New car sales down 27% | Local company
In 2020, 9,756 new cars were sold.
Of this amount, 6,702 were classified as passenger vehicles for private use, while 3,054 were for commercial use.
The most purchased vehicle was the 2,072-unit Kia Sportage.
Conversely, the least purchased was the two-door coupe, with only eight.
For commercial use, the most popular vehicle was a 1,307-unit 4×4 pickup.
New vehicle sales in 2020 were 27% lower than in 2019, when the figure was 13,420.
According to the president of the Association of Car Dealers of Trinidad and Tobago (ADATT), Ryan Latchu, who is also president of Toyota T&T, new car sales stagnated from January to September 2021 compared to the 2020 equivalent. .
“We basically sold 50 units less this year than the same time last year. And we’ve been locked up for two months this year and two months last year, so we’re going to call it flat, ”he said.
“For the remainder of 2021, the outlook is similar for 2020,” he said.
He observed that new car dealers face many challenges.
The first is change.
“Since 2015 we have been facing forex and the government has focused on other industries as opposed to the auto industry,” he said.
This was picked up by Southern Sales CEO Imtiaz Ahamad and Massy Motors senior vice president Jean-Pierre Du Coudray.
However, Du Coudray said that since Massy earns currencies from his other subsidiaries, he is not always at the mercy of the banks’ tight currency situation.
The impact of Covid-19 has been profound for the industry as it affected assembly in Asia and created a shortage of semiconductor chips needed for new vehicles.
“It has hampered production and it means less sales,” said Du Coudray.
Then there are the transportation costs.
He observed that so far freight costs have had minimal impact on the cost of cars, but said it was still too early to say what the end result would be next year.
And finally, he said, the economic landscape continues to be difficult for businesses.
Latchu said a metric used by ADATT for projected sales is typically energy prices.
“When oil and gas prices are high, we usually find that we sell more vehicles,” he said.
Ahamad said that due to delays from Covid-19, there is now a waiting list for customers due to solid-state chip issues as well as freight.
He said Covid-19 had had an impact on assembly lines and that although trade was picking up, it was more difficult to meet demand.
“In this regard, the auto industry has been hit the hardest,” he said.
On October 4, in his presentation of the 2022 budget, the Minister of Finance Colm Imbert declared in accordance with the government’s commitment to promote a green economy and reduce the country’s carbon footprint: “I propose to remove all rights of customs, motor vehicle tax and value added tax. on the import of battery-powered electric vehicles with an age limit for imported used battery-powered electric vehicles of two years. This measure will take effect on January 1, 2022 and will be reviewed after two years. “
While the local auto industry is widely receptive because of the positive impacts such policy decisions will have on the world due to climate change, it remains skeptical of public buy-in as it would also mean a cultural shift for the country. .
This cultural change is twofold: an understanding of the environmental impact of fuels and the fact of having to recharge cars at stations rather than refueling at the pump.
At present, there is already a company that brings in electric vehicles.
It’s Lifestyle Motors’ luxury brand, Porsche Taycan, which sells for over a million dollars.
So far, six have been sold in T&T.
Latchu said there are brands in the market that offer electric products, like Hyundai’s Kona (soon to be commercially available in T&T) and Massy recently introduced an MG brand, which also offers an electric option.
“I think over the next five years we’ll have 15 brands of hybrids on the market,” he said.
He observed that this will be dictated by the political orientation of the brands that are distributed here.
On the issue of hybrids, Ahamad said it will take work.
“It’s not a quick decision. You might want to do this, but then you have dealerships talking to the manufacturers and the process tends to be a bit long. So you won’t immediately see success or change. But the government’s policy is good for the country, ”he said.
But try the hybrid first
According to Du Coudray, the government should have let the market flirt with hybrids before moving strictly to electric vehicles.
While he praised the overarching goal of electric vehicles, which would bode well for the environment, he noted that the market is only now entering hybrids.
Massy sells the Hyundai Ioniq which is available in electric and hybrid versions.
Latchu said that between January and September 2020, 333 hybrid units were sold, but for the same period in 2021, it was only 47 due to the removal of tax and customs breaks for the under-18 category. 1600 cc.
Du Coudray said the removal of the tax and duty had hurt the market.
In his presentation of the 2021 budget in October 2020, Imbert said tax breaks would be removed on the import of private vehicles from the end of this month.
“At nearly a million vehicles, there are just too many cars on the roads in Trinidad and Tobago today. As a country, we spend $ 2.5 billion a year or $ 400 million. US dollars per year to import an average of 25,000 vehicles per year, of which at least two-thirds are for passenger cars.
“This created a serious currency leak. We are proposing to remove all tax benefits for importing passenger cars. All passenger cars will now be subject to customs duties, motor vehicle tax and value added tax (VAT), with the lowest rates of duties and taxes being imposed on hybrid cars, electric cars, CNG cars and small engine cars under 1500 CC to encourage low usage. . “
However, tax breaks would remain in place for commercial and industrial vehicles and on public transport vehicles.
Du Coudray told Express Business that the hybrid market evaporated when it accounted for 5% of Massy’s total sales.
“We would sell 30-35 a month, but when you have a 30% price increase, it’s down to about two because once that price goes up you have a lot of other options for the consumer,” he said. he declares. On electric vehicles, he observed, the average customer will not want to go in one step right away because it is a cultural change and the infrastructure has to be built.
“That’s why hybrids make sense, because customers have the ability to feel it and be more comfortable when they want to take the leap. It’s a transition from normal to electric overnight, ”he said.
He observed that Barbados had competently built its electric vehicle infrastructure, but T&T was starting now.
“Not everyone will have a home charger, so you will have enough places to charge yourself,” he said.
But once it’s doable and there is demand, Massy will bring them in, he said.
On the cost side, for Du Coudray, economies of scale must also be taken into account: bringing in five is more expensive than 500 units.
He said Massy was hit short term by freight issues.
“At this point, it is too early to say what the impact will be on the cost of cars. Over the months, we have no choice but to pass this cost on to the consumer, ”he said.