Monday, January 22, 2018

Car sales up 6.7 per cent


ADATT president Philip Knaggs

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TTADA president Visham Babwah

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Any commuter on Trinidad and Tobago's roads knows this country has a lot of cars.

Licensing Office statistics show that in the last four years licensing series registering 9,999 motor vehicles were processed at the lightning speed of one series every three to four months.

The Automotive Dealers Association of Trinidad and Tobago (ADATT) estimates that every month, 1,100 new vehicles being sold every month with an estimate of 13,163 total for 2011.

"This is a 6.7 per cent increase over last year," says Association president Philip Knaggs.

He said based on engine size rather than brand, the 1.6-litre engine was the most popular pick among new buyers, but cars got exponentially more expensive as the engine size increased because of the changing tax structure.

The luxury new car market, he added was average, with no real change in buying patterns.

There is also a growing demand for foreign used cars. In July Trade and Industry Minister Stephen Cadiz announced that Cabinet had given approval to increase the import age limit of foreign used cars from four to six years, a move that was overwhelmingly welcomed by foreign used car dealers.

Visham Babwah, president of the Trinidad and Tobago Automotive Dealers Association (TTADA) said since the decision, there has been a definite increase in sales.

"Our members are reporting a sale every week. Before, it was more like every three weeks. We got approval late so the first shipment of four to six year old cars have only just come in, but people are demanding them because cars are now in their price range," he said.

He said since then, dealers have imported 1,200 in those three months out of the 13,500 yearly quota.

Babwah said these older cars are more within people's budgets. Whereas newer foreign used vehicles would have cost just 20 per cent less than new cars, these were significantly cheaper, with prices as low as $60,000 to $80,000.

The Nissan Tiida model, he said, was selling at $85,000 foreign-used, as opposed to almost $150,000 new.

He added that people from all demographics were buying these cheaper cars.

"Everybody is buying cars public servants, doctors, lawyers, politicians even. These are good cars, with high grades and people like to save a few dollars in fact a few thousand dollars," he said.

Babwah said he also noticed several transactions were paid in cash, rather than through bank loans.

"I think this is very good for the country because it means people are not putting themselves further in debt," he added.

Knaggs said regarding new cars, the stance taken by banks had been traditionally conservative with lending criteria.

"I do not believe that this will change in the near future," he said in an email to the Business Express.

These features are indicative of the country's current economic situation.

In its Monetary Policy Report for November 2011, the Central Bank noted that the value of consumer loans for the purchase of new motor vehicles grew by 8.1 per cent in September 2011.

In a Business Express story last month, president of the Bankers Association of Trinidad and Tobago Richard Young said loans for vehicles were running interest rates of about eight or nine per cent, when a couple years ago they were in the tens. This, he said, was because of the low consumer demand for bank loans.

Knaggs was critical of the government's decision to increase the foreign-used car import age.

"I feel that the government made a huge mistake by opening the floodgates to six-year old foreign used vehicles. Simply put, the roads cannot handle a huge influx of foreign used vehicles. Also, these vehicles will have older safety technology and I cannot see how the government intends to protect the buying public," he said.

Babwah said it was the new car dealers that provided most of the car sales annually about 20,000 for the foreign used car industry's 5,000.

Both men agreed that the country's roadway infrastructure needed to be developed.

"There is much infrastructural work that needs to be done in this country. Roads need to be built where there were no roads before. Something as simple as basic highway signage is lacking. And, of course, the Government has to ensure that the citizens are provided with a reliable and efficient public transportation system," said Knaggs.

Babwah said the significant revenues created by the industry to the government billions of dollars in taxes should go back into developing the infrastructure and public transport services.

Transport Commissioner Rueben Cato admitted that while the regulatory monitoring system for motor vehicles, especially for foreign-used vehicles, is not as tight as it should be, but new legislation is in the cards under the Motor Vehicle Act.

Knaggs and Babwah concurred that the authorities were supportive in considering changes to make the current antiquated system more efficient.

"The major problems we are having regarding Customs and Licensing is getting out cars in a timely manner, but we have had discussion with Customs and the Licensing Office and they work with us to solve our problems," Babwah said.

"We are working with Transport Minister Devant Maharaj to create a new system for the public that will finally be user-friendly. Once we are allowed to be and stay involved, the local dealers will work hard to change what is an antiquated and broken system. Minister Maharaj and the dealers must work hand-in-hand. I believe that this is the way forward," said Knaggs.