Lynvalle Hamilton, president of the Jamaica Used Car Dealers Association (JUCDA), says many businesses are likely to fold within the next four to five months unless the Government moves quickly to reduce duties on used cars and extend the three-year limit for motor vehicle imports to seven.

Hamilton, who is the managing director of Auto Channel, told the Sunday Observer that dealers had experienced a drastic fall in sales, due in part to high import duties, government policies, the strengthening of the Yen and international competition, which has been driving up prices for used cars on the world market.

“Our members are crying,” Hamilton said. “Members cry every day, and they are hoping that the Government will do something as they think that the Government is very, very insensitive. In fact, a lot of them are considering right now to close their doors, and a few have done so over the past month.”

He declined to provide figures or name those companies that had closed in recent months.

He said, however, that over the past two years more than 50 per cent of dealers had gone out of business.

“What you will find,” he explained, “is that although you have some coming out, you have others coming in to try in business.”

The association currently has more than 60 members, but there are more than 100 certified dealers on the Trade Board’s records.

“What you find is that you have a lot of dealers that are certified but they may not be operating because of the economic environment, but they still keep their certification with the hope that things will get better,” Hamilton said.

In January this year, the then JUCDA president, Ian Lyn, told the Observer that the industry had seen an “approximately 65 per cent decline in business, with 41 dealers closing their doors over the past year”.

Like president Hamilton, and Lyn before him, Christine Lee, the JUCDA’s treasurer, is also concerned about the state of the industry.

“A lot of people have been dropping out or are thinking of dropping out because, as you know, the price of the cars have been rising greatly,” Lee said.

She said that at least two dealerships were forced to close in October, but declined to give their names.

“A lot of people not selling enough vehicles to cover the expenses, and it is getting more and more difficult to sell vehicles now. There are times when we even have to sell the vehicles at cost; no joke,” Lee told the Sunday Observer. Besides, she continued, “people’s income not increasing, so you can’t just say, OK, because the price increasing I’ll just price it for more. It’s just not working.”

Hamilton agreed, noting, for example, that the cost of a Nissan Tiida, one of the “more reasonably priced sedans”, had increased by nearly 30 per cent over a four-month period.

Dealers could previously acquire this particular make for about US$7,500 CIF (Cost Insurance and Freight), but now the vehicle was fetching about $9,700, Hamilton said.

“If you (consumer) should attempt to go to the bank for a loan to purchase this car, that car would land you at about $1.75 million, and that’s just the normal three-year-old sedan. If you should go into the bank to try and get a loan, you would have to be earning as much as $80,000 net. The average Jamaican can’t afford that; most of the working population can’t,” he said, adding that “this is the same for most of the cars in Japan that we import, and we have been crying to the Government.”

He added: “For quite a while now we have been lobbying the Government to relax its importation policy as this would allow persons to get the cars cheaper, and in our view they have been very insensitive.”

The Motor Vehicle Import Policy is presently being reviewed, and is expected to go before Cabinet shortly.

The JUCDA has also been lobbying the Government to lower import duties.

“The Government, we believe, can reduce duties, and I believe that they should because it is killing the industry. I believe that the overall duties should be reduced by at least a 10 per cent,” Hamilton said.

“Right now, we are faced with a situation wherein, if this situation continues for another four to five months and the Government does nothing about it, or doesn’t answer our cries, what will happen is that you will find that many of the dealers will have to fold their businesses,” the JUCDA president said.

According to Hamilton, “our cries are not really our cries, it’s the cry of the people.”

Everyday, he said, “customers come to our lots and they cry, ‘why are cars so expensive’? What we would like the public to know is that when they come on our lots and they find that the cars are expensive, it is not us, it is Government policy that it causing all of this.”

Added Hamilton: “Sometimes I think that they (Government) are looking at the used car industry and not the bigger picture. It is the people who are asking for this, not just us. And what the Government needs to understand is that the survival of the used car industry supports the survival of many Jamaicans in this country… the survival of many Jamaicans who depend on the used car industry.”