Friday, February 13, 2009

Auto Sales Drop 41% in December/January

The sales figures for the last three months of last year and the first month of 2009 were not encouraging for the national automotive industry. The worst sales were between December and January when they fell 41 percent. Data from the Vehicle Importers Union indicated that this amounts to a total of 1,784 units less.

José Javier Casas, sales manager Cofiño Stahl, distributors of the Japanese Toyota, reported that the total market for new vehicles from 2007 to 2008 decreased from 36,980 to 28,967 units, equivalent to a 22 percent of drop..

Casas said the downward trend had already begun two years ago. He added that another reason is the lack of bank credit created by the lack of liquidity in the national financial system.

Another factor is the new First Registration Tax, which was discussed in Congress and which was adopted on the second reading last week. Brenda Monterroso, director of Union of Importers of New Vehicles, said an increase in taxes would result in a greater decline in vehicle sales, which would in turn, lower tax revenue represented by VAT, import taxes, and Income Tax, paid by the import and distribution companies.

This tax, which is part of the tax modernization package, raises the tax for a new vehicle's first registration to 26 percent of the value.

Nelson Escalante, of the Union of Used Vehicles, said when the tax goes into effect the cost of each vehicle would rise from Q10,000 to Q15,000.

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