Devaluation inflates vehicle prices - More increases expected at Christmas

Chad Bryan, Gleaner Writer

Despite efforts by new- and used-car dealerships to hold strain as the Jamaican currency steadily weakens, both sectors have had to increase motor-vehicle prices.

"The sliding dollar is definitely having a negative impact. Car prices have been going up, although we have been trying to hold strain. But based on the increase, it has been very difficult for us to maintain prices," said president of the Jamaica Used Car Dealers Association, Lynvalle Hamilton.

Hamilton pointed out that although there have not been any reports that used-car dealers have been put out of business as a result of the unfavourable exchange rate, he believes that if the instability continues, some dealerships could soon close down.

He also admitted that some of the increasing costs had to be passed on to automobile purchasers. "In some cases, you have had some dealers that have been trying, but based on the level of depreciation, you would not be able to survive by just holding down the prices. It is not very significant right now, but we are heading into Christmas and at this time prices normally go up. It is only natural," Hamilton explained.

customer protection

Asked if adequate measures were taken to protect customers from price increases, Hamilton explained that it is up to the Government to contain the movement of the dollar.

His counterpart in the new-car dealership sector, Kent LaCroix, who chairs the Automobile Dealers Association, has a similar take on the exchange rate's negative impact.

"It's affecting everybody adversely, but it depends on what sort of currency we're paying for these vehicles. Sometimes the dollar devalues, but sometimes other currencies will devalue and so you end up balancing out. But generally speaking, prices will continue to go up as the dollar devalues," he said.

However, unlike Hamilton, there is no concern about new-car dealerships going out of business.

"There is no concern. Absolutely not, because there is too much invested in the businesses," he said.

In dealing with rising costs, LaCroix said dealerships have tried to minimise inventory by offering specials, such as discounts, to move the stock.