By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Government was yesterday urged to crack down on “out of control” roadside auto vendors, a leading dealer estimating they now accounted for 40 per cent of the total market.
Fred Albury, the Bahamas Motor Dealers Association’s (BMDA) president, told Tribune Business he had already submitted recommendations to the newly-elected Minnis administration on how it could create “a level playing field” for all auto market participants.
He added that the suggestions would also benefit the Government, which was losing “considerable” revenue from the proliferation of roadside auto vendors who did not pay the likes of Business License fees, real property taxes, VAT on sales and National Insurance Board (NIB) contributions.
Mr Albury said the recommendations included his previous call for a vehicle import licensing system which, while allowing Bahamian consumers to import used cars, would identify those bringing in multiple vehicles and likely using the trade as a business.
He also called on Customs to certify wrecked vehicles at the point of importation, so that Bahamian consumers, insurance companies and banks were properly protected and new what they were purchasing.
“The biggest pressing issue is this uncontrolled proliferation of unauthorised, unlicensed brokers importing used cars into this market,” Mr Albury blasted to Tribune Business. “It has depressed the market considerably because it is heavily saturated, and the Government is making little to no revenue from it.
“If you go down to West Bay Street by Perpall Tract, - I call it ‘West Bay Auto’ - I counted 10 vehicles before I got to Ferguson Road. They’re at Montagu, all the roundabouts and anywhere there is a vacant space. They pay no Business License, no NIB, no VAT and no property tax. It has gotten out of control.
“If you check with United Shipping, which is the agent for cars coming in from Japan, R. H. Curry and Inchcape, a boat came in the other day with 500 used cars. Another boat had come in the previous week with 300 cars, of which only 50 were new. I’d like to see something done.”
Describing the issue as “priority number one” for himself and the BMDA, Mr Albury said the revenue loss to the Government from the proliferation of roadside auto vendors was “well into the millions of dollars”.
“New car sales are down to 1,600 units a year, compared to 4,500 units in 2008,” the BMDA president told Tribune Business. “If we’re able to get that number back up to 3,000 units, do something about the age limits of used cars and somebody and enhance the regulations, whatever the Government is getting from used car sales now they could double.
“I’m paying between $500,000 to $800,000 a month in duties. If they could double that from me alone in duties, and whatever they get from used cars, they’d be well on their way to enhancing revenue.”
Mr Albury estimated that used cars now accounted for 80 per cent of all autos sold in the Bahamas, with unlicensed roadside vendors enjoying a 50 per cent share of this - giving them a total market share of 40 per cent.
“It’s got so bad that, going home one night a few weeks ago, there were four used cars coming off the Arawak Cay port with four expatriate guys, Pakistanis and Indians, driving,” he disclosed. “You’ve got expatriates in here on work permits bringing in cars, and selling them at the side of the road.”
Mr Albury said this presented unfair competition to himself and other BMDA members, as roadside vendors were able to undercut them on price by not having to carry the overhead, staff and taxation costs of established dealers with a physical presence.
The BMDA president emphasised that he and his members were only seeking “a level playing field”, and that any regulatory measures also had had to protect the interests of Bahamian consumers.
“We’re offering simple solutions. They [the Government] need to level the playing field without stepping on the toes of consumers who want to import a vehicle for their own use, and take out the ones in business,” Mr Albury told Tribune Business.
He said the BMDA had recommended to the Government that it introduce a system where Bahamians needed to pay for, and obtain, a license to import a vehicle. Drivers licenses and NIB smart cards would be used to verify identities, and persons limited to importing one vehicle per year.
Mr Albury said this would immediately identify persons importing multiple vehicles for use in a business-type operation, who could then be required to provide Taxpayer Identification Numbers (TINs), evidence of VAT, Business License and NIB requirements, and a physical location.
This would effectively require roadside vendors to formalise their business, and Mr Albury added: “The guys in business now have to do the same thing I’m doing. There has to be some control at the border.
“I know the Government has to look after the small man, but we are the business places paying their taxes, rather than the informal vendor showing up on the side of the road and selling from there.”
Mr Albury also called on the Minnis administration to better protect Bahamians by improving the regulation of wrecked vehicle imports, suggesting one left the Arawak Cay port at the rate of one an hour on the back of a wrecker.
“We have a new Road Traffic system in place where they are titling vehicles,” the BMDA president explained. “With a salvageable vehicle coming in to be rebuilt, Customs can issue a certificate so that when go to Road Traffic, insurance, they know it was a wrecked vehicle.
