Duty cut on hybrid vehicles a non-starter so far
Published by www.jamaicaobserver.com on Apr 25, 2007
Apr 25, 2007

Some local motor vehicle dealers have applauded the Government's 63 per cent cut in duty on imported hybrid motor vehicles announced last week, but say that consumers will not benefit from the policy immediately, as the decision to send those kinds of vehicles to the island rests with the manufacturers.

Honda Accord hybrid version

"I am not sure if such products are on our model line-up, but right now we have nothing on board for hybrids," said Nigel Pagan, head of Challenger Auto, local representatives for General Motors. "We have to answer many questions before they consider sending certain vehicles into our market, it could be years," he added.

Finance Minister Dr Omar Davies announced the duty reduction last week in his budget presentation in Parliament. The new policy forms part of the Government's effort to lower the nation's spiralling fuel bill that ran over US$1 billion last year.

The new duty becomes effective July 1. However, the local auto dealers told the Business Observer that the manufacturers of the vehicles have the final say on what vehicles are imported into a market.

At ATL Motors, dealers for Honda in Jamaica, the duty reduction was taken with lukewarm reception.
"It all depends on what Honda decides," said Sales Manager Christopher DaCosta. He explained that Honda determined what vehicles were sold in the various markets and cars that are designed for the US market, for example, are not sold in Jamaica.

"We could request it, but Honda determines what we get and even if we requested it we might not get it," said DaCosta.
He also stressed the need for adequate servicing capabilities before such vehicles could be sold in Jamaica.
The view was the same at Toyota Jamaica.

"We do not have the technology to service the cars and that would have to be in place before we could even think about importing them," a representative said.

None of the local dealers could, however, give a figure on the cost for the required training and retooling.
Despite the industry's inability to jump at the lower duty rate, the long-term benefits were acknowledged by some of its members.

"It is an excellent move on the part of Government, as we have serious problems with the cost of fossil fuel," said Andre Hylton, owner of Andre's Auto Supplies.
He, however, admitted that the training of mechanics and service retooling would have to be securely in place before new hybrid vehicles are imported.

"Nobody will import them without technology in place. There has to be training. Part of the technology is the same, but with the hybrid aspect, mechanics will have to be trained to understand it," said Hylton, a former president of the Motor Vehicle Repairers Association.

Hylton added that people have not yet attained confidence in the units and the vehicles would also have to be offered at a competitive introductory price. "It's a new technology, we have to get used to it," said Hylton.

Hybrid vehicles are touted as energy-efficient and environment-friendly, saving on gasoline consumption and reducing emissions. But they are priced higher than conventional vehicles.

According to motor vehicle experts, hybrid cars, powered using a combination of gasoline and battery cells, cost an average of US$2,000 to US$3,000 more than comparable gasoline vehicles.

The lower tax window of 63 per cent would put the cost of the more expensive hybrid vehicles closer in line with traditional gasoline vehicles.

Conventional gasoline vehicles now attract 40 per cent duty plus a Special Consumption Tax (SCT) linked to the CC rating of the vehicle.

According to the industry, vehicles rated up to 1499 cc are taxed at 27.35 per cent; for those between 1500cc and 1999cc the tax is 34.88 per cent; and vehicles at 2000cc to 3000cc attract a tax of 51.28 per cent.

Leading car manufacturers Toyota and Honda have both offered the hybrid option in their top-selling models.
At Toyota, the Camry has been offered in hybrid model joining the Prius, their original hybrid vehicle, while the Honda Accord and Civic are now also available in hybrid versions.

In addition, popular suvs such as the Ford Escape, Lexus and Toyota Highlander are all being offered in hybrid options.

GMC Yukon and Chevy Tahoe, even the high-end Cadillac Escalade all have been equipped with the dual power train.
Hybrid Alternatives

Cadillac Escalade
Chevy Tahoe
Ford Escape
GMC Yukon

Honda
Honda Accord
Honda Civic
Honda Insight

Lexus
Lexus GS450h
Lexus LS600h L
Lexus RX400h

Mazda Tribute

Mercury Mariner

Nissan Altima

Toyota
Toyota Highlander
Toyota Camry
Toyota Prius

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