Car dealers predict market fallout as imports dwindle

The Jamaica Used Car Dealers Association (JUCDA) says the vehicle inspection regime now in play is expected to lead to at least 10 per cent of its 151 membership being forced out of business by December.

Since February 1, the preowned vehicles imported by dealers have had to undergo inspection by an agent of the Trade Board. They are then issued with Pre-shipment Inspection/Dealer Disclosure Certificates (PSIC/DDC) prior to shipment to Jamaica.

According to JUCDA President Lynvalle Hamilton, this has forced preowned car dealers to source better quality and, therefore, more expensive vehicles.

Costs have risen for dealers by around 30 per cent, he said.

The PSI facility seeks to verify the history of the vehicle - including accidents and major repairs - conformity to age limit (model year), road worthiness, radioactive/microbial contamination and odometer readings.

A representative of the Trade Board told the Financial Gleaner that imports were significantly down as of April, as the quality and cost of imports climb.

Hamilton said on Tuesday that prior to February, dealers were able to bring in motor vehicles with minor faults and have them repaired in Jamaica where labour costs are cheaper. But now, those vehicles are being rejected by the PSI agent - Auto Terminal Japan Limited - for defects such as rust and missing hub caps, said the JUCDA president.

LONGER WAITING TIME

It also takes a longer time for the delivery of vehicles that have been approved, a situation that he said was compounded by the lack of an online application system for inspections.

Now it takes six weeks for units to be accepted for inspection, whereas orders were previously filled in about two weeks, he said.

Hamilton, who is also CEO of Auto Channel Limited, said that vehicle inventory among JUCDA membership remained fairly high because many of them had brought in extra units in anticipation of delays under the PSI regime. He adds, however, that some of the smaller dealers may be in danger of folding, as Jamaica Customs Agency appears set to auction uncleared vehicles at the wharf.

In 2017, vehicles imports climbed 8.5 per cent, from 32,000 to 35,000. Hamilton previously attributed the spike to new players entering the market a bigger push from Japan to export vehicles.

Showroom sales were also driven up by low interest rates loans on offer from the banks, he said.

avia.collinder@gleanerjm.com