Automotive

Background

Our automotive clients include vehicle manufacturers, component suppliers and distributors. The automotive sector is characterised by continuous innovation in an effort to achieve brand identity and value and thereby drive sales and profits. Global overcapacity, pricing transparency and labour management are just a few of the issues facing this sector.

Customs and international trade issues

Many automotive companies exploit opportunities to reduce duty obligations through the utilisation of export credits, local content schemes, drawback, bonded warehousing and other customs planning techniques and programmes.

Complete Knock Down (CKD) assembly programmes are frequently operated, usually in close co-operation with an indigenous assembler/importer.

Royalties, retroactive and prospective price increases are constantly under scrutiny by the customs authorities, with frequent challenges to the transfer price.

Many automotive companies use ASEAN Industrial Cooperation (AICO) schemes, which are an ASEAN initiative designed to facilitate free trade in the Region. AICO arrangements provide beneficiaries with substantial cost advantages (because of lower tariffs and taxes) over importers of assembled vehicles from within, or outside the region without any trade preferences. However, in our experience, many automotive manufacturers struggle to fully utilise this relief which is dependent on bilateral agreements between participating countries.

Solutions to help you succeed

We can review the accuracy of existing custom reporting systems to provide assurance that automotive clients are making accurate returns and/or declarations, and are meeting their obligations under preferential origin schemes;

We can assist automotive clients to develop comprehensive company-wide global customs compliance and systems reporting and filing processes that ensure that duty values are consistent with local rules;

We can assist automotive clients with customs inquiries, reviews, audits, etc., in connection with duty and related tax payments; and

We can provide assistance to automotive clients on how to structure price adjustments for defective goods and warranties.