The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

New car sales maintained their decade-long plunge with a near-16 percent decline during the 2018 first half, as one dealer revealed he "sees no hope" for a short-term revival.

Speaking after the latest Bahamas Motor Dealers Association (BMDA) figures were revealed, Ben Albury, Bahamas Bus & Truck's general manager, told Tribune Business that Baha Mar's several thousand hirings had yet to convert into increased sales.

Describing July as "very poor" amid consumer uncertainty over the VAT rate hike, Mr Albury pleaded with Bahamas Customs to refund a six-figure import duty sum - some of which has been outstanding for five years - for vehicles previously sold to the Government or buyers granted duty-free status.

Having imported millions of dollars worth of inventory since, the Bahamas Bus and Truck executive said those monies were "especially critical to our cash flow at a time like this" when consumer demand remains depressed.

Mr Albury also added his voice to those dealers warning that the budget changes will not have the impact intended by the Government. While backing the Minnis administration's ambitions, he explained that restricting the 40 percentage point Excise Tax rate cut to vehicles with 1.5cc engine capacity or less would benefit too few models or dealers.

He suggested that it instead raise the threshold to 2cc, and also urged the Government to crack down on "the Wild West" created by the proliferation of unlicensed roadside vehicle vendors paying little to no tax.

"I've been seeing a little more floor traffic in the last couple of weeks in terms of people looking," Mr Albury told Tribune Business. "That's the way this business has been going for the last several years.

"It's very volatile. One day you do not have a showing at all, and the next day you have ten customers come through. It's been very sporadic. We hoped more floor traffic would lead to more sales, but it hasn't translated as yet. Last month was very poor. We did sell a couple of used cars, but the new car market remains stagnant."

Mr Albury said the major obstacles to industry recovery remained the inability of buyers to obtain financing, with the banks reluctant to lend to anyone bar the most qualified borrowers, and the still-sluggish Bahamian economy amid an absence of business and consumer confidence.

"No matter what they say, no matter what data they see, everyone in the industries I talk to says the economy is down, unless you sell numbers and alcohol," he told Tribune Business. "I talk to people daily, weekly in a number of different industries and am hearing the same thing.

"I thought by now, looking at the thousands of people hired at Baha Mar, that we may have seen some recovery from that, but it's not panned out to anything like that. Looking at the Government employment statistics, Baha Mar has probably absorbed a lot of people laid off from other sectors feeling the pinch. In the short-term I don't see any hope."

With new car sales hard to come by, Mr Albury said he and other dealers needed all monies due to them. "My other big issue is that Customs has a very large sum of money outstanding to us," he told Tribune Business.

"Some of it has been outstanding from 2013 and 2014. In a lot of cases it was for vehicles that the Government purchased or people were given permission to buy duty-free for various reasons.

"We have to go back to Customs for refunds, and have to wait years, while in the meantime we're importing millions of dollars of goods. I have to pay upfront to get vehicles released, and they're holding on to a bunch of money that, especially at a time like this, is critical to our cash flow. I pleaded to one of the gents in the refund department today and said: 'I'm literally begging you; please, please, please."

The 2018-2019 budget cut the Excise tax rate for vehicles with engines below 1.5cc to just 25 percent, compared to the previous 65 percent. The cut was enacted to make new, smaller and more fuel efficient and environmentally-friendly vehicles more affordable for Bahamian consumers.

Mr Albury, though, echoed other dealers in arguing that the engine size limit was set too low, meaning it will cover too few models and not have the widespread consumer benefits desired by the Government.

"I don't think they really understood when they made the change that 1.5cc doesn't achieve anything," he said. "I heard them make mention that they want to change the country's carbon footprint, but we have few of those vehicles. 1.5cc does not make it easy for people to change. I think it would be smarter to look at 2.0cc. There's not a whole lot manufactured at 1.5cc."

Mr Albury also called for greater enforcement, telling Tribune Business: "I see cars parked all over the road. I see them lined up and the Government is doing nothing apart from talking about what they're going to do. There's no enforcement; it's just a Wild West."