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Auto dealer eyes 15% cut back on ‘taper off’

• Summer order caution after ‘bumper years’

• Auto Mall chief: ‘Gut feeling’ urging caution

• Commercial vehicle demand rises 10-15%

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A BAHAMIAN auto dealer yesterday said he plans to “cut back” on summer orders by 15 percent amid fears consumer demand will “taper off” despite a strong start to 2024.

Fred Albury, Auto Mall’s principal, told Tribune Business that his experience and “gut feeling” were urging caution on upcoming new and used auto inventory because after two “bumper years” for the sector “the market can only bear so much”.

Speaking as early 2024 data indicated the industry is matching the same sales pace as last year, he acknowledged that January and February had been “very strong” with economic activity and consumer demand matching 2023 levels.

However, Fred Albury told this newspaper: “I feel by the second half of this year there’s going to be a bit of a tapering off so that’s what I’m factoring into our ordering. The market can only bear so much. We’ve had two strong years, 2022 and 2023. That’s my opinion, my gut feeling and my experience over the years.

“I’m probably going to, for the summer months, go a bit less on inventory. I’m speaking for Executive Motors [the Toyota dealer]. My brother is still doing very well with Quality Auto, Hyundai and Suzuki. To answer your question, I will probably cut back on orders by 15 percent for the summer months and see how things go from here and whether we will go back into regular ordering.

“2023 was a bumper year; probably one of our best seasons for a long time. It is not going to be strong like this for ever,” Fred Albury continued. “We have to factor in that it will slow down out there. The hurtful part is with the ordering.

“It’s a four-five month cycle from the time you order to receiving the vehicles. If things slow down, you have to store and fund the inventory or discount it. Stuff like that. I don’t want to get into that position.” The Auto Mall chief spoke as industry data, accumulated by the Bahamas Motor Dealers Association (BMA), showed new vehicle sales matching 2023 numbers through January and February.

Ben Albury, the BMDA’s president, told this newspaper: “Based on January and February, we’re on the same trajectory we were on last year. Looking at the two months, if we were to break them down and extrapolate over 12 months, we’re a hair above where we were last year - about ten to 11 units over. If all things remain the same, we will have a slightly better year than we did last year.

“January was just below what was last year, and February was just above where it was last year. We’re pretty much on an even keel at this point. From everybody I talk to they seem very optimistic. It seems like the businesses are doing well and the production is starting to really get moving.

“If we can just keep this going and get supply.... I’m starting to get vehicles I was fighting very hard to acquire last year. I think it’s a lot about getting production now.” Ben Albury, who is also Bahamas Bus and Truck’s general manager, and other Bahamian auto dealers have been prevented from obtaining the vehicle inventory required to meet demand by the post-COVID supply chain backlog and manufacturer delays.

However, the BMDA president yesterday described his dealership’s inventory levels as “swollen right now”, likening the situation to where “the tap is starting to crack open and its rushing out”. And, in a sign that the Bahamian economy remains robust, he revealed that Bahamas Bus and Truck has seen a 10-15 percent increase in demand for commercial vehicles.

“The economy is very strong, construction is very strong, and we’re seeing a lot of demand for commercial vehicles, both in the construction field and delivery vehicles - that type of thing,” Ben Albury told Tribune Business. “I can only say on my end we’re seeing about a 10-15 percent increase in commercial vehicle demand.

“As long as tourism stays strong, and construction stays strong, we can look forward to a good year. I always talk to people when I go into a business and ask around, and most people I talk to seem quite busy. I’m also seeing vehicles now that last year they were only trickling through.

“On what’s been shipped and what’s arriving, those numbers are starting to climb pretty quickly. I’m hoping by the end of the year things will be back to normal. I’m swollen right now. I have tons of inventory. A lot of things I was working on, the tap is starting to crack open and are rushing out,” the BMDA president continued.

“The bad part is that I have to watch space and cash flow. What I find when I’m inventory heavy is that my sales are better. People feel they can come here and have more to choose from. We have a broad selection and are expanding some of our model line-ups. People feel as if they are not being pressed into making a choice when there is a lot of inventory.

“I figure that, by summer, my inventory should be pretty much anything you want.” However, Ben Albury also voiced concern about the difficulties involved in keeping vehicle prices under control given the ever-increasing cost of multiple auto components as well as other variables such as shipping costs.

“The kicker is the pricing, keeping that under control,” the BMDA president said. “Nothing in this world seems to slow down on pricing. I would say, over the last four to five years, prices on some models could have gone up by as much as 20-30 percent. Shipping costs, material costs, it never ends.

“But everybody I talk to in the industry seems to be happy and feels this is going to be another good year. It’s still early but that’s where we’re aiming.”

Comments

TalRussell 2 months ago

Auto Mall’s principal Freddie Albury is a 'Respected Comrade of the Utmost Order' (RCOUO).. --- Yes?

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