With the onset of the pandemic, many industries faced a myriad of unforeseen complications.
For the automotive industry, it was the global shortage of semi-conductors which mashed the brake on production, inevitably trickling down to sales.
According to Massy Motor’s vice president of operations, Jeremy Pagee, the company has observed some sale performance improvement, however, it is still lower than in previous years.
“The question is one of demand versus supply. While there has been a very modest uptick from last year, the restricted supply hasn’t allowed us to meet the potential of the demand, and the market is still below pre-pandemic levels.”
He stated that these supply issues affected the manufacturing of the vehicles, which capped vehicle production since supply issues presented a challenge.
“We’re in new territory when it comes to the vehicle market and sales. On one hand, as we move beyond the pandemic, we are seeing a natural return of some demand, but most vehicle manufacturers and dealers are facing supply shortages both from constraints on the general worldwide supply chain as well as some specific electronic components related to a shortage of semi-conductors used in their manufacture.”
He said these constraints affected the availability of certain models of vehicles.
“Supply has varied with the brands and the models being ordered, with fill rates from manufacturers as low as 40 per cent of orders in some cases depending on the brand or model.”
He also added that the last three months have been particularly challenging from a supply side and the company would have seen “a 10-15 per cent reduction in market performance over the last few months.”
While the supply of these vehicles may be impacted, there must also be some consideration given to the employment rate in T&T.
According to data acquired from the Central Statistical Office’s Labour Force Survey, the period 2021 to 2022 had the highest rate of unemployed people in the labour force as compared to 2013-2014.
A 2021-2022 survey reported that almost 5.24 per cent of the labour force was unemployed.
Due to the chip increases, they have also experienced a fluctuation in vehicle prices, however, Pagee stated that they try to absorb costs as much as they can.
“We have certainly experienced cost increases, but continue to make every effort where possible to insulate our customers from the full brunt of those increases.”
Accounting for customers’ smaller budgets, the company offers a range of vehicles to match the pockets of varying income brackets across T&T.
“Our most affordable unit is the MG3, starting at $175,000 with our most high-end units in the Volvo line with prices of well over $1 million.”
Regardless of the lower end of vehicles, however, Pagee added that some of their mid-range priced vehicles remained in demand.
“Our most popular vehicle remains both the Nissan Frontier and the Hyundai Tucson, with prices ranging from $199,000 to $379,000 or $269,000 to $369,000 respectively for entry level all the way to fully loaded models.”
Despite the already mounting costs of vehicles, Pagee added that customers were still willing to pay extra cash to have additional accessories and features.
“There are particular accessories that have both a functional and aesthetic appeal, for example, side steps, pickup bed tray covers and some specialised decks and head units to enable more functionality. These accessories and additions remain popular with customers if the vehicle does not already come supplied with them.”
He added that while these vehicles already come with upgrades, those purchasing on the higher spectrum of price, tend to request customisations.
“Many models now come from the factory with upgraded rims etc that the customers are willing to accept, but there continue to be requests for specific modifications, especially at the exclusive higher end of the market.”
The VP of Operations also stated that some of these vehicle purchases are not necessarily for private use alone but within the business spheres of some companies.
“There has been a steady and consistent market demand over the last few years for pickups/vans. With many sole proprietors purchasing these units, very often they are for a dual use for both private and small business purposes. I would say that the division in the market between raw commercial use and private/business usage has remained the same.”
Another trend seen in the automotive industry has been the switch to more sustainable modes of transport.
Pagee added that they received numerous inquiries about hybrid and electric vehicle options, which depicted an interest and growing demand in the acquisition of these vehicles. A purchase they encouraged.
“We are a strong supporter of both hybrid and electric technology as the world transitions from pure combustion engine platforms.”
Despite having similar challenges of stock availability, like the regular vehicles, Massy Motors hopes to improve and expand its selections.
“While supply challenges have prevented us from fully leveraging all the available options, we are expecting to introduce a number of platforms this year which will see on average a starting point of around $300,000.”
He also accounted for its steeper price points in comparison to conventional gas engines, since they are more complex with the addition of electric motor(s) and a large battery pack.
“Bear in mind that hybrid and electric platforms are more intrinsically expensive today than their pure carbon counterparts, and also utilise the same components that are currently in short supply.”
He stated that these vehicles were sustainable and more environmentally friendly, a revolution for upcoming vehicles.
“They are generally quite enjoyable to drive and certainly beneficial when you look at the CO2 that is emitted during driving. It is certainly the future.”
Despite this, he added that market availability, logistics and cost may restrict purchasing ability of these vehicles for some time.
“But the reality of current availability and acquisition price for many drivers means that existing platforms around pure combustion will still be with us for some time to come.”
Business Guardian also reached out to the President of the Automotive Dealers Association of T&T Ryan Latchu, who echoed Pagee’s responses.
He confirmed that the Automotive Dealers had noted “areas of growth and decline within the automotive industry in T&T, based on automotive sales, market trends, customer interests and demands.”
He said that while things had slowed down due to COVID-19, sales increases in 2022 made them hopeful for the possibilities it may bring in 2023.
“As a result of the global pandemic both locally and internationally, new vehicle sales decreased year on year from 2019 to 2021, however in 2022 we experienced a marginal rebound which is a positive indicator. We anticipate sales in 2023 to further increase based on consumer demand and better availability of products.”
The Automotive Dealers represents seven companies including, Massy Motors, ANSA Motors, La Fast Motors, Lifestyle Motors, Southern Sales & Service Ltd, Sterling Services (Battoo Bros), Toyota T&T Ltd. He stated that across the board, consumers purchase vehicles geared towards those with mid-range pricing.
“The most popular segments are mid-sized SUVs with Hyundai leading in that area with an average price of $300,000 closely followed by the pickup segment with Toyota and Nissan dominating with average prices of $325,000 and $328,000 respectively.”
He added that since the pandemic, these vehicles sourced from abroad now have a longer arrival time due to several impediments.
“Typically, new vehicle importation takes anywhere from four to eight months to arrive from the ordering stage, based on the manufacturer’s production and allocation capabilities since the pandemic. Pre-pandemic, vehicle importation averaged 3 to 4 months from order confirmation.”
This long wait time may be a dissuading factor to consumers who might have anticipated getting their vehicles sooner.
“This adversely impacts consumers purchasing patterns simply because the supply is heavily restricted for the authorized distributors and dealers thereby, disappointing some consumers at times,” he said.
Latchu also confirmed that the Automotive Dealers saw a boost in interest in hybrid and electric vehicles.
He also stated that these green machines would be the cars of the future.
“There is a growing market for sustainable vehicles and we continue to lobby with the government to allow customers the ability to purchase hybrid and electric vehicles. Sustainable vehicles are the future and customers are interested in vehicles that will reduce emissions in the environment while reducing their operating costs.”