“In the US, if you have a vehicle that is damaged and sold to salvage, it’s titled as such, so the consumer is protected; they know what they’re buying, the insurance company knows what they’re insuring and the bank knows what they’re lending money on.
“If you take out the profit punch it slows down, and consumers will be protected. These are solutions that will definitely change things considerably.”
Mr Albury said he and the BMDA had submitted their recommendations to both the former administration and now the Minnis-led government. While the new administration had been given just three weeks to prepare the 2017-2018 Budget, he expressed hope that some of their reforms could be acted on by the mid-year Budget next February.
“The door is open for conversations on it,” the BMDA president added. “They [the Government] know what the issues are. It’s up to them.”
Comments
birdiestrachan 6 years, 10 months ago
Not to worry Mr. Albury "It is the peoples time" What people? so said so done . This is what the People voted for, Now they have it.
ohdrap4 6 years, 10 months ago
it was this way all the way back to 2012
ohdrap4 6 years, 10 months ago
actually, they do pay VAT, when they import the vehicle they pay VAT on the import value and on the duty. They just do not get VAT credit and presumably mark all of that up to their customers.
As to the rest, Business License, NIB and property tax, you do not know whether they pay or not.
Let us do that with clothes and shoes too to protect the apparel merchants. Require a license for each package that you pick up from the courier.
ONE PAIR OF SHOES A YEAR, ONE PAIR OF PANTS A YEARS, ONE SHIRT A YEAR.
LOL LOL
If you think government is bureaucratic, you have not met this guy. lol.
ohdrap4 6 years, 10 months ago
i guess a little xenophobic fallacy' might you some sympathy.
how could you tell someone's nationality when they were driving in the night? how did you know they were on work permits. in fact, many of these fireigners have become citizens or permanent residents.
But you need to drive more, you might just find a bunch of chinese selling cigarettes.
John 6 years, 10 months ago
Does Mr. Albert have any vehicle on his lot selling for less than $5,000? And Secondly what law is there to prevent an individual from bringing in a car and selling it? The point is Mr. Albury did not adjust his inventory to appeal to the current market and if he is not supplying the products that are being sold on the side of the street, then they are not his competitors. Bahamians are no longer buying expensive cars that involve bank financing and the way it's done, they can order a car, pay the first costs, the have a few months to accumulate the funds for freight and duties before the car arrives in Nassau. Kelly's and other stores in Marathon Mall have had to battle with R. M. Bailey Park vendors for years and Carmichael for the most part has become a strip mall. And a number of persons who operate are customs officers or other government employees. How then should government move to deal with this? Restrict the number of vehicles any one person can import each year or set a different rate of duty for persons who import with a auto dealer license?
Well_mudda_take_sic 6 years, 10 months ago
@John: We all know you're looking forward to the day when our main local dish will be the 'mud pie'! Don't worry, that day will be here soon enough.
avidreader 6 years, 10 months ago
As they say in Italian: Tutte e questione di soldi: Everything is a question of money. Not many people can afford a new car for 40 or 50 thousand dollars so they look to the used car market, especially in Japan where they know the standards are high. There can be problems with spare parts but this obstacle is not insurmountable. When you stick with Toyota, Honda or Nissan and maintain the vehicle to the recommended standard you can expect a long service life from your purchase. Perhaps one day when everyone is rich there will be a majority of new vehicles on the roads. Until then, check the Japanese used car websites in Tokyo and Yokohama.
JohnDoe 6 years, 10 months ago
Mr. Albury it is called competition and the free market forces of capitalism. Competition and free market forces level the playing field for consumers against entrenched oligopolies like Mr. Albury, Rupert Roberts and the other merchants who have failed to innovate and think they have a God given right to charge Bahamians high prices to purchase basic goods and services. We need more competition in this economy not less. Consumer taste with respect to automobiles have changed due in large part to the fact that the price that you charge for a new vehicle is out of the reach of the average Bahamian. What makes you so special to think that the government must intervene and disrupt free market forces on your behalf just because you do not have the business acumen to adjust your business model to be consistent with the current consumer market sentiment for vehicles. Put on your big boy pants and compete and stop crying like a crybaby.
Well_mudda_take_sic 6 years, 10 months ago
@JohnDoe: "---ditto---" my reply to @John above.
