Changing the foreign used rules

The roll-on roll-off car industry was given a big jolt recently when automobile veterans, Classic and Diamond Motors, which form part of the Ansa McAL conglomerate, announced that it was venturing into  this expanding market. The strategic move sent ripples running through the local industry. With Carmax, launched on 19th July, ANSA McAl is looking to capitalise on a lucrative and growing market.Carmax website says that they are the number one dealer for roll-on roll-off and local used vehicles. It’s a move that caught some in the industry by surprise simply because the ANSA McAl group caters for the upper and middle end of the market.

Managing Director of the group’s automotive sector, Jerome Borde, said the move to capture part of the expanding foreign used car market was a case of, “if you can’t beat them, join them.” “We never supported the policy of used car imports because it was not designed to offer consumers a fair complete product,” he said, noting ‘it denied tax payers’ revenue because of the previous structure and it certainly was not a level playing field,” said Borde. Carmax was initially set up in 1999 as a local used car dealership in Grand Bazaar, but within the last month a new branch was opened at Classic Motors offices on Richmond Street to handle the foreign used cars. Currently, the company’s day-to-day operations is controlled by Robert Redstar. Carmax will be selling only Mitsubishi and Honda vehicles for the time being, said Borde, since they are using the same suppliers used for the new car divisions, out of Japan.

One foreign used car dealer offering a Mitsuibishi Lancer out of Japan at a Grade 4 at $75,000, while Carmax offers the same grade Mitsubishi out of Japan for $77,000. However all pricing depends on the added features included in the vehicles, along with the age of it, said Borde. Borde says it was a market that the conglomerate could not ignore. Despite the shock to other local dealers, Borde said as an automotive trader, “you cannot ignore the used car market, since it has been taking market share away from new car dealers for some time.” Their estimates, he said, show that sixty per cent of all cars registered in this country are used cars. “We are in the car business, therefore we cannot ignore that fact. We had no choice but to get into it,” said Borde.

Following the 2002-2003 budget the policy regarding roll on, roll off vehicles was changed and Borde said this move leveled to playing field for competitors. “Since then the policy has changed somewhat, where the duties and taxes are more in line with what existed in the current(new car) industry,” said Borde. But even with these changes there are still issues that need to be addressed, Borde noted. “At my last check there were about 90 registered used car importers,” he said. However there are stipulations, outlined by the government, that must be followed. To become an established car importer, for instance, dealers must have a bond, stock of parts, service centers, trained technitions and warranties. “Out of that ninety I am certain that less than ten per cent qualify with those conditions,” he said of the dealers. “So there is still a lot to be done. Presently, the foreign used division of Carmax is in the teething stage.

Most of the advertising has been done by word-of-mouth, but Borde said within the next few months, the company will be pushing the advertising. They intend to push the connection to Diamond and Classic Motors, said Borde, in order to increase the credibility of Carmax. “We will push the connection because we will be offering all the support for Carmax. We will have trained technitions, spear parts and warranty,” said Borde. Borde said they expect to sell about 500 units a year. Currently the local used car division of Carmax sells about 300 units a year. Classic and Diamond together has sold a little over 200 new cars for the year.