U.S. barriers to entry caught on CBP video

Two weeks ago, a perfectly good Land Rover Defender ended in the claws of U.S. Customs. It died in front of running cameras. (Video after the jump.) The car’s crime: It was 30 years younger than stated. And we can’t have that in America.

According to Automotive News, Land Rover imported about 7,000 Defenders to the U.S. from 1993 to 1997. When technical requirements became more restrictive in 1998, Land Rover stopped importation of the vehicle despite healthy demand.

Defenders from the 1990s are listed on eBay Motors for between $35,000 and $70,000. “The same basic vehicle can be bought in Europe for around $5,000 and shipped to the United States for another $2,000 or so,” says AN.

As the looks of the Defender have not changed in decades, importers slip late model Defenders through customs with a VIN tag transplanted from a Defender that is at least 25 years old.

“Someone is thinking they are buying a 1975 Defender, when really they are buying a 2005 Defender,” said Robert Hunt, Public Affairs Officer at the U.S. Customs and Border Protection in Baltimore. The law is so perverted that selling a car that is actually 30 years younger than stated becomes a serious crime that will result in the seizure and destruction of the vehicles.

Detroit carmakers like to complain about “closed markets” elsewhere, while the U.S. is one of the most closed auto markets in the world. America, and by association Canada, have a certification regimen that is completely different from the rest of the world. The expense for compliance is high. One reason to discontinue the sale of Volkswagen’s Phaeton in the U.S. was that the cost for federalization of the new model  exceeded $60 million, a Volkswagen executive said.

What sounds like a law that keeps strange foreign cars out of the country is in fact one of the most formidable barriers to entry for all automakers. In most parts of the world, market acceptance can be tested via low volume imports.  In the U.S., the high cost of federalization makes low volume imports extremely challenging.  In other parts of the world, the door to low volume, or even single unit imports is wide open.

  • Japan’s preferential Handling Procedure allows small series of up to 2,000 units per year into the country with the barest of paperwork. No vehicles need to be submitted for testing.
  • Europe has a similar exception for low volume imports, called ECSSTA (EC Small Series Type Approval). The ceiling is 1,000 vehicles per type and year.
  • The U.S. has no such low volume regulation.

According to the smirking customs officer, this is all about “keeping unsafe vehicles off the road,” and to “save lives.” Why a 1975 Defender is perfectly safe to drive on American roads, while a 2005 Defender is a menace to society, and must be removed and destroyed, that takes a little getting used to.