LOCAL used car dealers are complaining that an upsurge in international demand for pre-owned vehicles, especially in Russia, is driving them out of the business.

The local dealers tell Auto that dealers from the European country are aggressively purchasing used vehicles in the Japanese and other Asian markets, reducing the available stock and driving up prices.

“What is happening is that Russia has entered the market aggressively and anything that is two or three years old we cannot get,” former Jamaica Used Car Dealers Association (JUCDA) president, Kenneth Shaw said this week.

This development, they argue, is linked to the Government’s high duty regime, which makes them less competitive if vehicles are bought at the higher prices and imported here.

Shaw said that local dealers are at a distinct disadvantage as import duties on used cars in Russia are significantly less than Jamaica, giving the Russian dealers far greater bargaining power.

For years Jamaica and other lesser-developed countries led the purchase of used Japanese domestic vehicles, known here as ‘deportees’.

“Because of our high duty they (the Russians) are able to purchase at higher prices and they are pushing up the price,” Shaw complained.

“The Singapore market is now closed, we can’t get any vehicles from there,” he added.

Shaw said that the situation was compounded by the appreciation of the Japanese Yen further increasing car prices.

Present JUCDA president, Lynvalle Hamilton concurred that the demand in developed markets was seriously affecting local dealers in their quest for used vehicles.

“It’s not only Russia, other more developed countries are buying up used vehicles and we can’t compete because they have lower duty structures than Jamaica,” said Hamilton.

Marketing manager at Wheels and Wheels Auto, Connie Scarlett, while saying that she could not attribute the hike in prices and lack of availability to the Russians, admitted that there was growing difficulty in obtaining used vehicles.

“We don’t buy from Singapore anymore because of hiked up prices, and even in Japan, some of the vehicles we can’t buy because the price is so high,” she said.

An AP report yesterday said that Toyota Motor Corporation, recognising the huge and growing demand for cars in Russia, is set to boost auto production in the European country.

Toyota, the world’s biggest automaker, said its sales in Russia jumped 17 per cent year-on-year to 91,000 units in 2010.

In the meantime, Shaw, who operates KACS Auto on Dunrobin Avenue in Kingston, argued that along with a lowering of import duty, vehicles older than three years should be allowed into the country.

Jamaica has a three-year-old limit for import of used vehicles.

“If we don’t get an input from government in extending the years and reducing the duty significantly the industry will shut down,” Shaw declared.

According to Shaw, the Government’s current motor vehicle import policy was proving counter-productive, as given the lower number of cars entering the island, projected revenue was not being collected.

“They have to do something in relation to the age of the vehicles coming in as well as the high duties,” said Shaw. “With the reduction in imports they are not getting any duties anyway.”