Chocolate Industry

Mexico grants stay on illegally imported ‘chocolate’ cars | Business

Mexico has long had a problem with illegally imported cars, and President Andrés Manuel López Obrador on Wednesday pledged to legalize all of them.

The cars, mostly from the United States, are known in Mexico as “chocolate,” a play on the word chueco, or “twisted.”

Mexicans can legally import cars, but only newer models that meet pollution and safety standards. They also have to pay import duties, which leads a lot to just bringing in American junkers on the sly.

López Obrador said many poor families need cars to get to work, but automakers and dealers say the measure will fill Mexico with unwanted cars precisely at a time when the auto market is suffering.

“We are going to legalize them all, we are going to give them a permit, we are going to recognize them as owners of the vehicle,” said López Obrador. “Because there are a lot of people who use these cars because they don’t have the money to buy a new car, and with these cars they take their kids to school and do their activities.”

He said the owners should pay a fee; the program is expected to start soon in the northern border states, where cars are more common, and later expand to other states.

The Mexican Employers’ Federation, a business group, said the measure would fill Mexico with dangerous and dirty cars, and noted that it came at a bad time for the domestic auto industry. New car sales in the first five months of 2021 were 19.8% lower than in the same period of 2019.

“This involves legalizing smuggling and fomenting unfair competition with an industry that is strategic for Mexico and severely affected by the pandemic,” the group said.

Because they are largely unregistered, it is difficult to say how many “chocolate” cars were imported into Mexico; some estimates place the number as high as 18 million cars and vans, or about a quarter of all such vehicles in Mexico.