Head of the T&T Automotive Dealers Association Visham Babwah believes the foreign-used car industry can collapse within six months and put around 8,000 people on the breadline.
He has signalled that there would be an increase in car prices in the near future.
A disgruntled Babwah said the move by Minister of Finance Colm Imbert to slash incentives for car buyers was done without consultation and referral to legislation.
Babwah said 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.
He added this has put many dealers and buyers in a predicament since many have ordered cars from Japan that are due to arrive in December. According to Babwah, if the government was serious about slashing the drain in foreign exchange it would have limited the number of new cars purchased.
He said of the 25,000 cars sold last year, 8,000 were foreign-used vehicles. He said the industry consumes around 30 per cent of the foreign exchange needed for all vehicle purchases. Babwah said many dealers have invested heavily in the training of personnel to service hybrid and electric cars and he fears they would now have to go home.
He said there are around 500 registered car dealers that directly employ around 8,000 people. Babwah said spin-off markets also provide employment for several thousand who are in the business of offerings services to motorists.
Babwah said the prices of cars will now go up by around 40 per cent.
He said a car like the Toyota Aqua that ranged between $65,000 and $75,000 would now cost around $110,000.
Babwah fears that this cost may be too high for consumers.
He added if the government was serious about the drain in foreign exchange they should stop giving away CNG kits for free.
Babwah said these kits cost around $15,000 and are imported.