Mazda

New models of the Mazda veicles- the BT-50 4x4 and sedan- on display at Southern Sales showroom on Tragarete Road, Port of Spain, last week. —Photo: JERMAINE CRUICKSHANK

In 2020, 9,756 new cars were sold.

Of that amount, 6,702 were classified as passenger vehicles for private use, while 3,054 were for commercial use.

The most purchased vehicle was the Kia Sportage at 2,072 units.

Conversely, the least purchased was the two-door coupe, with just eight.

For commercial use, the most popular vehicle was a pick up 4x4 at 1,307 units.

New vehicle sales in 2020 were 27 per cent less than 2019, where the figure stood at 13,420.

According to president of the Automotive Dealers Association of Trinidad and Tobago (ADATT) Ryan Latchu, who is also president of Toyota T&T, new car sales have been flat from January to September 2021 when compared to the equivalent 2020.

“We basically sold 50 units fewer this year than the same period last year. And we were locked down for two months this year and two months last year, so we will call it flat,” he said.

“For the rest of 2021, the outlook is similar for 2020,” he said.

He observed that new car dealers face many challenges.

The first is foreign exchange.

“Since 2015, we have been challenged with forex and the Government’s focus has been on other industries as opposed to the automobile industry,” he said.

This was echoed by CEO of Southern Sales, Imtiaz Ahamad and Massy Motors senior vice president, Jean-Pierre Du Coudray.

However, Du Coudray said since Massy earns some foreign exchange from its other subsidiaries, it is not always at the mercy of the tight forex situation of the banks.

The impact of Covid-19 has been deep for the industry as it has affected assembly in Asia as well as created a shortage of semiconductor chips needed for new vehicles.

“That has hampered production and what it means is less sales,” Du Coudray said.

Then there’s freight costs.

He observed that thus far, freight costs have had minimal impact on the cost of cars, but he said it is still too early to tell what the final outcome would be next year.

And finally, he said, the economic landscape continues to be challenging for businesses.

Latchu said one metric used by ADATT for projected sales is usually energy prices.

“When the price of oil and gas are high, we generally find that we sell more vehicles,” he said.

Ahamad said because of the Covid-19 delays, there was now a waiting list for customers because of semiconductor chip issues as well as freight.

He said Covid-19 has impacted on assembly lines and while trade was rebounding, it has been harder to keep up with demand.

“In this regard, the automobile industry has been hit the hardest,” he said.

Towards electric

On October 4, in his 2022 Budget presentation, Finance Minister Colm Imbert said in keeping with the Government’s commitment to promote a green economy and reduce the country’s carbon footprint: “I propose to remove all custom duties, motor vehicle tax and value-added tax on the importation of battery-powered electric vehicles with an age limit on imported used battery powered electric vehicles of two years. This measure will take effect from January 1, 2022 and will be reviewed after two years.”

While the local automobile industry is widely receptive because of the positive impacts such policy decisions will have on the world because of climate change, they remain sceptical about the public buy-in because it would also mean a cultural shift for the country.

That cultural shift is two-fold—an understanding of the environmental impact of fuels and having to charge cars at stations rather than filling at pumps.

As it stands, there is already one company that brings in electric vehicles.

That’s Lifestyle Motors luxury brand, Porsche Taycan, which retails for over $1 million.

Thus far, six have been sold in T&T.

Latchu said there are brands in the market that offer electric, like Hyundai’s Kona (soon to be available commercially in T&T) and Massy recently introduced a brand MG, which also has an electric option.

“I expect that in the next five years, we will have 15 brands of hybrids in the market,” he said.

He observed this will be dictated by the policy direction of the brands that are distributed here.

On the question of hybrids, Ahamad said it will require some work.

“It is not a quick decision. You might want to but then you have dealerships to discuss with manufacturers and the process tends to be a bit drawn out. So you won’t immediately see success or a shift. But the Government’s policy is a good one for the country,” he said.

But try hybrid first

According to Du Coudray, the Government should have allowed the market to flirt with hybrids before going strictly to electric vehicles.

