Neither continually rising fuel prices or a less than reliable national road network has sated the desire among Guyanese to possess their own cars. The cars just keep coming. “Houses and cars are the two things that Guyanese most want to own – and not necessarily in that order,” says a local car dealer.
Time was, when a car was a luxury, a definitive status symbol that separated the well-off from the working class. Just over 20 years ago stringent government regulations that placed strict limits on the outflow of foreign exchange meant that the flow of car imports amounted to no more than a trickle. With those restrictions, now a thing of the past, dealers have moved swiftly to satisfy what has become a near national passion for ownership of cars.
The high demand for cars is linked to cheaper and easier financing. Increasing numbers of affluent Guyanese appear to think nothing of “forking out” a few millions to indulge themselves while the local commercial banks jostle each other to offer an array of “loan packages” to those whose dreams of car ownership are not always backed by ready cash. Duty-free concessions and low-interest government loans have also meant that cars are now affordable even to less than well-paid public servants. These options apart, overseas remittances are frequently applied to car purchases.
Between 2001 and last year 15,254 cars valued at $14.485 billion were imported into Guyana. Reconditioned cars from Japan accounted for 90 per cent of car imports during that year. The upward trend in the number of motor cars imported for sale annually has remained unchanged as has the popularity of the reconditioned Japanese models with local buyers.
Japan rules the local market. Japanese imports range in price from $900.000.00 to around $5m with SUVs and other sports utility vehicles representing the high end of the market. New cars can cost up to four or five times more than reconditioned ones. Import tariffs of up to 150 per cent of the landed cost of the vehicle plus the dealer’s “mark up” have made new car purchases the exception rather than the rule in Guyana. Local dealers say that it is less than worthwhile to import new cars which sell at the rate of around one per month and to assume the additional responsibility of providing a three-year warranty for that car.
Dealers also dismiss concerns about the durability of reconditioned cars. They point out of that most of the reconditioned cars imported into Guyana would have been driven on “good Japanese roads” and, moreover, that they have benefited from regular hi-tec servicing and, as such, are well worth the prices at which they are offered locally.
The most recent available Guyana Revenue Authority (GRA) figures on revenue earned from car imports indicates that in 2003 Guyanese paid $444.1M in purchase taxes on cars and $251 M in motor vehicle licences. Statistics provided by the GRA also reveal that almost 2,000 newly acquired cars are registered in Guyana each year. The local market for reconditioned cars, primarily the popular Japanese models – Toyota, Nissan, Mitsubishi and Honda – is around ten times larger than the market for new cars.
Wilfred Brandford, proprietor of Car Care Enterprise, one of the largest importers of reconditioned cars rates the Toyota as the fastest selling brand with the Carina and Corolla also finding favour with local buyers.
With more than thirty established dealers offering used cars for sale to Guyanese the competition has meant that the trade has become a matter of “wheeling and dealing.” What the buyer eventually pays for a reconditioned car has become a matter of effective bargaining. So keen is the competition that bargaining is not confined to purchase prices only but often extends to the “throwing in” of additional accessories to “sweeten the deal.” Possession of “ready cash” can sometimes strengthen the negotiating position of the buyer.
Despite the overwhelming popularity of reconditioned cars on the local market a few established dealers – Auto Supplies Com-pany Ltd, Beharry Automotive Ltd, Marics & Company Ltd, and Mings Products and Services Ltd. – continue to hold franchises for new vehicle imports. In making a case for new cars Brian James, Chief Executive Officer of Auto Supplies, says that in many instances buying a used car may mean spending money on repairs as early as the first month after purchase. “With new cars there are guarantees that protect against that eventuality,” he says. James, whose company holds the Suzuki franchise says that the buyer’s possession of direct manufacturers’ warranty coupled with trained technicians, mileage guarantees, production time guarantees, no previous accident guarantees and catalytic conversion systems for controlling environmentally harmful emissions make new car purchases a safer bet. Plus, he says, there are factors like fuel economy which, in the longer term can make new car purchases more cost effective.
While used car buyers are often able to negotiate the fitting of new tyres as part of purchase “deals” James says that the proliferation of used tyres, with their safety and environmental considerations, is part of the downside of reconditioned car imports. “In the United States motorists are charged a disposal fee on used tyres which is payable when a new tyre is bought. When we import used tyres from the United States we are in fact meeting the cost of that disposal fee,” James says.
Making the case for new cars, however, will continue to prove difficult in a country where the cheaper option means that more people are now able to realise their dream of simply owning a car. We have come a long way from the days of the unstylish Soviet-manufactured Lada and the small number of Datsuns that used to comprise the major portion of car imports. During the late 1980s gradual economic liberalization led to an increase in car imports. Animated by a strong desire to own a car, Guyanese simply bought any available vehicle. Some of the earlier generation of local used car dealers made “a killing” importing considerable quantities of cars that were long past their best days from Japan, the USA, Suriname, Brazil and some Caricom countries. The government had little difficulty with the importation of these vehicles insofar as the transactions did not involve the expenditure of foreign exchange. Those, of course, are distant days that we have long left behind us.
