New car sales down 63 percent since 2007

Wed, Aug 31st 2016, 10:04 AM

New car sales decreased by 63 percent from 2007 to 2015, according to Nassau Motors Company (NMC) Director and Operations Manager Rick Lowe.

The figure consists of car sales from the 15 members of the Bahamas Motor Dealers Association (BMDA), excluding Volkswagen Bahamas.

Lowe said that sales were down 38 percent from 2014 to 2015, and that from July 2015 to July 2016, new car sales experienced a further eight percent decrease. He told Guardian Business yesterday that government may be losing potential revenue from the increase of used car sales versus new car sales.

"I think government revenue is down dramatically," said Lowe.

He explained that if the duty on a new car is on average $10,000 to $15,000 and the duty on a used car is $1,000, then more used cars need to be sold in order to make up the difference in the loss of new car sales.

Lowe shed light on the wider economic impact of a decline in new car sales.

"It just confirms for us that the economic growth has been stagnant and the other issue involved is the regulatory requirements that the government keeps loading on the private sector. We are now the government's tax collector. We have forms to fill out, and the government doesn't want to pay the people if the people haven't paid their taxes. So, they come and charge stuff and then deny payments if you don't present to them a tax compliance certificate (TCC).

"The effort to make money and spend time developing business is (impeded by) having to fulfil regulatory requirements by the government," he said.

Lowe added that people are buying used cars on credit and the term of the loans is longer than the life of the vehicle.

"We tend to feel that people are buying the older vehicles for less money," he said.

Lowe said the BMDA had a meeting with the Ministry of Finance to complain because car dealers are paying more in business license taxes and the government is charging taxes on gross sales rather than net profits.

Lowe said the used car market is a "horrible market to say the least".

Xian Smith, Guardian Business Reporter

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