By NEIL HARTNELL
Tribune Business Editor
The Bahamas Motor Dealers Association’s (BMDA) president yesterday said his Auto Mall business will imminently withdraw from the used car market, as it “cannot compete” with unlicensed roadside vendors operating throughout Nassau.
Fred Albury told Tribune Business that the explosive growth in the ‘informal economy’ for used vehicles was having a “tremendous” effect on both his business and the Government’s revenues.
Estimating that used Japanese vehicle imports had doubled within the past years, the BMDA chief said roadside vendors were able to undercut him with ease because they paid no taxes or fees to the Government.
Pointing out that these individuals did not have to cover the overhead costs faced by established dealerships, Mr Albury said the “uncontrolled” and unregulated surge in used car imports had created an ‘unlevel playing field’ that threatened to undermine legitimate Bahamian businesses.
Revealing that he and the Auto Mall were “hanging in there during these rough times”, he told Tribune Business: “There’s been no improvement; there’s been more deterioration in the marketplace.
“The stagnant economy is one issue. The other issue is the uncontrolled allowance of these cheap, used car imports that are brought in by individuals and being sold all along the side of the road. It’s impacting our business tremendously.”
Mr Albury said such vehicles were “all over” New Providence, and visible on all major thoroughfares and roundabouts, including the likes of Eastern Road, Prince Charles Drive and Westridge.
“Used car imports from Japan have increased from 3,000-4,000 to 7,000-8,000 units. That’s taken place over the last 12 months,” the BMDA chief told Tribune Business.
“The end of the month is when the boats arrive from Japan. You go down to the dock, Customs at Arawak Cay, with your camera and snap pictures. You have lines and lines of individuals trying to pay import taxes on several hundred cars.”
Given the considerably lower value of used car imports, compared to their new auto counterparts, Mr Albury suggested market trends meant the Government was “getting peanuts” in revenues from vehicle imports.
“We know this is impacting revenue considerably,” he added. “These people are not paying Business Licences, they are not paying National Insurance contributions, and are not paying VAT on the sale; only when they collect the vehicle at the border.
“It’s got so bad that we’re [Auto Mall] going to pull out of the used car business. I cannot compete with guys on the side of the road. They’re not paying their fair share of taxes, but I’m being taxed to the max.”
Mr Albury said he only had one to two used car shipments left to come in. After these arrive, Auto Mall will only deal with used vehicles as ‘trade ins’ in part exchange for new vehicles.
The BMDA president also called on the Government to crack down on “the corruption going on” with the importation of Japanese vehicles, which he said was endangering the welfare and safety of Bahamian consumers.
He alleged that odometers, which give the total distance a vehicle has travelled during its lifetime, were being tampered with and ‘wound back’ in a bid to increase their valuations.
As a result, Mr Albury urged the Government to follow through with an initiative it raised in a meeting with the BMDA several weeks ago, which involved pre-certifying vehicles before they arrive in the Bahamas.
He said his own research showed that the Japanese Automobile Association would conduct such certification for a $200 per vehicle fee, as would some private companies, once the Bahamas set the standard that vehicle imports have to meet.
This, Mr Albury said, would improve consumer protection by ensuring the safety and reliability of used vehicle purchases, while also checking for pollution levels.
“Once you get a clean bill of health, you can import the vehicle,” he explained. “Currently, you can get a piece of junk on the road for a year-and-a-half, and it then ends up in the city dump. We’ve become an environmental dump for used cars out of Japan.”
Arguing that the solution was “not rocket science”, Mr Albury said the key was whether “anybody has the balls down there [in the Government] to implement something to protect the country”.
He added that African countries, such as Kenya, were implementing their own certification programmes “to protect their revenue and the environment, and filter out the junk”.