As automobile sales contract, president of the Jamaica Used Car Dealers Association (JUCDA), Lynvalle Hamilton says that 25 dealers have dropped out of the market reeling from the falloff over the past two years.

And according to Hamilton, of the 70 dealers that remain in his association 15 of them are now seriously contemplating closing their doors.

Included in the list of auto dealers that have pulled their shutters is the once popular Fortune Corporation, Nippoline and Autopal.

“What is happening is that the policy that the government has as it relates to duty and importation it is quite stringent,” Hamilton contended.

The JUCDA president is at odds with the taxes charged by government, which go as high as 180 per cent, as well as the maximum three-year-old vehicles that are allowed into the island.

Hamilton argued that as a result of government’s actions car prices were rapidly going beyond the capacity of consumers to finance purchases killing the automobile industry in the process.

“People are unable to pay their bank loans and it makes it difficult for everybody to survive,” said Hamilton, who added that motor vehicle prices have increased between 30 per cent to 60 per cent over the last two years.

“It all depends on the type of vehicles,” he said. “Some SUVs which we could have sold for about $2.1 million are now at $3.5 million, we dare not try to bring in those type of vehicle now.”

Admitting that the price increase was not due solely to government policy, Hamilton however argued that the administration was in fact compounding the problem.

The strengthening of the yen against the US dollar has pushed up car prices internationally, and according to Hamilton developed countries were now competing for used vehicles in the Japanese market furthering the escalation.

“There is nothing we can do about the movement of the yen against the US dollar and there is nothing we can do about the developed countries purchasing used cars,” Hamilton argued.

“But all the other countries have lower import duties than us,” he contended.

“The only way out is for our government to reduce duty and allow older cars to be imported.”

The used car dealer insisted that Government’s apparent unwillingness to make the necessary adjustment was causing the problem.

Considering what is happening on the world market they should try to cushion the impact,” said Hamilton. “Our government has the power to make the adjustment.

Recently appointed president of the JKA and used car dealer Andrew Jackson concurred with Hamilton’s position.

“Things are very, very slow over, the past year, business have fallen off by about fifty per cent,” he told Auto. “Business is cut in half.”

He agreed that sourcing used vehicle had become far more difficult on the world market as the yen strengthened.

Jackson argued that the strong yen against the US dollar placed the affordability of vehicles out of the reach of local consumers who had to face the added burden of exorbitant taxes.

“Every time there is an increase in the [international] purchase price of a vehicle there is a corresponding increase in duties,” he said.

“Both ourselves and the new car dealers are feeling it,” Jackson added.

Late last year chairman of the Automobile Dealers Association Kent LaCroix commenting on the onerous duties charged by government said that at just over 3,000 new cars were sold in 2010, a relatively flat performance in comparison to 2009.