The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Auto dealers yesterday said they were bracing for the two-week lockdown’s “crippling” effect after suffering an industry-wide 55.5 percent decline in new vehicle sales for the 2020 second quarter.

Rick Lowe, the Bahamas Motor Dealers Association’s secretary, told Tribune Business that the national shutdown which began last night had cut-off the “sense of normality” that had begun to creep back into the sector and wider economy following the initial COVID-19 restrictions imposed in March and early April.

With new vehicle sales down by more than 200 units year-over-year against 2019 second quarter comparisons, Mr Lowe added that the industry’s near-term performance would depend heavily on how long the latest lockdown lasts amid expectations it will persist beyond the initial fortnight.

“It’s not good, but what can you do? People won’t social distance and wear masks,” he said. “We had just started to feel some sense of normality. Things were not exactly like we needed them, but we were heading in the right direction. It’s going to cripple us, quite frankly, and is certainly going to make recovery even harder.

“While I understand the process, I’m a little disappointed the decision had to be made. It’s quite discouraging. Sales through June were 177 units for the second quarter as opposed to 398 in the second quarter last year. It’s been around 400 units for the second quarter for the last several years.

“In the first quarter we held our own, but the second quarter was when all this came into play. This quarter depends on how long this [lockdown] has to go on. Businesses just can’t keep paying wages without some revenue, just like the government. You can borrow, but there’s only so much you can borrow.”

The latest two-week national lockdown leaves companies facing the prospect once again of having to pay fixed costs, such as rents, utilities and bank payments, with no revenue earnings; employees likely to be temporarily furloughed, adding to the social security burden on government; and Bahamian families already struggling being threatened with more hardship.

Fred Albury, the Bahamas Motor Dealers Association’s (BMDA) president, told Tribune Business that the latest lockdown was “a bitter pill to swallow” for the auto industry, individual businesses and the wider economy.

He argued that “the innocent are going to suffer for the guilty” - a reference to the numerous Bahamians who raced abroad to COVID-19 hot spots such as Florida once the borders opened on July 1, only to bring the virus back with them.

“Hopefully we’ll stay alive. That’s what it has boiled down to,” Mr Albury said. “Money can always be made, but you can never find another life. I’d rather be safe than sorry. It’s a bitter pill to swallow, not only for the auto industry but the rest of the economy. The innocent are going to suffer for the guilty who have gone away and brought the chickens home to roost.

“I’ve made up my mind. I’ve got chores to do at home, and will go and do that and keep my mind busy until we get the green light to come back out. My gut feeling is this is going to be longer than a couple of weeks. The amount of cases that are out there, the amount of community spread probably already created is tremendous, I’d not be surprised if we end up with 1,000-plus cases.

“Everyone can moan, bitch and cry all they want. This is the necessary ill we have to take to deal with the matter.” Mr Albury, though, said his Auto Mall business had received a modest boost from being allowed to open for several months.

“The opportunity to re-open for the short-term really benefited us a lot. We had some sales, and service and parts was brisk; very brisk. We got a lot of inventory in, and sales were better than I anticipated to be quite honest with you. It helped to allow us to unload some inventory, generate some cash flow and stay alive as well,” he added.