiencies shortly before a new shaken inspection is due, it might be more cost-effective to junk the car rather than return it to passable condition.

I see, thanks! Though still much costlier than other countries, that's not nearly as extreme as I had inferred from other reports.

A new car only needs shaken after the first three years, which gives you a brief respite from cost and time it takes to go through the process, last I checked it was close to $500USD (which includes vehicle weight tax/insurance). In practice it also get's more expensive the longer a vehicle is on the road, because mechanic work is expensive in Japan and to continue meeting the requirements you'd end up spending money on maintenance.

I think those are the two key factors that encourage people to keep buying new vehicles, but I might be missing something!

It’s just like an MOT in the UK, or the periodic checks in most countries for that matter.

The car is exempt for the first few years, then gets checked yearly. Most cars pass with few, if any, repairs.

Thanks to ehnto providing the keyword, I found https://en.wikipedia.org/wiki/Motor-vehicle_inspection_(Japa.... It says:

... the system effectively represents an additional tax on used car ownership. Even owners of a perfectly maintained vehicle can expect to pay 100,000 yen (US $899) for a two-year inspection, and requirements are even stricter for vehicles over 10 years old leading to an extremely high effective tax rate. This is in contrast to vehicle tax regimes in other developed countries, where the tax or registration fee is based on the current market value of the vehicle, meaning older vehicles have a lower tax burden. ... A typical third-party shaken for a small or normal sized passenger vehicle costs between ¥100,000 (US$806) and ¥200,000 (US$1,612). [3] However, these prices often include large service fees so the cost of a self-performed "user" shaken is much lower, although exact prices are dependent on the size, weight and age of the vehicle.[4] ... Many Japanese used vehicles are exported once it is no longer cost-effective to keep them in service in Japan.

Wikipedia also has a page about the MOT in the UK. which I hadn't heard of; it says it costs £54.85 per year for cars and light vans. I don't think paying US$70 per year is "just like" paying US$600 per year.

Anyway, it confirms my inference that Japan exports a lot of used cars without them getting stolen first.

> I don't think paying US$70 per year is "just like" paying US$600 per year.

See the point #3 that you posted in your comment. Repairs/maintenance required to pass MOT (or equivalent inspection here) are in addition to the inspection fee.

Sure, agreed.

I wanted to listen to some of that "chutocumbia" but Youtube has nothing and searching for it only returns the article itself.

I imagine it as some Miami Bass hybrid with Pan Flute leads and rapped blues lyrics.

You might have better luck searching for “cumbia chutero”.

> I imagine it as some Miami Bass hybrid with Pan Flute leads and rapped blues lyrics.

It’s mostly cumbia with chutero-related lyrics, similar to Mexican narcocorridos.

Thanks for the recommendation! But all I'm getting is covers of Chutero yo soy by different bands?

I guess you’re right. “Chutero yo soy” seems to be kind of a chutero anthem, but digging a bit deeper in some of the YouTube channels I found a few more songs:

El chutero: https://www.youtube.com/watch?v=zSfzIS1J6Xs

El chutero (a different one): https://www.youtube.com/watch?v=OoIz7SM8rUI

Hombre de riesgo: https://www.youtube.com/watch?v=hIYmC_C5-aw

Thanks! Maybe I'm old-fashioned, but I find this stuff a lot more listenable than Wachiturros or even Damas Gratis.

I’m more interested in the picture - it appears to be a merchant with toy cars and … stacks of toy? counterfeit? Money?

They're used as gifts for abundance in our festival called Alasitas, you can read more about it in the wiki page: https://en.wikipedia.org/wiki/Alasitas

I'd always wondered about this but never thought to ask!

It's for the alasitas where toys and miniatures of everything you can think of are sold. Even tiny bricks and cement bags! I have fond memories of going to them when I was younger.

I named my open source project ekeko based on the alasitas. I'm bolivian

I wonder if they have JDM meetups in there

Be careful not to blow the weld on the intake manifold.

It's interesting to see the diversity/lack thereof in South American countries when it comes to availability of automobiles (Lots of classic Ford trucks functionally operational, a nice quirk of history). Perhaps population size and geography play a role, but does it really matter at all, trivial, even - at such high altitudes.

Are you assuming Bolivia = South America or do you have experience in other countries? I haven't been to Bolivia, but here in Chile (and other countries I've visited in South America) your statement isn't true.

I thought Bolivia drives on the right? It doesn't make sense to have right hand drive cars on the roads in a country that drives on the right?

There are some places where the wheel and driving side don't match what's usually expected.

Like Vladivostok, Russia, where cars drive right but due to its proximity to Japan some cars have the wheel on the right.

Or the U.S. Virgin Islands, which drives left, but most cars are U.S. imports and have the wheel on the left.

Or Myanmar, but things there are changing. Previously they drove on the left as in the UK. Then a fortune teller told the dictator to change to drive on the right, but the imported cars still had the steering wheels on the right. With the penultimate government, this was starting to change. There's a new government now, so who knows?

I've driven in a Bolivian chuto. The steering wheel and pedals are moved, but everything else stays where it was manufactured. It's odd to sit in the right sea as a passenger in front of a dashboard with no steering wheel.

Top Gear covered the dictatorial madness in Myanmar: https://youtu.be/9MDzTw7rHhE?list=PLWpVvJ8o7wzzTMdDpFCbxClHe...

Or USPS vehicles in mainland USA which have the steering column on the right!

Yeah but they're built like that by design to make it easy for post workers to stuff mailboxes, not a quirk of location and ease of importation like the other examples.

Most of the road cleaning vehicles in Europe have the driver on the right side of the car, but that is a clear exception.

Answered in the article

> Mechanics fix suspension wrecked by the drive over the mountains from Chile; others move steering wheels from right to left.

Moving a steering wheel seems like it would be more trouble than it’s worth, but I’ve not actually taken apart a Japanese car to see if the holes and mounting spots are all there.

pretty much every modern car was designed with both versions in mind. many cheaper cars have agnostic dashboards that don't take much to convert. and any globally distributed model is going to at least have a secondhand market where the parts for conversion are readily available. for some popular models where OEM dashes are hard to come by, there are full dashboard kits produced by third parties.

There are still some JDM models like minivan, K-car so I expect some cars are hard to modify.

You would still have to solve a lot of other issues, it's usually a huge process. You'd need to import a correct-side dashboard ensemble, a correct side drivers door card and electronics panel, sometimes move your master cylinders across, get a different sided steering rack.. etc. Wiring harness may not even match up for different sided cars. There's a lot of parts you would need, and I'm not sure what types of cars they're bringing in, but JDM parts are getting harder to find.

The chutos I've been in have had only the steering wheels and pedals moved, the rest of the dash stayed where it was originally manufactured.

It sounds like moving the controls is more about making it not obviously a chuto and less about drivability though the dash may be less needed than thought.

These are countries where parts are expensive and labor is dirt cheap. The economics (of everything) work out vastly differently. It’s hard to imagine how different life is in countries like that without either living there or using a time machine.

Since they're affordable and you can still use them as cars on the road, it makes "sense". Just the little issues like extra difficulty when overtaking.

The further east you go in Russia the more you see RHD Japanese second hand cars.

Bolivia is also a huge market for cars stolen in Brazil.

>Mechanics fix suspension wrecked by the drive over the mountains from Chile

How bad can the roads possibility be, that a one way drive "wrecks" the suspension?

https://www.youtube.com/watch?v=F6kYJhvey5Y

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