SHAS­TRI BOODAN

Ex­pect the for­eign used car in­dus­try to col­lapse with­in six months’ time, and some 8,000 per­sons end­ing up on the bread­line as a re­sult.

The grim pre­dic­tion comes from Visham Bab­wah, pres­i­dent of the T&T Au­to­mo­tive Deal­ers As­so­ci­a­tion (TTA­DA), in re­sponse to a cou­ple of the mea­sures in Bud­get 2021, which was pre­sent­ed in Par­lia­ment on Mon­day 5 Oc­to­ber 2020, by Fi­nance Min­is­ter Colm Im­bert MP.

A dis­grun­tled Bab­wah told Guardian Me­dia that the move by the Min­is­ter to slash in­cen­tives for car buy­ers was done with­out con­sul­ta­tion and with­out re­fer­ral to leg­is­la­tion. 

“In 2016, leg­is­la­tion was passed that would al­low car deal­ers con­ces­sions on hy­brid and elec­tric cars un­der 1600 cc, up to the end of 2020. This has put many deal­ers and buy­ers in a predica­ment,” Bab­wah said, “since many have or­dered cars from Japan that are due to ar­rive in De­cem­ber.”

The TTA­DA pres­i­dent main­tains if Gov­ern­ment was se­ri­ous about end­ing the drain on for­eign ex­change, it would have lim­it­ed the num­ber of new cars pur­chased.

He notes that in 2019, a to­tal of 25,000 cars were sold, with around 8,000 of them be­ing for­eign used. He said the for­eign used car in­dus­try con­sumes around 30 per­cent of the forex need­ed for all ve­hi­cle pur­chas­es.

Bab­wah al­so points out that many deal­ers have in­vest­ed heav­i­ly in the train­ing of per­son­nel to ser­vice hy­brid and elec­tric cars, who would now have to go home.

“There are around 500 reg­is­tered car deal­ers that di­rect­ly em­ploy around 8,000 per­sons,” the TTA­DA head ex­plained. “And spin off mar­kets al­so pro­vide em­ploy­ment for sev­er­al thou­sands more per­sons who are in the busi­ness of of­fer­ing ser­vices to mo­torists.”

Bab­wah pre­dicts car prices will go up by around 40 per­cent.

“A Toy­ota Aqua that ranged be­tween $65,000 and $75,000 would cost around $110,000 now,” he said.

Bab­wah said gov­ern­ment al­so should stop giv­ing away CNG kits for free if it wants to re­duce forex de­mand, since these kits cost around $15,000 each and are im­port­ed.