While he commended the over-arching goal of electric vehicles, which would augur well for the environment, he noted the market was only now getting into the hybrids.

Massy sells the Ioniq from Hyundai which comes in electric and hybrid versions.

Latchu said from January to September 2020, 333 units of hybrids were sold but for the same period in 2021, it was a mere 47 due to the removal of tax and duty concessions for the under 1600 cc category.

Du Coudray said the removal of the tax and duty hurt the market.

In his 2021 budget presentation in October 2020, Imbert had said tax concessions would be removed from the importation of private vehicles starting at the end of that month.

“At close to one million vehicles, there are simply too many cars on the road in Trinidad and Tobago today. As a country we spend $2.5 billion per year or US$400 million per year importing an average of 25,000 vehicles per year, at least two thirds of which leads to private motor cars.

“This has created a serious leakage of foreign exchange. We propose to remove all tax concessions on the importation of private motor cars. All private motor cars will now attract customs duty, motor vehicle tax and Value Added tax (VAT), with the lowest rates of duty and tax being imposed on hybrid cars, electric cars, CNG cars and small engine cars below 1500CCs to encourage low use.”

However, tax concessions would remain in place for commercial and industrial vehicles and on public transport vehicles.

Du Coudray told Express Business the hybrid market evaporated when it accounted for five per cent of Massy’s total sales.

“We would be selling 30-35 a month but when you have a 30 per cent increase in price, we went down to about two because once that price goes up, you have plenty of other options for the consumer,” he said. On electric vehicles, he observed, the average customer will not immediately want to go there in one step because it is a cultural shift and infrastructure has to be built out.

“That is why the hybrids made sense, as customers got the opportunity to feel it out and be more comfortable for when they want to make the jump. It is a transition to go from normal to electric overnight,” he said.

He observed that Barbados has built out its electric vehicle infrastructure competently but that T&T is now getting started.

“Not everyone is going to have an at-home charger so you are going to have enough spots to get charged,” he said.

But once, it’s feasible and there is demand, Massy will bring them in, he said.

When it comes to cost, for Du Coudray, economies of scale also have to be factored in—to bring in five is more expensive than 500 units.

He said Massy has been impacted in the short term by freight issues.

“At this point, it’s too early to tell how it will impact the cost of cars. As the months go by, we don’t have a choice but to pass on that cost to the consumer,” he said.

RECOMMENDED FOR YOU

MASSY Holdings CEO, Gervase Warner, yesterday confirmed that the group is scheduled to cross-list its shares on the Jamaica Stock Exchange (JSE) on January 27, 2022.

Massy published an abridged statement on the website of the JSE last Friday “in accordance with the listing requirements of the Jamaica Stock Exchange.”

In the abridged statement Massy describes itself as an investment management/holding company engaged in three main industry portfolios; integrated retail, motors & machines and gas products in Trinidad and Tobago and the wider Caribbean region.

THE COVID-19 pandemic led to a reduction of suspicious financial transactions as a result of a decline in reporting by regis­tered business, according to the 2021 report of the Financial Intel­ligence Unit of T&T (FIUTT), which was laid in Parliament last Friday.

There was an 88-per cent decline in the value of suspicious transactions—from $27 billion in 2020 to $3.1 billion in 2021.

GUYANA’S umbrella private sector body, the Private Sector Commission, (PSC) yesterday questioned the “legitimacy” of the Caricom Private Sector Organisation (CPSO) after a leaked document indicated that the regional private sector body had raised concerns regarding the recently approved Local Content Act in Guyana.

Stockbrokerage and securities dealer Barita Investments Ltd yesterday said it had successfully financed “a landmark transaction for Jamaica and Barita”.

Majority State-owned bank, First Citizens, is the second largest shareholder in Barita, through a wholly owned subsidiary, First Citizens Investment Services Ltd. FCIS holds 90,795,154 Barita shares, which were worth J$8.61 billion or US$56.29 million. First Citizens loaned Cornerstone Financial Holdings Ltd US$25 million in September 2020.