Foreign Used Car Dealers in for a Bumpy Ride
On Thursday January 14, the Revised Policy on the Foreign Used Car Industry in Trinidad and Tobago was approved. Senator the Honourable Paula Gopee-Scoon, Minister of Trade and Industry hosted a Media Conference at the Ministry’s Port of Spain Head Office on Friday 15th January, 2016 to share the details, which are as follows:
1. the age limit of gasoline powered foreign used cars which are allowed for importation be revised to four (4) years from the existing six (6) years with immediate effect;
2. the current age limit of three (3) years for diesel powered cars and four (4) years for CNG powered cars which are allowed for importation be maintained;
3. individuals be allowed to import foreign used right-hand drive cars for personal use once every four (4) years instead of once every three (3) years. The age limit of such cars imported for personal use will now also be four (4) years;
4. the Ministry of Trade and Industry will temporarily suspend the application process for any new person or business seeking to register as a Foreign Used Car Dealer at the Trade Licence Unit (TLU) as at Thursday 14th January 2016.
In addition to this, a comprehensive review and audit of the existing Policy and Procedures to Regulate the Right-Hand Drive Foreign Used Car Industry in Trinidad and Tobago will be undertaken. This review is expected to be completed by 31 March 2016, and submitted to Cabinet so that a revised Policy for the period 2016-2020 can then be made.
While the Ministry acknowledges the positive contributions of this industry, the rationale for the immediate adjustments are given as follows:
1. The increase in traffic congestion on the nation’s roadways;
2. Foreign exchange leakages as the Foreign Used Car Industry is comprised of net importers;
3. Safety and environmental protection considerations for the citizens and the environment.
4. Irregularities associated with the operation of the Foreign Used Car Industry in Trinidad and Tobago.
However, these changes did not sit well with the President of the TT Automotive Dealers Association (TTADA), Visham Babwah. He sees the reduction of the age limit on gasoline vehicles from 6 years to 4 years as a death blow to the Foreign Used Car Dealers. He is of the opinion that the government is implementing this measure in order to protect the interests of the New Car Dealers. Babwah further indicated that back in 2008, when this same measure was introduced, it caused over 200 dealers to go out of business, and out of a quota of 13,500 vehicles only 5,000 were imported. “This decision would affect the lives of middle and lower- income citizens, so it shows they (Cabinet) don’t care about the citizens of this country,” Babwah claimed.
The Vice-President of TTADA, Rhondall Feeles, echoed the negative effect that the reduced age-limit would have on future sales. He stated, “Back in 2008, a Tiida cost TT $100,000 (when) we had to buy vehicles in the four year- old bracket. Now it’s about $75,000 so it makes no sense for us as businessmen to invest, and then you can’t sell anything. We’re going to have to send home workers because nobody paying $100,000 for a Tiida now.”
Having heard both sides, let us now examine the reasons for the adjustments:
(1) Congestion and Traffic on the Roadways
The number of imported used vehicles is limited to 13,500 per year, of this amount about 9,000 are actually imported. If this was really a big concern, how is it that there are no limits on the annual importation of new vehicles? Is it that new vehicles take up less space or don’t cause traffic?
(2) Foreign Exchange Leakage
Vehicles are not manufactured in T&T, well at least not anymore. Therefore the importation of all vehicles will use up foreign exchange. However, a new vehicle will require more than a used vehicle. The nation can actually save huge amounts of foreign exchange, if the residents are encouraged to purchase used vehicles as opposed to new vehicles. But why is this not being done if foreign exchange leakage is such a great concern?
(3) Safety and environmental protection considerations
So here is the question, is a 4 year old vehicle so much more safer than a 6 year old vehicle? If this is indeed the case, simple beef up the inspections of these vehicles before they are licensed. End of story.
(4) Irregularities associated with the operation of the Foreign Used Car Industry
Someone just cannot take up a car and walk away with it in his back pocket. Irregularities simply means that the “officials” may be taking bribes or breaking down the system themselves. The Used Car Dealers cannot be blamed for this, the government needs to put its house in order.
It appears that the reasons put forward, defies logic and good business sense. It may very well be that the interests of the new car dealers are being unfairly protected as the economy continues to shrink. At this point I would just like to remind those in high office of a portion of the oath taken:
To discharge their duties “without fear or favour, affection or ill-will”
Were they really serious when they took this oath? You be the judge.