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.