At first glance, the only thing Chilean about the sprawling duty-free car zone in Iquique, set between the Pacific ocean and the Bolivian border, is that it is in Chile. The thousands of used cars for sale are mostly from Japan, the dealers are mostly Pakistani, and the buyers kicking tyres are mostly from Bolivia, South America's poorest country.
This duty-free zone in the far north of Chile is one of two set up during the 17-year rule of ex-dictator Augusto Pinochet to bring jobs and development to Chile's furthest-flung cities. The other is in the extreme south.
These days, the booming car import industry testifies to the growing success of Chile's bid to become the gateway to South America for Asia-Pacific countries. In the past decade alone, the number of used-car dealerships in the zone has jumped 40-fold. As many as 150,000 cars go through the port annually these days.
"We have shipments of cars coming in every day, and sometimes you have 40,000 cars in the lot at one time," said Claudia Grimaldi Rodriguez, a spokeswoman for the Iquique Duty Free Zone Car Association. When the imports first began, some 40 or 50 cars came in per month, she said.
Iquique has taken on the aspect of an international trade hub, attracting job seekers and entrepreneurs from within Chile, from Peru and Bolivia and from as far away as Pakistan.
The area has even drawn the attention of US authorities who, according to a US State Department report last year, have looked at the potential threat from extremist fundraising in the free trade zone. Inside the lots, buyers from Bolivia, Paraguay, Peru and Brazil haggle to buy cars at a fraction of retail prices. Most of the cars are Japanese Nissans, Toyotas and Mitsubishis.
"Bolivians are the shrewdest negotiators," said Amil Rajput, a Pakistani-American businessman who imports some 250 used cars a month from Japan, and who arrived in Iquique in 1997 to run the family business.
"When it comes time to pay, the women ask to use the restroom, where they take the money from underneath their skirts," he told Reuters in crisp, American-accented English.
The buyers usually arrive on buses that come in three times a day from Bolivia. The brisk trade has even spawned a secondary industry of street vendors who sell the Bolivians the cassava dough and cheese snacks that are typical of eastern Bolivia.
On the Bolivian side of the border, the vehicles end up as taxis or minibuses, and but also as luxury four-wheel drives for Bolivia's small middle class. In Santa Cruz, 500 miles (800 km) west of Iquique, dealers say the assortment of Japanese cars in warehouses on the border is so large they can cater to any customer's needs.
"You just tell me the model you want, the color, and you leave me a 50 percent deposit and within a week I'll bring you whatever car you want ... with all the paperwork done and everything legal," said Iber Luis Subirales, a car dealer in Santa Cruz. There and in other Bolivian cities, the cars are recognisable by the Japanese stickers still adorning windshields.
They are often called "transformer" cars because they have been transformed from Japanese right-hand drives to Bolivian left-hand drives, although in many cases the job has only been half done, with the steering wheel on the left and the control panel still on the right.
"Eighty percent of the cars in Santa Cruz are transformers," said Juan Carlos Suarez, a taxi driver in the city. Suarez has placed a teddy bear in the hole in the console where his steering wheel used to be.
The cost of "transformation" is on top of car prices of some $2,500 to $3,000 each. Four-wheel drives cost $6,500 on average, a fraction of regular retail prices, said Iquique dealer Rajput.
Rajput, who drives a BMW, is part of the large community of Pakistanis who migrated to Iquique in the 1990s and who these days own 95 percent of the zone's 120 car lots.
Dealers say most of their customers are Bolivian, adding that they are always polite, have all of their paperwork in order, and often buy several vehicles at a time. "Where do they get the money? That's the question I've been asking myself for the last 10 years," Rajput said.
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