By Joel Henry
Automotive Big Picture
The automotive sector in Trinidad and Tobago is made up of new and foreign used vehicle dealerships. The new car market is controlled by a small group of franchise holders for US, European, and Asian brands. The foreign used vehicle market consists of many small and medium-sized dealers. Because of the nature of the industry and constraints on the market at present, the number of dealers can range anywhere between 377 (the total number of authorised used car dealers) and half that amount.
Sector In Transition
Though Trinidad and Tobago remains a regional leader in the automotive sector, in the 2017/2018 period, several factors have had an impact on its performance. Firstly, the economic downturn has played a part in the car buying habits of the population. The sector has also been affected by Government’s 2017/2018 Budget, which contained several policies that directly affect both new and used car dealers.
Budget 2017/2018 On CarsImportation of Cars a Major Spender of Foreign Exchange
- Cars amount to 23% of US$ 3 billion in spent forex
- US$ 500 million spent in 2017 for 35,000 vehicles
- Maintains removal of taxes on hybrid vehicles under 1599 CC
- Removes tax breaks on petrol and electric hybrid engines over 1599 CC
- Maintains tax breaks on CNG vehicles
- Removes fuel subsidy
CNG And Electric Hybrids
CNG transportation requires considerable infrastructural investment, which is being undertaken by the National Gas Company of Trinidad and Tobago’s CNG subsidiary, NGC CNG. In general, the country has been slow to adopt CNG vehicles. It is hoped that the budgetary incentives, along with new vehicle models and proper infrastructure will jumpstart growth.
During this period, electric hybrid vehicles have been growing in popularity and in one very specific and outstanding success story, have become a profitable niche. While there are several dealers selling electric hybrid vehicles on a small scale, P&V Marketing, a Chaguanas-based dealership, has built a business offering several new and used models along with servicing and repair facilities.
- Despite challenges, sector will remain strong due to limited national transportation system
- Market growth in fuel efficient petrol, electric hybrid and CNG vehicles
- Foreign used dealers will continue to be challenged by quota, age rules and forex
- Nevertheless, there will continue to be strong demand for affordable, foreign-used vehicles.
Globally, aviation is a massive industry. In its 2017 Aviation Benefits Report , the Industry High Level Group (IHLG) of the international aviation sector states:
- Airlines carried 3.8 billion passengers with 7.1 trillion revenue passenger kilometres (RPKs)
- Latin America and the Caribbean air transport provides 5.2 million jobs and US$167 billion in GDP
Key Players In The Trinidad And Tobago’s Aviation Sector
Local air service providers are required to have an air operator’s certificate (AOC). Currently there are five AOC holders.
Trinidad And Tobago Air Operators:
- Caribbean Airlines Limited (CAL)
- Briko Air Services, a fixed wing air service provider
- National Helicopter Services Ltd (NHSL), a national carrier
- Bristow Caribbean, a helicopter service provider
- PHI Inc, a helicopter service provider
International airlines licences are granted through air service agreements (ASAs) between countries. Several regional countries are part of the CARICOM Multilateral Air Service Agreement (CMASA) with Trinidad and Tobago.
International Air Service Agreements:
- Number of countries with ASAs with Trinidad and Tobago – 15
- Number of CMASA countries including Trinidad and Tobago – 10
- Number of foreign airlines operating in Trinidad and Tobago – 16
The aviation sector is seen as high potential by analysts but faces several challenges. Aviation, like most sectors, has been affected by the economic downturn. Helicopter firms serve the energy sector, which in recent years has been hit with falling commodity prices and natural gas shortages. CAL has had difficulty with profitability for many years. In 2017, the Joint Select Committee on State Enterprises released a report on the administration and operations of the national carrier.
Joint Select Committee on CAL:
- Serious personnel issues
- Outstanding debts from Venezuela
- Burdensome cost of serving the air bridge between Trinidad and Tobago
Since the report, CAL has made progress:
- New Chief Executive Officer, Garvin Medera, appointed in October 2017
- 21% revenue increase in Q1 2018
- 64% earnings increase in Q1 2018
- CAL’s stated goal is profitability by end of 2019
Potential For New Air Bridge Carrier
In January 2018, it was reported that a new business interest, Tobago Airways Ltd, was seeking investors and planned on competing with CAL for the air bridge. Air travel between islands has been a persistent problem because of the enormous subsidy on the route.View Companies Related to Automotive & Aviation - Who's Who