Auto dealers hope for 2012 recovery
At least one auto dealer in the country is “hopeful” for a steady recovery in the sector in 2012, admitting that no real growth occurred in 2011.
General Manager for Nassau Motor Company Rick Lowe said that past estimates that the Bahamas Motor Dealers Association (BDMA) has lost $75 million collectively between 2009 and 2011 are “not too off the mark”, adding that a decrease in inventory resulted in a drop-off in profits.
“It’s difficult to say if you’re assuming the average price of a car is $25,000… I think 2007 was a big year for everybody where their inventory was [54 percent higher],” he said. “And if you’re down [from that], then it’s a big difference.”
The challenges experienced in the industry worked against the dealers in the sector, most notably the Japanese tsunami that occurred earlier in the year. Although the country is thousands of miles away, it affected vehicle imports into The Bahamas as manufacturers in the Asian nation were not in operation during the natural disaster.
Lowe added that the after effects of the tsunami are well behind them and should be able to get inventory back on track as a whole.
“The tsunami impacted everybody quite honestly; most of the manufacturers were impacted by that,” he said. “Production is back to normal at least from Honda and Toyota’s perspective so we should be hitting the ground running next year as far as inventory is concerned.”
Lowe mentioned that commercial vehicle sales were down 11 percent year-on-year based on figures at the end of October and SUVs were still the more popular choice among consumers. He admitted that the transition to the revised vehicle duty rates made in 2010 were a tough pill to swallow for the dealers and customers.
“The consumer still took a shot, particularly on commercial vehicles,” Lowe said. “We don’t have a choice but to adjust, and the impact has been felt across the board.”
The Nassau Motor Company executive added that 2011 turned out to be rougher than expected, and an improving economy in 2012 on the local and global front – along with other factors – will play a part in how successful the sector will be going forward.
“[The sector’s growth] all depends on what elections bring here and what elections bring in the U.S., we’re not isolated from what’s going on in the rest of the world,” Lowe said. “How the economy improves next year is also key to our growth, and we are hopeful that it recovers.”
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