The Tribune

• Not seen last year's sales 'for very long time'

• BMDA chief: 20-30% better if supply there

• Hopes 'achilles heel' eased; prices stabilise

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian new auto dealer yesterday voiced optimism that price stability and better availability will further boost sales in 2024 following a 40 percent year-over-year surge for the first 11 months last year.

Ben Albury, the Bahamas Motor Dealers Association's (BMDA) president, told Tribune Business the sector was "hoping the trend" from 2023 continues into the current year after it enjoyed "numbers we haven't seen for a very long time".

Estimating that his dealership, Bahamas Bus and Truck, would "easily" have sold 20-30 percent more vehicles last year had several of its more popular models been available, he said there were signs that the industry's supply chain "Achilles heel" may further ease in 2024.

And, with new and used vehicle prices having increased by between 15-20 percent locally since the COVID-19 pandemic, Mr Albury told this newspaper any signs of stability will provide a further much-needed boost for the market following its previous struggles in the aftermath of the 2008-2009 financial crisis.

While his dealership had not hit its December target, he added that all signs suggested 2003 was "much better than the year before" even though the final month's vehicle sale numbers have yet to be compiled. "We're actually quit a ways ahead of the year before even taking into consideration that we only have figures for the first 11 months," the BMDA chief said.

"Even up until the end of November, we far surpassed 2022. The numbers I'm seeing are the best pretty much since they started being recorded. We're about 40 percent up year-over-year for the first 11 months. I'm hoping that when we get the final figures in it will be much better.

"Some dealers are up more than others. It just depends on how the numbers are shared. I'm anxious to see what December brought. December was not a bad month for me, but it was not what I was expecting. It wasn't a bad month by any stretch, but I didn't hit the target I had set for myself," Mr Albury continued.

"December was not what I had anticipated, but I had been setting the bar so high because the rest of the year was so good. December has its challenges because of the holidays and people prioritising other things, which I understand. Hopefully sales come back to where they were."

As for 2024's prospects, Mr Albury said: "I have a very good feeling that it's going to be a very good year. I think that the trend that we're hoping will continue. I'm hoping vehicle prices start to stabilise some, and I'm also optimistic that the availability, which has been the Achilles heel for many of the members, will start to come in. I'm very optimistic.

"New and used vehicles, over the past four years, have probably gone up in price by 20 percent. Since COVID, we've probably had about a 15-20 percent increase in vehicle prices on average. The extent of it all depends on the model and the challenge in product. All that has been in play as a factor.

"Any kind of slowdown or easing in the US may free up some of the supply chain and give us access to inventory that we've been so desperately trying to acquire. Prices are still very high in the new car market. Both the costs of trying to acquire vehicle components and shipping costs have been astronomical. We've been hearing rumours shipping costs may come into line a bit more, so that's good news for us.

"You know me - I'm always optimistic otherwise I'd go crazy. In 2023 we saw numbers that we haven't seen in years, that we haven't seen in a very long time. I can tell you it's been many years. I can tell you it's been a long time."

Asserting that 2023 could have been even better for himself and other Bahamian new auto dealers, had an adequate supply of vehicles been available to meet the demand, Mr Albury said of his own company: "I know for myself I could probably have done 20-30 percent more in sales. Easily. I haven't had access to two of my best-sellers. They've basically got almost none....

"Sales are in momentum, and as long as we get the product and the product is available at a fair price I don't see anything that will pull us back. As long as the economy remains strong, tourism remains strong and foreign direct investment (FDI) is there, I think we're in a good position.

"There's nothing that I can put a finger on that would slow us down. We hear this is in line, that is in line. We have to see what the year brings. I think we've done a good job in attracting the right type of investors. People with projects on the table have depth and are able to push through," he added.

"I know there's a lot of development going on, a lot of projects coming online, so that will help to boost things. The tourism industry is very robust, and that is what we need to keep money moving around."

Mr Albury and the BMDA had previously warned that the requirement for all firms with annual turnovers of $5m and above to submit full audited financial statements to validate their Business Licence filings would be “cost prohibitive” for auto dealers given their status as high turnover, low margin businesses due to the existence of price controls.

It’s cost prohibitive,” he told Tribune Business at the time, pointing to the expense associated with undergoing a full audit. “It’s far-reaching in our opinion, and I guess in a lot of the opinions being expressed elsewhere. We have sent a letter to the Government requesting we have some consultation to discuss it.

“It’s going to put a big expense on us, especially at this time when we’re trying to regain our footing after COVID and supply shortages. We’re also dealing with price controls. We cannot pass the increase associated with these additional accounting fees on to the consumer, which means we have to absorb them along with a lot of other cost increases when it comes to doing business.”

Pointing out that price controls force Bahamian auto dealers to “work on very slim profit margins”, Mr Albury said just two BMDA members’ have financial year-ends on December 31. All other dealers are “spread out throughout the year”, which he added would result in additional Business Licence-related audit costs, although Mr Wilson yesterday stressed this issue has been addressed with BICA.

The BMDA president, though, argued that the Department of Inland Revenue’s ability to conduct audit inspections of companies suspected of evading or under-reporting taxes, as well as the more robust sanctions regime contained in the Business Licence Act, should provide sufficient deterrent to potential wrongdoers and make a full audit - especially when the fee is based solely on turnover - unnecessary.