Saturday, March 21, 2009

Sale of New Cars Down 40%

Sales of new cars fell from 40 to 42 percent in February, reported the Union of Importers of Vehicles.

Cromwell Cuestas, president of the union, said the factors that influenced the decline in sales are bad monetary policy, the illiquidity of the banking system, and the volatility of the dollar.

Cuestas said that at this time it is crazy that Congress raise taxes because this only generates more unemployment.

"It is a punishment of the country's productive class, to approve a tax on the first registration of a vehicle," he said.

According to the union, many people have asked for hybrid cars, which are used in other countries. However, manufacturers have not yet brought these products to Guatemala.

The union believes that sales will recover by summer when the U.S. and European economies begin to lift.

Cuestas advised the banks to grant loans with low interest rates and the Bank of Guatemala to monitor the recovery of the dollar.

The government is trying to modernize the tax system, which includes a tax on first registration of vehicles, but the union did not support this measure. The government is proposing a tax of 30 per cent of the value of the vehicle upon its first registration.

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