Afew weeks ago, Guyana welcomed with open arms the Isuzu brand of vehicles by Marics and Company Limited. The event was well attended by several members of thevdiplomatic community and other stakeholders in the car dealership industry.
Many were in high praises of the presence of another foreign investor on the market. But for Chief Executive Officer of the Guyana Office for Investment (Go-Invest), Owen Verwey, it meant a bit more. It meant that the new vehicle market was not lost under the carpet.
Before elaborating on this, Verwey congratulated Marics and Company Limited on its launch, the addition of Isuzu to their Honda product line and for their show of confidence in the partnership concepts to make the vehicle brand launch a reality.
He said, “As we know, Marics and Company has been in existence since 1966, so there is lots of experience and local knowledge they can bring to any partnership arrangement and new venture in the automotive industry. It is a very good indicator for Guyana to see international companies and international brands choosing to partner and establish viable operations here.”
The Go-Invest CEO added, “It speaks to the business confidence and consumer confidence of its sustainability, and while I do not like to speak about the emergence of oil and gas in Guyana, I am sure that this was just about one of the variables influencing this decision by the investors.”
In addition to this, Verwey said that it is worth noting that the 2016 and 2017 budget entailed
some major changes to the tax regimes, thus making new vehicles (vehicles less than 4 years old) more affordable on the local market.
As part of its 2016 budget, the following changes had a major impact in reduction of import duties and taxes on vehicles less than 4 years old:
1. Removal of excise tax on motor vehicles under four years old and under 1500cc; thus reducing the effective tax rate from 118.7% to 68.2% of the CIF value;
2. Reduced excise tax, from 50% to 10% on motor vehicles under four years old, between 1500cc and under 2000cc., thereby reducing the effective tax rate from 152.3% to 85% of the CIF value.; and
3. Restricted importation of used and/or re-conditioned vehicles of over 8 years.
In 2017, there were additional budget measures in support of newer vehicles and the green state development strategy. The following additional measures were introduced:
(i) The lowering of the excise tax on hybrid and electric vehicles; (the 10% excise tax was completely removed. However, vehicles had to be less than 4 years old and not exceeding 2000cc);
(ii) Granting of tax exemptions to set up electric vehicle charging stations;
(iii) Zero-rating the excise tax on biofuel and specially designed refuse trucks;
(iv) Restriction of used tyres importation; and
(v) A reduction of taxes on new tyres.
Following these changes in 2016 and 2017, Verwey said that it is also worth noting some brief statistics on the less than 4 year old vehicle import data since 2015.
New Vehicles
• In 2015, 6.9% of all vehicles imported were new (less than 4 yrs old) while the 2017 data shows 17.1% of all vehicle imports were new vehicles. This represents a 59.7% increase in the total number of new vehicles imported.
• The value of the vehicles imported in 2017 showed a mere 29.2% increase from that of 2015. Therefore, because of the change in taxes, we can assume that more consumers were buying newer vehicles at a minimum difference in cost.
According to the Go-Invest head, these changes are likely to positively impact the economy as newer vehicles often have fewer demands on repairs and maintenance and importation of spare parts.
Like most countries, the Go-Invest head said that a personal vehicle is considered a major purchase and a significant investment. And
Guyana is no different. Verwey noted that the introduction of more brands to the market helps consumers in making this investment
decision as they are provided with more options, rather than simply the cheapest vehicle that the importer can find.
Verwey expressed that this is a positive development for consumers as they will be able to make decisions that benefit them in
the long-term rather than provide short-term gratification.
As Guyana expects to see more and more cars on its roads in the coming years, Verwey said it is expected that with newer cars, these would
be safer, more reliable, cleaner, greener and more energy efficient. He commented that these newer vehicles will also help the country to reduce its carbon emissions and contribute to the global fight against climate change. In conclusion, Verwey said that the Isuzu name is not new to Guyana. However, its recent launch makes for an easier opportunity for persons, companies, organizations and government to own and benefit from the brand’s advantages.
