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Diigo/FurlPublished On:Tuesday, March 23, 2010
By NEIL HARTNELL
Tribune Business Editor
BAHAMAS Motor Dealer Association (BMDA) members were yesterday said to be "generally somewhat disappointed" with the 32.38 per cent decline in new car sales year-over-year during February 2010, having hoped for better, with most not expecting "any major" improvement in performance between now and the 2011 first quarter.
While there have been signs that the recession may have bottomed out, the figures released yesterday by the BMDA - showing new car sales have fallen by almost one-third compared to February a year ago, which would have been a weak comparative - again indicate that the Bahamian economy is struggling to pick itself up off the bottom.
Rick Lowe, a director/operations manager for Nassau Motor Company (NMC), a BMDA members, said of the February 2010 performance: "I think generally we were a little more hopeful coming in after January, and all the positive talk of growth. I think we're all somewhat disappointed.
"February the year before was a dramatic turnaround, but not as much, so it's a little disconcerting. Most people I've spoken to don't expect any major changes between now and maybe the 2011 first quarter next year."
Bahamian new car dealers were now pinning their hopes on this week's upcoming New Car Show, which takes place on March 26-27 at the Mall at Marathon, sparking an improvement in sales figures.
Many BMDA members were "cautiously optimistic" this would happen, Mr Lowe told Tribune Business, and were hopeful that consumers may be "putting off purchases now in the hope of the banks being more aggressive during the Car Show" and offering better lending rates.
The BMDA would "have a better feel for where the market is going after" the Car Show, Mr Lowe told Tribune Business, adding: "We're hopeful people are holding off, waiting for the Car Show, and that we will see that turn everyone else says is on the way."
Yet given the BMDA sales figures, and the 30 per cent decline in business reported by shipping industry contacts, Mr Lowe said: "Based on that, I'm thinking we haven't turned the corner yet."
Shipping companies will be among the first to see a turnaround, as import levels will rise amid an economic rebound, while sectors such as new car dealers and the construction industry are bellweathers for how the wider Bahamian economy is doing.
Mr Lowe, meanwhile, said the tight availability of credit was also having "an impact" on new car sales. While consumer floor traffic was still there in many showrooms, although "not to the extent it was two years ago", he added that "people are more reserved and concerned they will not get the financing".
Banks were seeking the required deposit and additional security for many car loans, and Mr Lowe added: "They are definitely sticking to their guns, at least from our experience."
While the new car sales decline was having a "major impact" on dealer revenues because they accounted for such a huge percentage of the top line, Mr Lowe said Nassau Motor Company (NMC) had been able to cut costs by 4 per cent, a figure expected to improve in February.
In some areas, the company had cut costs by 10 per cent or more, but Mr Lowe said: "When sales have declined, the net overall effect is lower. We just have to keep plugging away, pull our socks up, work hard and, at the end of the day, we will see the results."
