The Tribune

• Industry eyes ‘banner year’ and best in a decade

• Vehicle availability and pricing remain headwinds

• Auto Mall chief hopes no tax tinkering in Budget

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Motor Dealers Association’s (BMDA) president yesterday voiced optimism that “the sky’s the limit” for the sector in 2023 after new car sales increased by “almost 40 percent” year-over-year for the first quarter.

Ben Albury told Tribune Business the industry could enjoy “a banner year” if vehicle pricing and supply continues to further stabilise post-COVID, with dealers potentially enjoying their strongest sales collectively in almost a decade.

He added that his own dealership, Bahamas Bus and Truck, has received more new vehicle inventor “in the last two months than we probably saw for the six months prior” as manufacturers and distributors start to catch up on the production order backlog that has plagued the industry since the world emerged from the first pandemic lockdowns.

“So far, so good,” Ben Albury told this newspaper. “Sales have been very robust, and demand is quite high. We’re seeing quite a lot of floor traffic, and that is reflected in the reports I’m seeing from across the BMDA. I know that in our business we can probably attribute that to starting to see some inventory coming through. It’s still not as quick and to where we’d like to see it, but there’s definitely been a noticeable improvement so that’s encouraging.

“Sales are up quite a bit. We’re seeing about a 40 percent increase over the first quarter last year. That’s very significant; I didn’t even realise it was that much. If new car sales continue on the pace they’re on right now, we could easily see a year as good as maybe 2013 or 2014. These type of levels we’ve not seen since then; certainly at least for seven to eight years.”

Ben Albury credited the robust post-COVID revival by tourism and the wider Bahamian economy for stimulating consumer demand for new vehicles. “I would say that’s far exceeded expectations,” he said of the 2023 first quarter percentage increase, although he did not provide actual figures. “I know January, February and March were all outpacing the months before.

“I know during that period we were seeing quite a bit of inventory coming in, which is what I would attribute it to in my own personal business. It seems the demand has stayed very solid, and it’s got much better getting inventory. Inventory is coming through a lot better. There’s still some delays, and we have been having to adjust some orders to remove certain components or certain features that it may be problematic securing the necessary components for them to work.

“But, overall, we’ve seen more inventory come through in the last two months than I probably saw for the six months prior. It just seems that if we can continue to stabilise the supply and get some sort of consistency it seems like the sky’s the limit this year. I’m very optimistic we’ll have a banner year this year,” the BMDA president told this newspaper.

“I’m still holding my breath because suppliers have been telling me for a while that things are going to get better, things are going to get better. I’ve been hearing that for over a year. I’m not 100 percent confident, but it’s good to see that improvement and good to see the results of that improvement. I’m optimistic, though, that these trends will continue so let’s keep our fingers-crossed.”

Ben Albury, who revealed that the BMDA’s Car Show is likely to be held for the first time in four years as it makes its post-COVID return, said that apart from lingering supply chain and inventory issues, the only other major headwind facing the Bahamian auto industry is the slow, steady increase in vehicle prices stemming from high shipping and raw materials prices.

“I’m still seeing steady prices increases every month,” he told Tribune Business. “They can range. Some are 3-5 percent, and some maybe a bit more minor, 1-2 percent, but if it’s consistently increasing 1-2 percent over the previous month that can really make a pretty big difference.

“They’re [suppliers] still citing components, shipping costs and raw material costs. The thing with prices is once you see them go up they never come back down. They cite all these challenges in making the increases, and when things start to level off and taper they don’t go back and make adjustments to their pricing while giving you less inventory than they did before.”

Fred Albury, principal at the Auto Mall, the Toyota, Hyundai and Suzuki distributor, echoed the BMDA president’s views on vehicle pricing and inventory availability. “It’s way up, but a lot of that is fleet business with the Government there,” he said of the sales increase. “Whether that is going to continue through I don’t know, but the market has been very strong. Demand is very strong, and dealers seem to be getting more inventory as well.

“I haven’t looked at the numbers out there, but the numbers have increased considerably especially from one of the distributors in particular because of the fleet business they’re getting from the Government.” While Auto Mall was “still kind of light” on brands such as Toyota, Suzuki and Hyundai, there were signs of inventory shortages easing for many dealers.

Nevertheless, Fred Albury said: “If I order 50 vehicles for the month I’m lucky to get 30. But this is a lot better than the last few years. Sales have been strong for the first quarter. The dealers needed that kind of uptick to get profitability levels back up. It translates into profitability in the future from service and parts; spare parts.

“Suppliers are still saying that the chip shortage is with is, and it’s going to take the rest of the year to level out there. The other thing that might slow things down is pricing. Prices are increasing because raw materials have increased, because shipping has increased, so it might slow things down somewhat. Some months we’re seeing 1-2 percent increases, and that continues for four months, and then we might see a 2 percent rise.”

The Auto Mall chief also voiced concern that the Government may be tempted to tinker with the industry’s tax structure and rates in the upcoming Budget, which is due to be unveiled on May 31. “I just hope that when Budget time comes around the Government doesn’t tweak the numbers hoping to get more revenues as they will shoot themselves in the foot,” he said.

“We’re having trouble finding people to work these days. Just about every company about town is having issues as well. That’s a good indicator the economy is on the up and up, so sales are strong. It’s back. Toyota was our number one band last year for sales. Hyundai has started getting some bigger shipments in as of the last month, and Suzuki is getting some shipments in.

“Nassau Motor Company is getting shipments, and Kia as well. The playing field is more level, and everyone can share in it.”