The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Motor Dealers Association’s (BMDA) president has admitted to being “a little bit surprised” over January’s business volumes, having expected that Value-Added Tax’s (VAT) introduction would spark a sharp decline.

Fred Albury, who heads the Auto Mall, Executive Motors and Omega Motors dealerships, told Tribune Business that buyer interest seems “strong and we have been moving units”.

But, while January year-over-year was “on par” with the same month in 2014, Mr Albury agreed with other new auto dealers that it was too early to determine VAT’s impact on consumer demand and spending patterns.

Still, the BMDA chief’s comments provide further evidence that VAT implementation - and its effects - may not have been as bad as many in the private sector were fearing.

“January is traditionally a slow month, but surprisingly it has not got as slow as we anticipated it getting,” Mr Albury told Tribune Business. “

“There’s still a lot of buying interest and people shopping, and for our group of companies the interest seems strong and we have been moving units.

“The issue is flushing out the old inventory that came in with older, higher landed costs, and get on to inventory that came in at lower cost,” the BMDA president added.

“We sold out of BMWs at the end of December, and had a shipment that we took off the dock on Saturday. At least three of them we’ve already sold.”

Mr Albury expressed hope that “the momentum continues” and is not slowed by concerns over tax and wider fiscal reforms, plus the general economic environment.

“For January, and VAT on top of that, I was a little bit surprised,” the Auto Mall chief told Tribune Business of the company’s performance to-date.

“I don’t have the numbers in front of me, but knowing what the activity has been, it’s pretty much on par with last year. The floor traffic has remained strong.. They are out there looking at what’s available. You have to make deals here and there to move old inventory, but it’s there.”

Many auto dealers had expected a major fall-off in new and used car sales, and consumer traffic, as a result of the 7.5 per cent VAT’s implementation.

The tax has added a four-figure sum to the price of many vehicles and, together with a tepid economy and difficulties in accessing bank financing, numerous dealers had predicted VAT’s combination with these negative factors would a further set back for the industry.

And not all share Mr Albury’s view. Rick Lowe, Nassau Motor Company’s (NMC) director/operations manager, told Tribune Business that auto sales were “as slow as molasses”.

“We’ll see what the rest of the week and month brings,” he told Tribune Business. “There are a lot of worried folks out there. Hopefully this sense of dread will disappear soon.

“It’s not very good at all. Floor traffic is down; it’s less than last January by far. December was up dramatically compared to the whole year.

“We’re bracing for a pretty rough month.”

Mr Lowe and Mr Albury, though, both agreed that it was impossible to judge VAT’s long-lasting impact on consumers and auto sales solely on January’s performance.

Mr Albury said BMDA members would have a better grasp of post-VAT trends come March/April, particularly after the Car Show.

And Mr Lowe added: “My concern is not so much January. You can’t judge it on one month. We need to get a couple of months under our belt. It’s by the time we get to the end of March that we’ll see where we’re at.”

Both the Auto Mall and Nassau Motor Company (NMC) said their service departments continued to be strong performers.

“Our service area has been busy, as we have been pretty much booked up a week or two in advance,” Mr Albury added.