A car dealer claimed yesterday that there has been a 180 degree turnaround in the proportion of used and new cars being sold in The Bahamas since pre-economic downturn levels, suggesting that as many as 75 percent of all cars being sold in recent times are used.
Rick Lowe, director/operations manager for Nassau Motor Company, and a spokesperson for the Bahamas Motor Dealers Association, told Guardian Business that while he had yet to receive updated figures from one major dealership, all indications are that new car sales across the various dealerships for the year to date are largely in line with the previous year.
"They're flat with a slight downward trend based on the previous year," said Lowe, who added that floor traffic in his dealership - suggestive of interest in new purchases - is also failing to grow, suggesting limited demand.
His comments were echoed by Bahamas Bus and Truck Co. Ltd. General Manager Ben Albury, who said he agreed that sales are slow - a fact made worse by his observation that they are also less predictable than ever.
"There's no real consistency, one day I'll be sitting here doing nothing, and then next day selling five cars. I've never seen it so sporadic. It's very inconsistent and I don't know what to attribute that to. It's difficult to project in any way and so it's hard to keep my inventory stable and monitor my cash flow."
Both dealers noted the impact of the continued contraction in customers' ability to access financing for new cars as critical to the currently low levels of car sales.
Meanwhile, they noted the role of the new environmental levy, the customs administration fee, and other budgetary changes introduced on July 1st in the 2013/2014 budget as further factors dampening the sales environment.
Lowe said: 'People aren't qualifying generally speaking. There's various issues with spouses not working, people having salary cuts or losing jobs. I think really it's the economic issues that are causing people not to be able to qualify. I don't think banks have upped their terms."
On the budgetary measures impacting the sector, he added: "There's the environmental fee, the customs processing fee, an increase in duty - it's adding around an additional 10 percent in costs.
"I think we're all sympathetic and understand the dilemma government is in... but they're not going to get it by pricing everything out of the market so everyone goes to Miami." Albury said:
"The duty structure needs revision and so do a lot of the new fees which have been attached to imports of automobiles. "We're still experiencing quite a bit of a credit crunch.
I've spoken to ladies I know in loans departments, and it's not from any lack of applications, because they do have a lot of people consistently coming in for loans, it's a matter of confidence - whether people are in a position to pay back the loans, which speaks to the overall condition of the economy.
"I find a lot of consumers lack confidence too. Lenders don't have confidence, neither do people and I don't see that changing anytime soon."
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