The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Bahamas Motor Dealers Association’s (BMDA) president yesterday said a recent “30 percent dip” in his firm’s used vehicle sales is no cause for alarm amid plans to close 2024 “with a bang”.

Ben Albury, also Bahamas Bus and Truck’s general manager, told Tribune Business that the drop in his dealership’s pre-owned vehicle sales over the past two months is “where we expect it to be at this time of year” as potential buyers switch their priorities to financing back-to-school as tourism enters its slower season.

Voicing optimism that the annual Auto Show at the Mall at Marathon, scheduled for October 18-19, will generate renewed consumer demand through the remainder of 2024, he added that industry-wide new car sales remain “definitely ahead of last year” with the latest figures set to be produced imminently.

However, Mr Albury told this newspaper that a ever-escalating costs - including “outrageous” shipping fees and “probably a 30 percent increase” in energy costs under Bahamas Power & Light’s (BPL) new rate structure - have resulted in his company’s profitability “taking a hit”. He added that the auto industry typically “rides the roller coaster” of economic growth and contractions, and described the perception that “we print money” as a myth, with dealers always wary to ensure they “save for a rainy day”.

Describing the sector’s new vehicle sales as “stable”, Mr Albury told Tribune Business: “The last two months I’ve noticed personally that things have dropped a bit only on the pre-owned vehicles, not the new ones. I’ve seen probably a 30 percent drop.

“The only thing I can put it to is back to school, priorities have shifted, but people buying new cars are not affected as they plan their purchases over a longer period of time. From what I understand, the [pre-owned vehicle] imports at the port are still running very strongly.”

The BMDA chief added that the upcoming US presidential election in November, and the uncertainty surrounding the outcome, often results in a slowdown in economic activity while, in The Bahamas, “this is a slow time for tourism especially in the Family Islands.

“A number of hotels are closed or running low occupancies,” Mr Albury added, “and hotels here are also showing lower occupancies with people going back-to-school. There is nothing causing me concern yet because it’s basically where I expect to be at this time of year.”

With the auto industry’s post-COVID supply chain backlogs having eased, apart from occasional delays in obtaining certain parts, the Bahamas Bus and Truck chief added: “It definitely makes a hug difference. Customers don’t have to lose preference waiting on what they want. They feel they have a better chance of getting the vehicle they want rather than having to settle for something not in their mind.

“I intend to go out with a bang for 2024, especially with our big industry auto show, which was really productive last year as the first one since COVID. We’re looking forward to a very big show this year. I’m optimistic things are stable and going to continue strong. I know the last time I looked at the numbers things were still on a steady trajectory.

“I think the demand is there. We just need tourism to pick back up, it’s the season we live in, and keep rolling. I see a lot of activity on the construction and commercial vehicles. That’s always, to me, a very important factor. They’re very strong, very strong. There’s a lot of demand, a lot of people looking, a lot of inquiries, and a lot of those are turning into sales.”

While optimistic that the industry’s new vehicle sales will exceed 2024 levels, Mr Albury nevertheless identified several factors that are dampening the sector’s financial performance. “Shipping costs are still outrageous,” he confirmed. “I see fuel prices are dropping in the US so hopefully that may help things.

“I don’t have the statistics in front of me, but I just saw container costs go up again. It’s definitely not easing up there. It has a big impact because everything, it just adds up and catches up, especially when you have compound duty and mark-ups and everything else.”

These cost increases, together with higher Business Licence and related audit fees plus rising electricity costs, are eroding profits for Mr Albury, auto dealers and other businesses. “Profits have taken a hit with the increased cost of doing business - electricity and a lot of other factors. I’ve definitely noticed that on the bottom line,” he told Tribune Business.

“There’s definitely a lot more expenses - Business Licence, audit fees, BPL. All those things are definitely making profits taking a hit. I’d say there was probably a 30 percent increase in the electricity bill. When you have the square footage we do, lights and the computers we do, that’s a major, major factor. I’m looking forward to this reduction I’m hearing about come online soon. I’m anxiously waiting for that.”

Still, Mr Albury said his future outlook for the auto industry and wider economy remains positive. “Our population is growing, our economy is growing,” he added. “A lot of development is going on so there’s a lot of high optimism and we could use it.

“We ride the roller coaster. People think we print money. That’s not the case. We go through rough years, we ride those out. We wait for these upturns and we hope they stay around and last long enough. You’ve got to save for a rainy day and position your business so you are prepared for those things.”