30% of used-car dealers may not open on Monday

ALTHOUGH Government has given car dealerships – both new and used – the green light to reopen their businesses on Monday, president of the Used Car Dealers Association Visham Babwah said at least 30 per cent of his members may not be able to do so.

Babwah attributed this to tough government policies which went into effect in January, the continuing shortage of foreign exchange and the death of some of his members from covid19.

“We are happy, but we still have a lot of serious challenges that we think the Government should review,” he told Newsday on Sunday.

He identified the changes to be reviewed with regard to the policy to regulate the foreign used car industry: the reduction of its quota by 30 per cent; the reduction in the age of vehicles to be imported; and reinstatement of taxes on hybrid and electric vehicles, which his association had been lobbying for since 2010.

“They made some changes in the budget last year, which took effect on January 1, such as the change in the permissible age of importation from four to three years. They also reinstated all the taxes on hybrid and electric vehicles and they reduced the taxes on non-hybrid vehicles under 1600 cc."

He said the reinstatement of taxes makes importing hybrid and electric vehicles much more expensive than non-hybrid vehicles.

“People would no longer be able to afford these vehicles. Because of the prohibitive cost, dealers will not bring in these vehicles, thus denying Government the ability to collect revenue.”

In calling for a review of the policies, Babwah said the 30 per cent reduction in quota would also make it difficult for some dealers, who import 15-20 cars, to continue the trade.

“That would equal to selling one car per month.”

Babwah said from a preliminary assessment, some dealers who have stock-in-hand may just sell it and close up shop.

He said within the next two weeks he would have a more accurate figure on who will close and who will be able to sustain their businesses.