Automotive dealers: Industry has been pushed backwards

PRESIDENT of the TT Automotive Dealers Association Visham Babwah said the removal of tax concessions on the importation of private vehicles has pushed the automotive industry backwards.

Babwah said he sees a serious fallout from these measures, warning that vehicle prices will escalate while hundreds of businesses will shut down.

In his presentation of the fiscal package for 2020/2021, Finance Minister Colm Imbert said there were too many cars on the road, which called for a rationalisation of the new- and used-car markets.

He said the annual importation of about 250,000 private vehicles was causing a serious leakage of foreign exchange to the tune of some US$400 million.

“To correct this unsustainable situation and suppress demand, I propose to remove all tax concessions on the importation of private motor cars.”

Concessions will remain in place for commercial, industrial and public transport vehicles.

These measures will go into effect from October 20.

From January 2021, the permissible age of imported foreign used cars will be reduced from four to three years along with a reduction in the importation quota by 30 per cent.

“This finance minister is not really thinking about the effect of this. We are still in a pandemic. The car dealers are suffering. We have suffered low sales, and now he is going to create a lot of unemployment when government should be focused on keeping businesses up and running. Hundreds of businesses are going to be shut down overnight because of this,” Babwah said.

“Since this government took office in 2015 it would appear as though they have a mandate to destroy the foreign-used industry in TT and make room for the conglomerate.

“At the beginning of 2016 they moved the permissible age from six years to four years and that was a hard blow to us. Then the hybrid taxes were removed.”

He explained that used car dealers invested heavily in training technicians to repair and service hybrid vehicles because the new-car dealers were not importing them. Babwah said now they have developed a market for the hybrid, "government has decided to come and put a final nail in our coffins.”

He predicted that a small car like the Aqua could see an increase from $75,000 to over $100,000.

Many people, he said, depend on this industry for their livelihood, "like the person who instals alarms, the GPS systems, the electricians, air conditioning technicians, mechanics, the guy who installs the sound systems – they all depend on us, so there is going to be serious fallout.”

Babwah said not only the foreign-used-car dealers are burning up foreign exchange, but so too  new car dealers.

“We have a quota. We cannot go beyond our quota, but the new car dealers have no quota.”

He called for a quota for the franchise owners, as enunciated by Imbert, to beimplemented soon and in an equitable manner.

“By delaying that announcement of quotas for them, that shows a clear bias.”

Babwah said while it is a very difficult time for the country, government did not have to introduce all the taxes at once.