By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
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”.
Comments
Well_mudda_take_sic 7 years, 9 months ago
Used autos from Japan are better than new Japanese autos assembled in Mexico with a Mexico vehicle identification number (VIN). Who the hell wants to pay $37,000 plus before VAT for a Mexican assembled new Honda auto? On our terrible roads a new auto is shaken to pieces within 6 months and is not worth more than a five or six year old auto that has been driven on Japan's smooth highways and roads. As for American made autos, our horrible roads chew 'em up and spit 'em out in no time at all! Auto insurance is also a big rip off when it comes to new autos purchased locally. The fact that middle class families can no longer afford to buy new autos from local dealers says a lot about where are country is headed as a result of the failed policies of the corrupt Christie-led PLP government. The way of life and standard of living for honest hard working Bahamians is crumbling with each and every passing day!
ohdrap4 7 years, 9 months ago
lets setup crowdfunding to help our motor dealers pay bills.
TalRussell 7 years, 9 months ago
Comrades why not begin with New & Used Car Dealers not being such cheapskates on what they give to vehicle buyers when trading-in their existing vehicles. Fact is there are New Car Dealers have long been selling off their trade-in vehicles to roadside unlicensed vehicle sellers for years and years. The few used cars they sell are 99% imported for resale.
banker 7 years, 9 months ago
Most dealers make very little money on trade-ins. They are forced to take the car on trade-in in order to sell a new one. Most trade-ins presented to dealerships are worth a lot less than the owners think they are.
Automobile dealers used to have it good many years ago. Now, not so good.
boopboop 7 years, 9 months ago
The simple answer is this and it applies to ALL Bahamian businesses "if" you are doing it, STOP GOUGING the people and we will buy from you!!! You kill people with your prices and then when you're stuck with your over priced product you cry!! Whose to say you're not turning the dials back? What about selling someone a car that car dealers state the car is a certain year model but when you go to get it insured you find out its actually older and cannot be put in comprehensive insurance? Why go to you and pay four times the amount when I can order my car myself for less from the same people you go to?
While we're at it, many Bahamian businesses are doing the same thing Gouging!! Want stewed fish? Stop to a side street (Wulff Rd) food take away and spend the same thing you would sitting down at Arawak cay! Go to some other restaurants owned by Bahamians and the servings are stingy! Go to a Chinese take out the food is reasonably priced and you can save some for later.
Was traveling and decided to go to Mall at Marathon to a certain shop to replace a pair of Jeans. Asked the price, a whopping $85.00!!! I politely took it off and waited until I got to Florida where I got the same pair of jeans for $19.00 plus tax...almost 4 times less!! Why so expensive?
Hotels want you to stay home and enjoy vacation.. It cost more to go to a family island for a vacation than it is to go to Florida?
Mattresses is another thing. You claim you make it here and want consumers to buy Bahamian but your mattresses are outrageously priced.
"the BMDA chief said roadside vendors were able to undercut him with ease because they paid no taxes or fees to the Government." Don't know how much you car dealers may be getting away with it, but Many businesses are and still charge 100% plus on the item. If you dodging customs why are you still charging the people 3 and 4 times more? You're getting your cake and eating it x 3.
So rather than resorting to sticking it or passing the increases on to the consumer how many of you business people are putting pressure on the government? That's what you ought to be doing? Outside of that I seriously believe yall really enjoy staring at your merchandise while they dry rot........and still after sitting in your shop for a long time you wouldn't come down off the price. When yall serious we'll see it in your prices
bogart 7 years, 9 months ago
Need to also talk to the banks whose headoffices are in foreign countries.
They look at the economies of the countries they operate in. So they decide to start a car loans campaign and give loans at various periods and skim the disposable income parents may have at summer time when the money goes to Florida vacation.
These interest rates are high for maximum profits. Salary deductions are a must to ensure repayment especially for govt workers who often use their entire salaries for repayment. On the other hand this profusion of cars wreck roads and taxes are increased to pay for potholes and of course banks now get to lend the govt money to build new roads. Its win, win,win for banks especially when the profits leave our shores and are now taxed upon entering the foreign head offices of these banks.
Sadly govt plans to install a proper municipal transit system goes nowhere and a few years later these vehicles are garbage. Sad also is that we are keeping the foreign auto workers employed, foreign banks employed. It is easier to get a car loan than i is to get a business loan. Sad but true. When will our politicians wake up and stop taking the blame for the banks.
ohdrap4 7 years, 9 months ago
cook your own food, it is healthier, cheaper and you shorten the dreaded value-added tax chain.
you expect it to be more expensive, merchants have overhead and tax costs. i wish i could tell you to sew your own clothes, but the cost of materials would make it even more expensive. people are not stupid, they do not even bother to 'go away' anymore, they buy from amazon and use couriers, you land these same jeans for 35 dollars and that is cheaper than the extra luggage fee. Remember the avon ladies? there is no avon because it is cheaper to order from amazon, so they closed. merchants who refuse to change their business model will close in the present environment.
agin, to be expected, the hotels in the bahamas pay alot more in electricity and their costs are way higher then florida for food.
OMG 7 years, 9 months ago
In fairness the argument that the Auto Mall puts forward is correct and also applies to the hotel ,private house rental business. Whilst local hotels pay all sorts of government fees, health inspections etc ,the foreign home owner pay none of these taxes and remits much of the income back to the USA. I am aware on my island of houses being rented for $10,000 a week, employing a foreign handyman (yes I have seen his work permit) and paying no taxes. Constant gripe of visitors is "how do you afford to live here", "prices are so high". Lets face it there are so many more ways that the government could improve their revenue stream, from taxing these private rental properties to charging a nominal hook tax on visiting boats in Exuma for example. If the Bahamas is downgraded ,then VAT will go up, externalization controls on cash will be imposed and poverty will get even worse. And lastly of encourage us to spend at home not by empty words but by deeds. Bet Fred doesn't buy his stuff here when he can take advantage of all his frequent trips abroad.
Reality_Check 7 years, 9 months ago
Why should we spend more at home when the muck-a-mucks like the former Chief Justice of our Supreme Court (who is now sucking a generous pension out of our Public Treasury) gets to fly to Miami and rent a large van to hold all of the many bags of goodies his family purchased abroad for much less than they would have paid here in the Bahamas?! We have rights too, not just the muck-a-mucks like Barnett who are living off of the onerous taxes and fees imposed on all honest hardworking Bahamian taxpayers who struggle daily to make ends meet.
OMG 7 years, 9 months ago
You forgot so many who retired were rehired on a salary whilst receiving state pension, career pension and gratuity. Start with Baltron Bethel. I try and support local businesses but its getting harder and harder because rarely do they pass on any duty reductions or wholesale price reductions.
realfreethinker 7 years, 9 months ago
It's called a computer stupid. half of the imported Japanese cars are bought online by their owner. You don't need no middle man to buy anything anymore i bought a couple of them on line personally
OMG 5 years, 9 months ago
I agree with the fact that there is not a level playing field for car dealers and hotels when they have to pay all sorts of taxes as opposed to foreign home owners and amateur car sellers, however where I disagree is the comment that these imports are disposable junk. The quality of imports is generally excellent and my little Japanese car has run without any problems for over 6 years. Once bought a new (1 year old on the Friendly Ford Lot) truck and the cost was $18950.The same truck brand new in the states was $8500. Its the lousy grab all you can in one go attitude of governments that kills the free market. And lets face it if anybody buys a new car on the family islands and it goes wrong under guarantee ,it is the purchaser to has to cover costs associated with getting it to Nassau. In short I can buy 6 excellent imported cars for the price of an average new American car.
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