The Tribune

• Down just one unit on February comparison

• But ‘touch and go’ over product shortages

• Dealer voices concern on credit card use

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Auto dealers yesterday said new vehicles sales for early 2021 have been “20 percent stronger than projected” while warning that potential product shortages await in early summer.

Fred Albury, the Bahamas Motor Dealers Association’s (BMDA) president, told Tribune Business that the industry had managed to hold fairly well against early 2020 comparatives with collective sales down just 21 vehicles for January and February combined.

Those were the two months immediately prior to the COVID-19 lockdown that began in late March, and BMDA data provided to this newspaper showed that the sector’s new car sales for February 2021 were just one off the prior year, standing at 126 units compared to 127 for last year.

But, while acknowledging that “the light is at the end of the tunnel” with the arrival of COVID-19 vaccines, Fred Albury warned that supply chain disruption meant he and other dealers likely faced a “touch and go” summer in terms of having sufficient product on-island to meet customer demand.

While 2021 is projected to be better than the lockdown-hit 2029, he added that new vehicle sales were unlikely to recover to 2019 levels until next year.

“Our sales are stronger than what I anticipated they would have been, especially on the high-end product,” Fred Albury told this newspaper of the industry’s collective performance for 2021 to-date. “I would say they’re probably 20 percent stronger than projected.

“I think it’s a little too early in the year to forecast anything, but I know there are going to be some issues with supply chains being broken. There’s going to be some issues getting product, and because most dealers fell on the side of caution and did not order much product, by the middle of the year it’s going to be touch and go having product for sale.

“For our group of companies [Auto Mall] it’s going to be somewhat of an issue out there. I don’t know how much it’s going to impact any of the other dealers, but I suspect they also fell on the side of caution and decided not to get into an over-stocked position.”

Fred Albury said microchips, a key component in the latest vehicle models, were now in short supply due to a fire at the factory that produced them. This, he added, will likely worsen supply chain backlogs facing dealers in The Bahamas and elsewhere.

“That will probably impact sales by May, June, July,” he disclosed to Tribune Business. “There are some units I need right now for a big customer and I just can’t get them because they’re not available because of the micro chip side.

“The first half of the year is going to be touch and go. Some product is coming out of Indonesia and India, and the lead time from ordering to receiving is five to six months. The second half of the year, if things continue to open up, the cruise ships come back and the hotels get up and going, should definitely improve over last year if we don’t have any more lockdowns.

“The light is at the end of the tunnel out there. My gut feeling is by June people will have taken their vaccine, and provided nothing else jumps out at us, I think we’ll start to see some sort of normalcy coming back into our lives. This has been a warning shot across the bows of the world that something like this could happen, and bring the world economy to its knees without a bullet being fired.”

However one auto dealer, speaking on condition of anonymity, told this newspaper they were disturbed by a growing trend of customers increasingly turning to credit cards to pay for vehicle service and parts as opposed to cash.

Suggesting that credit card purchases had increased anywhere from 20-50 percent over the past several months, they said: “We’re finding that the business by credit card is growing hand over fist. Very few people are paying cash. I don’t know if that means they’re using their credit cards to get points. I don’t know if that means they’re pushing up debt.

“We’ve noticed that for the last several months. I would say it’s a least a 20-30 percent, maybe even a 50 percent, increase. It’s gone up a hell of a lot. It is a lot of money on cards. Whether that’ll continue or not I don’t know.”

Ben Albury, Bahamas Bus and Truck’s general manager, told Tribune Business he is facing the same challenges as his Auto Mall namesake. “I’m getting a lot of interest in high-end product, not as much in the low-end, and commercial and construction vehicles are doing pretty well,” he said.

“The main challenge I’m having right now is all my suppliers are having difficulty getting inventory to me in a timely manner. COVID-19, the microchip processor components, there’s a lot of logistical issues but I could do even more than what I’m doing now if I had easier access to product....

“My vehicle manufacturers are telling me to expect an additional two-month delay on top of the usual lead times. Some are four months, others are six months, and all are citing additional delays. It is long now,” Ben Albury added.

“I’ve been begging suppliers to send product from other regions and stuff that may be allocated to other dealers who want to give it up, but the type of product I want is in demand in other places. Talking to other dealers that’s what they are experiencing as well.”

Still, Mr Albury admitted he had been “pleasantly surprised” by new vehicle sales for 2021 to-date, and voiced optimism that the economy will continue to gradually strengthen throughout 2021 as the tourism industry continues to open up.