The Tribune

• Some vehicle showrooms ‘just about empty’

• BMDA chief: 5% ‘across-the-board’ price rise

• Adds: ‘Never thought I’d see it come to this’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas-based diplomatic missions are among those hit by a vehicle backlog where local dealers receive as little as 25 percent of their orders as the global supply chain crisis worsens.

Fred Albury, the Bahamas Motor Dealers Association’s president, yesterday told Tribune Business he “never thought I’d see it come to this” where “special orders” were now unlikely to arrive in this nation before March/April 2022.

With his showroom “just about empty” of Hyundai-brand product, he warned that the vehicle shortage will be felt beyond purchasers and the immediate auto industry, saying bluntly: “No product, no tax” for the Government.

And Mr Albury warned consumers they should “not be surprised to see price increases across the board” next year with vehicles, parts and service likely to jump about 5 percent as the Bahamian auto industry grapples with rising freight costs, container shortages and increased haulage expenses in the US that are affecting all aspects of this economy.

The global economy’s supply chain woes, sparked by factory backlogs and shipping delays related to the COVID-19 pandemic, have also served to exacerbate vehicle manufacturer woes that can be traced back to the fire that destroyed the factory producing semi-conductor chips for many models.

“It has gotten worse,” Mr Albury told this newspaper. “While we’ve been ordering product, it’s not been built and my showroom, especially on the Quality side, Hyundai and Suzuki, is just about empty. I’ve got a bit of Toyota product left. 

“It’s tight globally. If I order 30 vehicles, I’m lucky to get ten to 12. It’s the production of the vehicles and the shipping as well. It’s a double whammy.” Rick Lowe, the BMDA’s secretary, backed Mr Albury in describing the situation as “serious”.

“They keep saying it’s recovering, but you put in an order and it gets delayed,” he added. “Nobody is giving any real specifics. We’ve just had several shipments arrive together, which creates a backlog for us. We received a shipment of vehicles last months, and expect a shipment this month, but it’s limited numbers. 

“They’re less than one-half, maybe one-quarter of what normal orders are. In some cases you cannot get inventory. We continue to bump along with the supply chain as it limps along. It is what it is. So far we’re holding our own, but the longer this goes on the worse it seems to get.”

Mr Lowe added that besides the supply chain woes confronting dealers, auto buyers are also finding it more difficult to obtain credit to finance purchases. “There are delays with credit, financing,” he said. “Banks are being extra cautious, which is also understandable.

“People are taking a couple of months to get approval. What would previously have taken three to five weeks, in some instances we’re seeing it take two months to ten weeks. I think the banks are doing more due diligence because of the situation with so much unemployment and all that.”

Mr Albury, meanwhile, told Tribune Business: “It’s going to be a rough ride I estimate from now to February next year. I would normally go to the US and try and source stuff from there, but they are having the same issues we have, and used vehicles in the US have gone up about 25 percent.

“With the supply situation it is going to be difficult to get new product right now. I’ve got some vehicles on special order for one of the embassies here, and we’re looking at somewhere in March/April next year for delivery before we get those vehicles. Those who have inventory will be King of the Hill for the time being.”

Mr Albury did not identify the embassy or diplomatic mission involved, but added: “Locally, this is going to impact government revenues and stuff like that. It’s not just us but also the Government with the import taxes. No product, no taxes.

“I’ve had some requests from the Government for vehicles, and cannot supply them because I cannot get them from the brands. I never thought I’d see the day it came to this out there. It’s like from one disaster to the next. When you get one thing cleared up, there’s something right behind it to deal with. It’s like the Boy Scouts’ motto, ‘Be prepared’.”

The BMDA chief predicted that there was “unlikely” to be any significant year-over-year increase in new vehicle sales for 2021, although Tribune Business understands that raw data suggests there has been a rise of around 300 units compared to 2020 numbers for the nine months to end-September. However, this remains well below sales achieved in 2019.

“Based on what is happening, I don’t expect to see deals of any sorts, discounts, because dealers need every $1 of profit to keep their doors open,” Mr Albury said. “Don’t be surprised to see price increases across the board.

“When we look at the cost of energy, raw materials, labour; all those things being factored into the picture spell price increases on product. I’m going to ball park the increase at 5 percent. To give you an example, when we bring in a container of tyres from either China or Taiwan, we were previously paying $6,000 for a 40-foot container. The last one came in at $12,000.

“It’s getting higher and higher, and I’m hearing that in the US it’s like $25,000-$30,000. Be it food or whatever, there’s product shortages across the board. People are going to have difficulty putting food on the table, and I think this will last well into the middle of 2022.”