It has not always been an easy task for automobile dealers with the conscientious ways of importing cars for the Guyanese market. Import taxes are hugely exorbitant for local auto dealers. Therefore, the Guyanese market feels the squeeze of purchasing vehicles today.
One auto dealer, Richard Singh, owner of “Best Buy,” commented on the “painstaking” methods conducted when importing cars. He said that it is a “tricky market” considering that most of the cars are reconditioned.
There is therefore the need to check the wear and tear of the vehicle, the history of mileage and the manufacturing year of the car are all under scrutiny.
There are people from these international markets who are employed by these auto dealer companies to check the durability and drivability of the imported cars from the Japanese market. The checks and tests have to ensure that there is quality.
There are times when an incident occurs that can cancel a shipment. There is no refund of freight charges if this is the case. These are some issues of importing automobiles that the dealers have to consider carefully.
Some may rely on overseas auctions to buy automobiles for Guyana consumers, says Brian James of Auto Supplies Company (ASCO), distributors of Suzuki vehicles.
However, the taxes are way too high, according the Best Buy owner, Richard Singh. In most cases the tax of a vehicle is more than half the cost of it. The average price of a car is $1.8 Million to about $2 Million. This relays that the tax would be one million and more. The tax structure is set for cars that are four years and older.” Therefore, cars from the production line in the years of 1999 to 2006 are the latest that can be brought in at an affordable price for consumers.
Any later model would be highly expensive as they attract much more taxes. This is not lucrative for Guyanese consumers. Then there is the engine capacity. The bigger the engine, (over 2000CC) the more taxes are paid on these vehicles.
For an auto dealer, buying a car overseas is simply to pay for the value of the car along with its shipping costs. But when it arrives in Guyana, the taxes are steep.
The dealer said that there is equilibrium between the two genders in purchasing cars since women are also finding their ground in the professional world. What he has noticed is that “a lot of families” come to buy these automobiles.
Brian James said that he receives more male customers than women.
He said that his company imports brand new vehicles from the Japanese factory that manufactures the vehicle. He stressed that unlike the rest of the market, his company never imports reconditioned vehicles.
The Managing Director of the company said that whenever his company purchases for the local market, it tends to “look at the range” of the automobiles and “see which one is applicable for Guyanese.”
Auto Sales has a six-month process before hand to order the vehicles and specify what would be sold locally based on the years of local market research. He divulged that if one sees “one thousand cars on the street, less than one hundred are brand new vehicles.” The majority are reconditioned vehicles. Hence, many Guyanese are unaware of the cars that they are buying.
An individual can be driving an overseas written off automobile. However, this vehicle may have three different sections from three different vehicles that were welded together then attractively spray painted to have the appealing look of a freshly produced factory motorcar.
The Best Buy auto dealer related that he is aware of this problem and does not import such vehicles as he stated that he believes in “quality control,” catering a “wide variety” for his intended customers.
An individual who buys a vehicle may desire to sell the car after owning it for three to five years. Therefore, he has to ensure that the car he sells would still be fit after a change in ownership.
He added, “No two cars are alike.” Different owners treat their vehicles differently.
Brian James of ASCO relayed that they offer a three-year warranty and emphasised that these automobiles are durable and have a lifetime of over 20 years and even extend into thirty.
However, the average price would be $12 million. From that total “$4 Million goes to the company and $8 Million goes to Government in taxes.” The commission of the sales person is drastically reduced to about $1 million.
Another point that James pointed out was that they only supply brand new tyres unlike other auto dealers.
Nevertheless, the stress of the taxation system weighs heavily on the profits of these companies.
Brian James said that it is becoming “more and more financially difficult,” when it comes to paying excise tax and vat. He also related as Singh did that based on engine size, the excise tax can attract 45 to 50 percent or even more of the worth of the vehicle.
James said that because his company has to sell its vehicles at a price for the average Guyanese, they import only twenty vehicles as to try not to have any left over stock.
Both Managing Directors of their companies agree that they would like to see the Government reduce the excise tax on the imports of vehicles.
Richard Singh said that he would like to see the reduction of the tax based on engine size and Rules and Regulations change thus allowing the importation of newer vehicles at a much cheaper cost.
Brian James had a suggestion that Government should increase licensing and using servicing fees. In other words, road fitness should be charged more than the current charges. Then Government should reduce the tariff tax to make vehicles, especially brand new ones more affordable.
This would still garner revenue for the Government while allowing Guyanese to buy new cars and not the reconditioned maladies on the roads.
The ASCO Managing Director lamented that we have become “a nation of accepted used products.” This was his reference to Guyana becoming the dumping ground of First World Countries pertaining to cars and tyres among other items. (Rondi Sue)
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