JohnDoe 6 years, 10 months ago
I ain't smart enough to understand your other worldly cryptic complex messages! But if you wanna talk economics I may be able to keep up.
alfalfa 6 years, 10 months ago
As stated before, Mr. Albury and his brother, started their Quality Auto Sales business, bringing in ONLY USED cars some thirty five years ago. At that time he was the thorn in the side of the big auto companies. Now that he is a big guy, he is complaining about people doing the very same thing that he did to get started. Lets not talk about the Customs deals back then. Hypocrite. A new car today, with interest, and comprehensive insurance is outside the reach of most Bahamians, and can cost as much as a small mortgage on a home. Get real. Government has already restricted the importing of vehicles, by issuing a 10 year age limit on imports. What does he want, a exclusive right to sell cars in the country?
truetruebahamian 6 years, 10 months ago
Birdiestrachan, I would actually like to meet and converse - if you are brave enough to consider the invitation. I await your response.
kkphilli4 6 years, 10 months ago
Anytime the small man tries to make an honest buck in this country the "Haves" like Albury and Rupert tries to shut them down. This country is in desperate need for competition on groceries, clothing and yes, cars. If people have moved away from your business, it's because you are too expensive and in 2017 there are other available options for them including ordering online for them to choose from. Remember, we are not Cuba. We are supposed to be a free people, intelligent enough to make our own purchasing decisions. Stop complaining and get in the game and compete but don't try and "hog" all the business in your field. The small man wants to eat too.
Well_mudda_take_sic 6 years, 10 months ago
@kkphilli4: "---ditto---" my replies to @John and @JohnDoe above.
TalRussell 6 years, 10 months ago
Comrades! What's the plan - jail Curbside Sellers? Any private individual should be able to sell up to (12) vehicles in a given year, before being classified as a Curbside Seller - as long as the vehicles being sold are registered in the Sellers name.
You cannot have a Private Sellers restriction - unless you define the maximum number of vehicles a Private Seller can sell over any 12 months time frame - before they can be designated as a Curbside Seller.
Should I not be allowed to import say 5 vehicles and decide I don't like any of them and I want to sell them to private buyers - either because the Car Dealers won't buy from the public - or they won't pay the price I want?
Don't rush pass some stupid Curbside Act that will restrict private vehicle owners from selling what belongs to them.
John 6 years, 10 months ago
@ mudder-take-sic... at least I have a life.. and you are in front of me in the line to eat mud pies.. like you don't know already. When you have nothing to say.. don't say it to me!
Socrates 6 years, 10 months ago
its not fair competition unless we are on equal terms... if i operate from my house but you have an office, staff, utilities, insurance, etc., etc., its not balanced. of course, we bahamians like laws but not enforcement, which is a big reason why we are where we are...
JohnDoe 6 years, 10 months ago
What utter economic nonsense. Was it fair or equal competition when these same dealers controlled 95% of the industry market share and consumers had limited to no choice, option or alternative but to buy from them? Your argument is similar to saying that it was not fair competition that the airplane and other more efficient means of transportation came along and put the Rail roads out of business. Must the government intervene on behalf of these dealers to give them some favorably policies and time to figure out that the fundamental market dynamics in their industry have changed and that they are losing ground because they are failing to adjust?
DEDDIE 6 years, 10 months ago
Adjust or end up like the type-writer.
JohnDoe 6 years, 10 months ago
Totally agree, this is a perfect example of how technology drove the emergence of a substitute product that fundamentally shifted the entire demand curve and consumer preferences with respect to typewriters forever. I guess from the perspective of typewriter manufacturers, microsoft word was also unfair competition.
The_Logician 6 years, 10 months ago
Regardless of the ability of the BMDA members to adapt to changing market conditions, Mr. Albury is correct on several points. A properly licensed new or used car dealer must get a business license, provide a proper location for the sale of the goods, license for VAT, get inspected by MOW and DEHS and so on. Not to mention repeated visits from the price control Nazis. Curbside dealers do not have the bureaucratic overheads to deal with, do not have the overhead costs of a proper location, and are avoiding the VAT regime which in of itself carries heavy penalties if enforced, and avoid price control. Consequently yes it is unfair competition. I wonder if they are charging their customer VAT and keeping it? Simple enough for the Dept. of Inland Revenue to assess their compliance (or lack thereof) when their phone number is sitting on the wind screen!
JohnDoe 6 years, 10 months ago
Absolute nonsense. Do you even understand how the VAT regime work?
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