Importing a Car to Cambodia from Abroad: Is it Worth it?May 22, 2013
Let’s say you’ve been looking around for a vehicle at locally and are getting nowhere. Maybe you have an old girl sitting at home under a tarp that you miss terribly. Maybe on that jaunt home last time you fell in love with that shiny, fast beast parked on theneighbours nature strip.
Whatever the reason, sooner or later most long term expats will consider importing a vehicle from overseas. Is this a good idea?
Some background points:
Generally speaking, Cambodians are real petrol heads. It’s something that I really like about this place.
If you are stuck for conversation in Kampong-wherever with the family, a great way to strike up a conversation is to ask them about their current vehicle, the vehicle they plan to own in the future and why they desire said vehicle. Cars are the first major luxury purchase Khmers who are climbing the economic ladder will make.
How does this national obsession impact your potential import? Well, I have it on good authority that the Royal Government of Cambodia, “wants you to enjoy your life”. According to the government, enjoyment of life is enhanced by lax regulation of alcohol, tobacco and vehicles.
This means that when you import that Chevelle SS 454, there are no emissions rules, no luxury car tax, no oppressive industry protectionism or local compliance rules to contend with. Nice one Iron Man!
However, these positives are potentially undone by the import tax system, which is quite illogical. For example, there is punishing taxation on new city cars, but a brand new 2979CC 740Li (costing $90K in the US) is taxed at a rate lower than a new Toyota Hilux Vigoworkhorse. Why is this?
The Import Tax System:
On the face of it,the import tax system for vehicles in Cambodia is quite simple. The customs boys have been issued with a matrix from the Ministry of Economy and Finance which plots a vehicle’s year of manufacture against its displacement, measured in cubic centimetres. A customs value is derived at the intersection of these two points.
This value must then be multiplied by the prescriptions in the Customs Tariffs of Cambodia bible. This is a percentage figure, comprised of customs duty (CD) + special tax (ST) + VAT.
Case study A: A 2001 NB Mazda MX-5/Miata:
These legendary front engine, rear wheel drive cars continued the tradition of the British roadster and even threw in a neo-samurai concept: Jinbaittai, roughly translating as the horse and rider being one.
They are reliable, fun, have a small footprint and there is soon to be a Mazda dealership locally.
These days they can be found for sub-$7k in the US. Let’s call it $7,000 for simplicity.
Customs value (2001, 1839CC) $4,250 x Customs Tariff Schedule (CD+ST+VAT) 115.325% = $4,900
+ Purchase price ($7,000) + Logistics ($1,300) =$13,200 Total.
The MX-5 is punished because the extra 39 CC above the 1800 CC threshold pushes it into a higher tax bracket. If it happened to be say, 1789 CC, you would save $875.
Case study B: A 2002XV30 Toyota Camry:
The Camry is arguably Cambodia’s favourite car. They are solidly built, reliable, fuel efficient and deadly boring.
Good examples of the 2.4 litreversion can be had for about $6,500 in the US.
Customs value (2002, 2362CC) $5,800 x Customs Tariff Schedule (CD+ST+VAT) 115.325% = $6,687
+ Purchase price ($6,500) + Logistics ($1,300) = $14,487 Total.
Case study C: A 2003 Mercedes-Benz W215 CL 600:
Big. Beautiful. Earth shatteringly quick. Hey, there’s no luxury vehicle or emissions taxes and an authorized Mercedes-Benz dealer locally, so why not? Here’s why.
These can be found for about $17,000 in the US.
Customs value (2003, 5513 CC) $23,000 x Customs Tariff Schedule (CD+ST+VAT) 115.325% = $26,519
+ Purchase price($17,000) + Logistics ($1,300)
Simply put, any vehicle with a displacement in excess of 5000 CC can quickly become prohibitively
expensive to import (unless you are from Australia where $45k for a CL 600 is a relative bargain).
Should you do it?
Clearly, the system is heavily weighted against large capacity vehicles (of any age) in favour of smallish to mid-sized engines. Boo.
Keep in mind too, that there is a massive jump in road taxes between 6-cylinder enginesand V8s; in 2012, a C280 set you back 380,000 riel versus an S500 which was about 2,000,000 riel.
Therefore, if you’re cynical, the real message from the Bong Thomsseems to be, “the Cambodian government wants you to enjoy your life…but don’t outshine us”.
In real terms, you need to consider:
1) Do you love your car/s?
2) Servicing realities – in particular, is there a local authorized dealer for your chosen make and/or is the particular model ubiquitous in Cambodia?
3) Do you plan to resell the vehicle?
It is head versus heart stuff. It is very plausible that you would find a mint condition Camry in the States, with a full service history and a little old lady single owner. It is probably cheaper to buy it and land it too, rather than purchasing from a local dealer. This sort of car would undoubtedly save you money in the long run, because the little brown guys haven’t treated it like a 8th-grade science experiment. Satisfies the resale question too.
But if you are a car lover like me and have commitments that ensure you are here for the long term, your love of cars needn’t be forgotten. I don’t even think there is any shame in answering yes, no, no respectively to the three questions above. Everyone needs a hobby. And hey, if you’re not married and don’t have a company you can’t buy land anyway. How else are you going to spend your hard earned dough?