The automotive sector and its supporting industries continue to become increasingly complex and challenging from a customs a trade perspective. At a basic level, the depth of complexity across all stages of the automotive sector supply chain from supplier to auto retailer, from the volume of trade flows across international borders to the range of raw materials and components involved, presents huge cash saving opportunities through customs planning while complying with the multitude of trade regulatory requirements.
From an industry perspective, competitive pressures continue to demand the use of more complex trade preference programmes. Rapidly changing legislative requirements also make it difficult to understand a company’s position on trade compliance. Importers and exporters are facing increasing scrutiny from customs authorities, underpinned by protective concerns and more aggressive enforcement of export controls.
In terms of compliance, lack of visibility of import and export activity on a global basis can negatively impact the ability to achieve compliance and effectively manage trade activity. Managing the customs function across multiple jurisdictions with no standard rules and policies, together with the absence of bi-lateral dispute resolution mechanisms, is difficult to say the least. The costs of getting it wrong both in terms of market reputation, business disruption and potential penalties (often multiples of the value of goods to potential criminal offences in developing countries) are simply not affordable in the current economic environment.
To address these business challenges, WMS offers a strong and reliable network of dedicated industry experts that deeply understands the industry's fundamental issues and brings the experience to provide customs and trade solutions that work in practice. With its regional industry experience as well as links to the PwC global network, WMS offers the highest level of expertise to add value to your operations.
WMS’ customs and international trade services include matters faced by multinational automotive companies across the region such as:
WMS assisted in the implementation of a new business model in which the client took on added responsibilities to be the sole distributor of the vehicle brand on the Singapore market. Through the use of existing customs legislation the client was able to successfully implement a Distribution Rights Agreement that resulted in significant cost savings through the unbundling of non-dutiable cost components from the import price of the vehicles.
Our assistance included the following work:
Benefit for the client
The client was able to successfully implement the new business model with Customs buy-in upfront that resulted in significant cost savings and a more competitive position in the Singapore automotive market.
WMS conducted an analysis of the License and Technical Assistance Agreement to assess the dutiability of the royalty fees from a Thai customs valuation perspective and provided strategies to mitigate risks resulting from historic as well as future shipments.
The analysis included:
Benefit for the client
Significant reduction of duty and tax assessment from approximately 80 million THB (2,667,000 USD) to 14 Million THB (467,000 USD).