NASSAU, BAHAMAS – Auto industry insiders are eyeing a possible decline in nearly 25,000 used Japanese vehicles imported into the country each year as new car imports are tailored to fit the more affordable 25 per cent tax rate.
Because of their more economical prices and engine size, anywhere from 15,000 to 25,000 used cars from the East Asian nation sail into The Bahamas annually, said former Bahamas Motor Dealer Association president Rick Lowe. But that number could take a hit in 2019 as an increasing amount of new cars make a comeback with 1.5-litre engines, allowing them entry at a lower price tag for many cash-strapped Bahamians.
“We will see a lot of the makes and models that The Bahamas is familiar with coming back,” said Lowe, who is also the Operations Manager at Nassau Motors.
“The Honda CRV and Honda Civic… all now come with a 1.5-litre engines, even turbo. It’s made pricing much better for the public and we should see more people turning back to new cars.”
Combined with reductions in excise tax from 55 to 25 per cent for imports of cars with a 1.5-litre engine or less, Lowe said it could take a brand new Honda CRV down from $43 million plus value-added tax to $33 million plus vat.
It could mean an increase in foot traffic at the annual auto show each year, centred on displaying all latest offerings in cars.
Lowe, like many other stakeholders in the industry, have watched the decline in new car sales over the years as an economic recession first sparked the move to smaller, used vehicles that were more affordable to a Bahamian population cautioned to tighten its purse strings.
“If public transport worked like it did in first world countries people wouldn’t need to buy transportation,” he added, “but if all you can afford is a three-thousand-dollar 10-year-old car then that’s that.”
Difficulty replacing hard-to-find parts for the cheaper Japanese used cars and expensive parts may also be a factor leading Bahamians to dump this trend, with auto dealers watching indicators like the success of the annual auto show for a sign of a turnaround in new car purchases.
Last month, the government signed a deal with EAA Company Ltd. to ensure that used vehicles being imported from Japan met local standards and were roadworthy.
Minister of Labour Dion Foulkes said Japanese vehicle imports declined in 2018 to just over 17,000 cars coming in that year.