Mitsubishi Motor Sales of the Caribbean (MMSC) has been granted Foreign Trade Zone (FTZ) Status by the U.S. Foreign Trade Zone Board of the U.S. Department of Commerce. The local distributor for Mitsubishi and Hyundai vehicles is the first automotive distributor in the Caribbean to operate in a Foreign Trade Zone environment.
Foreign Trade Zones are treatedfor purposes of customs laws and entry proceduresas outside the customs territory of the United States. This means that under the status, foreign and domestic merchandise will be allowed on the island and into Mitsubishis facilities for storage, exhibition, assembly and processing, without undergoing formal U.S. Customs entry procedures.
Because of their status outside the customs territory of a jurisdiction, foreign trade zone are vital to the development of transshipment operations.
"Achieving FTZ status took three years and will help expand MMSCs business opportunities in international markets outside Puerto Rico, while positively contributing to the local economy," said Douglas Zuvich, MMSC vice president of Finance & Accounting for Mitsubishi Motor Sales of Caribbean Inc. "It will also allows us to save time and money when handling vehicles whose its ultimate market is not Puerto Rico."
Zuvich added that the FTZ also has many benefits for Puerto Rico. Between the FTZ and the creation of the future transshipment port, Puerto Ricos competitiveness enhanced by encouraging MMSC to maintain and expand its operations in the island, creating new jobs.
"The FTZ creates new direct and indirect jobs, thus contributing to the economic growth of Puerto Rico. In sum, as the largest importer into Puerto Rico, MMSCs use of FTZ procedures should help propel Puerto Rico to be a major transshipment port," said Charlie Colon, senior manager export department for Mitsubishi Motor Sales of Caribbean Inc.
In terms of export opportunities, the FTZ status allows MMSC to inventory, on the island, Non-US Department of Transportation (DOT)-approved vehicles for subsequent exportation. Currently, non-approved vehicles, such as right hand drive vehicles, are not permitted entry into any US territory.
"We can have vehicles and parts available, thus shortening our delivery time since Puerto Rico is strategically positioned to service all Latin America," said Steven McClintock, senior director, sales and marketing for Mitsubishi Motor Sales of Caribbean Inc. "We can also bring cars into our facilities that dont meet US requirements and equip them accordingly to the market they are destined. None of this was possible before achieving FTZ status."
At the moment 15% of all business activities at MMSC are exports, which equates to about 3,500 new vehicles, but McClintock hinted that now the growth potential is unlimitedthanks to FTZ status. "We are now a global player in the automotive industry," added McClintock.
Operational benefits to MMSC under the FTZ are:
- Seamless supply chain
- Improved lead times
- Improved mix of parts and vehicle inventories
- Reduced import and export processing burdens and cost
- Enhanced security and inventory controls
- Strategic positioning in the international market