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COVID shutdown for auto dealer’s ‘major generator’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

One of an auto dealer’s “two major generators” has likely been forced to close until tomorrow after almost one-third of staff tested positive for COVID-19 amid the latest case surge.

Fred Albury, the Auto Mall’s principal, told Tribune Business “just about every sizeable company in this country” has been hit by staff shortages related to the Omicron variant’s spread after the dealership was last week forced to close its service department when multiple employees tested positive for the virus.

Voicing surprise that the Government has yet to reintroduce more curbs to crack down on large social gatherings, he added that worker absences and partial closures had become “a part of doing business” that was exacerbating the challenges Bahamian auto dealers face in obtaining sufficient vehicles from their overseas suppliers.

Factory backlogs, microchip shortages and global supply chain shortages have left many companies with too few vehicles to meet consumer demand, Fred Albury said, arguing that greater product availability could boost the industry’s new auto sales to up to 1,900 in 2022 - an increase of around 27 percent upon last year’s estimated 1,500 total.

He was backed by Ben Albury, Bahamas Bus and Truck’s general manager, and the Bahamas Motor Dealers Association’s (BMDA) president, who told this newspaper that

Meanwhile, Fred Albury said that with vehicle inventories down to the bare minimum, his Auto Mall business - which includes the Quality Auto (Hyundai and Suzuki), Executive Motors (Toyota) and BMW dealerships - has become increasingly reliant on its service and parts functions to drive consistent cash flow. These are the very same segments hit hardest by Omicron-enforced absences.

“The impact hit us yesterday and the day before,” the Auto Mall chief revealed on Friday. “Our service department is closed at the moment because 50 percent of the people tested positive, and the parts department is down to 40 percent of staff. We’ve managed to make it through today, and will see what happens on Tuesday or Wednesday when we send people out to test.

“It’s a part of doing business these days. It’s the front office staff that’s part of it. There were eight there, and three parts people. All in all, we’ve had 20-25 people that have tested positive, and in total we’re about 75-77 persons. It’s about one-third of the staff.

“Service and parts are the two major generators out there at the moment because we’re practically sold out of vehicles with the supply chain issues that have hit us. If you pass my property, if you pass by the front of the Hyundai showroom, we have two vehicles, Toyota six-eight, and BMW is basically sold out; we may have one or two in the showroom.”

Emphasising that Auto Mall was far from alone in its present struggles, Fred Albury added: “It’s impacting everyone I’ve spoken to..... I think just about every sizeable company in this country has been hit with this situation, especially after the holidays and uptick in visitors coming in.

“I’m sort of surprised they’ve not put a curfew back in place to slow down the movement of people, and closed down Fish Fry and areas like that where are mass gatherings. They need to crack down on social gatherings.”

Reimposing a curfew would reverse the first act the Davis administration took upon assuming office following the September 16 general election, so it will be unlikely to take that approach. It has also repeatedly said there will be no lockdowns, border closures or other extreme measures as it seeks to balance lives and livelihoods, fearing such restrictions will wipe out businesses and jobs.

Giving further insight into the supply chain woes impacting the auto industry, Fred Albury said any product Auto Mall was importing now had already been pre-sold to local buyers. “If we order 40 cars per month on the Toyota side, I usually get 15-20,” he explained.

“We were just able to complete a fleet deal for Avis [rental cars] that was ordered six months ago. Now I have another rental car company that needs ten vehicles, but they have to wait, and the Government wanting vehicles. We’re having difficulty securing product for them.”

Predicting that 2022’s new auto sales will be flat compared to 2021 levels, Fred Albury added: “If we get product we will see a sizeable uptick in the second half, and if the chip shortage resolves itself. I estimate that, in total, the industry will do 1,500 units, which is similar to last year. If we can get product, the industry could do 1,800-1,900 units.”

However, he added that Auto Mall was “way down, way down” on normal inventory levels, with one brand - Executive Motors - that typically has 150 vehicles in stock now down to just ten. “The demand is there but the supply is not,” Fred Albury said. “My bank is not too happy as they have no overdraft any more, so they’re not making interest from me, but it impacts our cash flow.”

His namesake Ben, the Bahamas Bus and Truck general manager, told Tribune Business that vehicle inventories were probably down 80 percent compared to pre-COVID norms due to supply chain bottlenecks.

“It’s been very, very difficult,” he said. “The demand is great, which is not something we would have expected a year or two ago. Demand has far surpassed my expectations. The biggest problem is getting supply. My suppliers are definitely not giving me the best case scenario. They are telling me to be prepared for this to extent for another 12 months.

“We have a lot of clients with particular needs and wants, and they may have to settle for something that will not be the ideal scenario, especially on passenger vehicles and high-end vehicles. It’s almost impossible. I have had some orders in for 11 months and do not have a production date.”

Acknowledging that all Bahamian auto dealers and, indeed, most sectors of the economy “are in this together”, Ben Albury said of his industry: “We’re probably down on sales 40 percent compared to pre-COVID numbers. I have people that want very expensive and nice vehicles but, no matter what, I cannot get it. That’s the price range we’d love to be in - $50,000 to $100,000.

“We’re struggling across-the-board, but those are the ones that are pretty much impossible. The others face a delay no matter how many orders you put in. We have to roll with it.”

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