The Tribune

* Drop-off greater than 38% year-to-date fall

* But not as steep as 2008's 60% decline

* Mergers, lay-offs and/or closures may result

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Auto dealers yesterday warned they "cannot remain afloat" if the 2020 third quarter's 47.37 percent industry-wide decline in new auto sales persists.

Data obtained from the Bahamas Motor Dealers Association (BMDA) revealed that the drop-off for the three months to end-September was greater than the 38.29 percent decline recorded for the year-to-date, as it included an August when the industry was largely shut down due to COVID-19 restrictions.;

Rick Lowe, the BMDA's secretary, told Tribune Business that while some dealers were able to complete August sales to government entities such as the COVID-19 enforcement unit, the ongoing lockdowns, curfews and restrictions were continuing to create uncertainty and undermine what little confidence remains.

"It's certainly a major impact," he said of the Government's present measures. "We cannot continue to stay afloat with these sorts of declines. We need some sort of resurgence to pull back even. We cannot keep paying out and nothing's coming back."

While the COVID-19 fall-off in new car sales was "not quite" as steep as the 60 percent drop that the industry experienced in 2008, when it was hit by the global financial crisis and subsequent recession, the latter decline came following a record year in 2007.

Most auto dealers have been effectively treading water ever since, and Mr Lowe said of the pandemic's impact: "It's quite disconcerting. If this goes on much longer you might see amalgamations, closures and lay-offs. There's any number of bad scenarios.

"We just have to hope the economy ramps back up, but there's a lot of people hurting, and a lot of people that are unemployed. It's a lot, a lot. We're in a quandry as to when we order, what we order. When you have a seven-month order cycle it's pretty precarious. We order five to seven months before the vehicles arrive, and you're sitting on inventory that's moving very slowly.

"How do you figure that out? The old model of you've sold two a month last year, so we'll sell two per month this year, that ain't happening. Curb-side for sales isn't bad because the customer doesn't have to go into the office, but parts has been impacted pretty drastically and service is more of an inconvenience.

"Customers have to sit outside under an awning and pay through the window. It's an inconvenience for the customer and is not a good way to do business."

Still, the 2020 third quarter sales declined was less than the industry-wide 55.5 percent drop-off suffered in the second quarter when COVID restrictions were at their peak.

New vehicle sales were then down by more than 200 units year-over-year against 2019 second quarter comparisons. Sales were 177 units for the second quarter as opposed to 398 in the second quarter for 2019.