DESPITE continuous decline in motor vehicle sales and constant complains from the automotive sector about extremely high duties and stringent policy, Government has declared that it is not prepared at this time to lower tariffs.

Some 8,000 used cars were imported into Jamaica last year which was half the 15,932 imported in 2008 with a 65 per cent decline in sales.

However, permanent secretary in the Ministry of Industry, Investment and Commerce Dr Reginald Budhan, last week told members of the Automobile Dealers Association (ADA) and the Jamaica Used Car Dealers Association (JUCDA) that the Automobile Import Policy which governs the automotive industry was now being reviewed but would not address the duty structure.

“This policy is not going to deal with the issue of the duty structure, taxes are generally dealt with by the ministry of finance and that will be dealt with by the finance minister at whatever time that might be,” Dr Budhan said. “That is not on the agenda at this time and not up for discussion.”

Dr Budhan was responding to several complaints regarding the effects of “extortion type duties” on the car industry and passionate appeals for the duties to be lowered during a forum, hosted by Auto Lifestyle Jamaica at Knutsford Court Hotel in Kingston to discuss the future of the automotive industry.

Dr Budhan, who apologised for the absence of Ministry of Industry, Investment and Commerce, Karl Samdua, said the ministry is now in the process of preparing a draft of the reviewed policy to submit to Cabinet.

Issues addressed in the policy include, import license requirements and documentation, motor vehicle year requirements, warranty, importation of classic and limited edition cars, importation of damaged vehicles, importation of vehicles by companies, disposal of vehicles and license requirement for trucks and heavy duty equipment.

Before Dr Budhan took the floor, ADA’s chairman Kent LaCroix and JUCDA president Lynvalle Hamilton, both blamed Government for the problems affecting the automotive industry and made passionate appeals for the Government to answer their cries.

Said Hamilton: “With many struggles we have been living up to the reason for our existence well over the years, but ever since the introduction of high duties and stringent Motor Vehicle Importation Policy, living up to our expectation have become quite challenging and even more challenging due to the recession.”

“Notwithstanding the recession the JUCDA just cannot lay the blame for the challenge we face on any other entity than the government,” he added.

Hamilton noted that at present the association was being challenged in its efforts to secure three-year-old cars as Japan has started to hold those for longer periods and the Yen has begun to strengthen against the US dollar, resulting in cars becoming more expensive.

In addition Hamilton argued that developed countries with lower import duties were now paying the higher prices for used cars.

Citing examples of increases, he said two of the more popular cars — the 2007 Nissan Tiida and the Toyota Corolla — up to five months ago were being purchased for US$7500 and US$9000 respectively but have jumped to US$9700 and US$14000 today.

For an individual to take out a car loan on the Nissan Tiida, that person would have to be earning $80,000 monthly while the other car requires a monthly salary of $200,000, Hamilton asserted.

On the issue of the policy Hamilton said Jamaica was the only country in the Caribbean region that had a three-year motor vehicle import restriction (MVIP) and called on Government to increase the MVIP to seven years for cars and 10 years for pick-up trucks.

He also reiterated the call for a 10 per cent reduction on duties.

“The reality is if the current situation does not change within another four to five months without government making the necessary adjustments. I certainly cannot see bright future for the industry and I am absolutely sure that many dealers will have to fold,” he said.

LaCroix for his part also complained about the high duties and the high interest rates that banks charge on car loans along with the bureaucracy that exist in clearing vehicles.

“The cars industry needs a boost,” he declared. “Lower taxation will encourage efficient movement of goods and services, leading to a stimulation of the productive sector and increased job creation.”

However, LaCroix accused this and previous governments of lacking the courage to do what needs to be done. “Someone needs to find the courage to make the changes,” he said.