More fuel efficient vehicles at Worldtron Limited are selling well.
Susan Smith, Staff Reporter
JAMAICANS REGISTERED fewer than half the vehicles in 2004 than they did in 2003, according to data from the Inland Revenue Department.
The department registered 31,540 motor vehicles across the island in year 2003, while 13,727 were registered for year 2004.
"We normally treat the number of vehicles registered on the assumption that they are purchased," explained Kensley Graham, information technology manager for the Inland Revenue Department in Kingston. Their assumption is thus that 56 per cent fewer vehicles were sold in 2004 than in 2003.
Similarly, information from the Trade Board Limited also reveals that the number of applications for import licences on new vehicles last year declined by 34 per cent, compared with the year before. President of the Jamaica Used Cars Association, Kenneth Shaw confirms that there has been a fall in motor car sales.
FUEL-EFFICIENT VEHICLES
"The average consumer was forced to spend more money for a vehicle as the newer ones, three years and up are far more expensive," Mr. Shaw said. In mid-2003, the Minister of Science, Commerce and Technology, Phillip Paulwell increased the import duties on motor vehicles to the range of 94 per cent to 180 per cent according to the cc ratings.
A year later, the ministry imposed restrictions on imported motor vehicles less than three years old and revised the policy to restrict damaged vehicle from entering the island. President of Worldtron Limited, Dwight Moore says his company saw an increase in sales from the more fuel-efficient vehicles. But overall business has been affected by the depreciation of the U.S. dollar against the Euro, increases in shipping costs and by the Government's new duty regime.
The Jamaican currency is linked in value to the U.S. currency, so its depreciation against the Euro would also have resulted in a fall in the value of the Jamaican currency against the Euro. "There has been a decline in the quantity and quality of cars on the market because of the duty regime," Mr. Moore said.
"Since the Government increased duties on motor vehicles and reduced the age of the cars imported, the inventories of new car dealers have been stagnant until now." A new Cadillac Escalade selling for $4 million in 2003 would have increased to $7 million immediately after the duty change was introduced, Mr. Moore said.
"The duty regime with the special GCT has just compounded the problem of devaluation," said Wayne Miller, sales and marketing manager of Sterling Motors Limited. He agreed that the appreciation of the Euro had impacted on prices of his products and ultimately on sales.
"The cost of one of our 3 series (BMW) cars is US$25,000 in the United States but based on the 94 per cent GCT charged by the government it is US$50,000 in Jamaica for GCT alone," explained the marketing manager. "The value of our currency has just made things worse." Mr. Shaw said the US dollar depreciated against the Japanese yen by some 20 per cent during year 2004. This impacted on the price of vehicles from that destination.
The prospects for the automobile industry for year 2005 are good, Mr. Shaw said, although he observes "the year has started off slowly." One positive development is that consumers are faced with the option of getting lower priced Chinese made cars being imported by China Motors.
