Despite the economic slowdown, people across T&T are still rushing to purchase brand new motor vehicles for fear that prices may soon escalate.Meanwhile, foreign-used car dealers in south and central Trinidad have been affected as people are opting to purchase new vehicles instead of foreign used ones because prices are relatively comparable.The spike in new car sales follows on the heels of information that computer components and other automotive parts manufactured in Japan were running short, a result of the devastating 9.0 earthquake which rocked north and east Japan, shifting the earth's axis and killing over 11,000 people.
The chips are imported by Korean car manufacturers who supply vehicles such as the Kia Sportage, one of the fastest selling vehicles in T&T.But as domestic demand for vehicles increase in Japan over the next few months, officials in the car business expect that there could be a further climb in prices in T&T and the wider Caribbean because of competition, supply and demand. Their best advice is to purchase the vehicles now before the prices go up further.
At the Southern Sales Group of Companies, chief executive officer Imtiaz Ahamad said he did not think the Japanese disaster had boosted car sales as demands were high even before the tsunami. He said his company sold an additional 431 vehicles for the first two months this year, compared with the same period last year.Saying he did not think price hikes would be drastic, Ahamad predicted that by June, there may be a reduction in the supply of new vehicles.
Most companies, he said, had inventories. But as demand increases, supply decreases and as competition climbs, prices could fluctuate.At Ansa Automotive, a senior official said that at the San Fernando facility, more than 80 cars were being sold per month. He noted that recent price hikes could be attributed to the value of the Japanese Yen, as well as the recent escalation in the value of the US dollar. Asked how he expected the Japanese crisis to affect prices, the official said: "We are not sure as yet how we will be affected. The tsunami destroyed vehicles and also ports, so it means that there will be more traffic at the other ports. This may slow down the process. The availability of parts may also affect the product line."
Sales manager of Diamond Motors Clifton Sukhai also predicted possible increases in vehicle prices as well as all goods coming out of Japan. He said there could also be delays in shipping.But, sales manager at Mc Enearney Motors, Noel Basso, said despite this, vehicle sales were soaring since the beginning of the year. He explained that the Ford Ranger was the hottest seller, with an automatic diesel van going for $222,000. Basso noted that last year, the same vehicle was sold at $199,000.With an April increase set, Basso noted that more people were choosing to buy new vehicles because of the warranty and the sense of comfort. He explained that the banks were offering better rates for new vehicles.
Currently, First Citizens and Republic Bank are offering 8.5 per cent, RBTT nine per cent, while Scotia Bank is offering 8 per cent interest on new vehicle loans.Meanwhile, at Neal and Massy, a sales manager from the Port-of-Spain branch, who requested anonymity, said the Hyundai Tucson was the fastest selling vehicle. He said: "Those vehicles are sold even before they get here. People have to order the Tucson and wait for at least fourmonths before they can get it."
The official explained that during the 2009 recession, Toyota sent home lots of people and now that demand for the Tucson has grown, plants manufacturing the vehicle are few."In Trinidad we order 200, but in South America they would order 6,000. Therefore, the suppliers will give preference to the company ordering the most. We have to pay for it up front...in full. We get only 40 per month, that's why there is a shortage. The diesel-powered Tucson costs $280,000, while the gas-operated costs $230,000," he added.
Foreign-used dealerswant lower taxes
But while the new car industry profits soared, the foreign-used dealers are feeling the pinch. Several foreign-used car dealers who were interviewed said the Government must intervene immediately to save the industry.Prominent South car dealer and owner of Square One Car mart Wayne Khan said Trade Minister Stephen Cadiz met with executives of the T&T Automobile Dealers' Association two weeks ago and several proposals were made. Among these were that the Government should remove the Motor Vehicle Tax on lower CC cars, allow dealers to bring in cars which are up to six years old, allow importation of diesel vehicles and pay VAT to dealers. He noted that Cadiz promised to meet again with the T&T Automobile Dealers' Association.
Khan said the hefty taxes were making their industry unprofitable. Showing some documents, Khan said the 2008 Nissan Tiida hatchback which would have cost $115,000, is now being sold for $130,000. Khan said in previous years he sold between 20 to 30 cars per month, but now he was selling a maximum of ten to 12 monthly."People are window shopping. The new car industry is definitely profiting but not for us. The Government must address this imbalance," Khan said.Desmond Remy and his son Kevin said they had decided to buy a foreign-used car because they were fearful that prices would increase soon.
Remy (snr) said foreign-used cars were for the poor as they were a few thousand dollars cheaper. He said the Government must try to assist the poor by making foreign-used vehicles less costly.President of TTADA Visham Babwah in an earlier interview said the new car industry would be soon hard hit by the Japan crisis. He explained that Toyota and Nissan have already shut down assembly plants at Miyagi, which has an annual capacity of 120,000 units of the Toyota Yaris.Babwah stated that all trade out of Japan had been affected by the spread of radiation caused by the nuclear explosions.He added that importation