A combination of a fall in the sale of new cars, increased demand for used parts and a change in its business strategy has resulted in Massy Motors now going into the retail sale of vehicle parts.
In an interview with the Sunday Business Magazine, Massy Motors Senior Vice-President Jean-Pierre du Coudray said the opening of its latest venture, Massy Motors retail, is just one of many to come in the entity’s strategy moving forward.
du Coudray explained that Massy “Everything Automotive” at Maraval will lay the foundation for other sites.
“We will be using this opening as a pilot project to see how things go to learn the business, to learn the dynamics of that particular industry because it’s a new industry to us but so far it’s off to a flying start because the feedback from the launch has been very positive.
“So we anticipate things to go well for us in that particular location,” du Coudray said, adding that the company had invested heavily in technology and state-of-the-art equipment sourced from Europe for its Maraval site.
But, he said, a key factor which kept the outlet from opening sooner was ensuring that there was a strong digital platform in place for customers.
“Now that we have this, customers can book appointments online and receive regular status reports about their vehicles among other benefits and so there is the very high possibility for a very contactless operation from a customer stand point.
“We want to be heavily focused on customer service because we know that time is everybody’s biggest commodity,” du Coudray added.
Further, as the dynamics of any business constantly changes due to COVID, he emphasised that digitisation is a key component.
According to du Coudray Massy Motors intends to add other retail outlets in key strategic locations such as San Fernando, Point Fortin, Chaguanas, Arima and Tobago later on.
He said Massy Motors is currently visiting the possible locations to carry out the necessary internal governance to ensure the projects are justified and approved.
However, du Coudray said before the end of the financial year- around September 2022-Massy Motors should have another three retail footprints up and running.
And the impetus to move into the retail sector, du Coudray noted was a natural transition for Massy Motors.
Noting that the company has a very strong operation on the wholesale business he said this move was only a matter of time.
In the past two years the overall new car sales sector has been down between 15 and 20 per cent, du Coudray cited, adding that Massy Motors is probably aligned to the reality of the market.
He said the reduction was due to several reasons.
The impact of the pandemic on the global supply chains is a main factor du Coudray explained, “We are not getting the number of vehicles we would like. All the brands we represent-Volvo, Subaru, Volkswagen, Hyundai, Nissan and MG-they all seem to be having some sort of supply issues as a result of COVID.”
According to Focus2Move in September 2021 T&T’s market keeps growing in double-digits after a 48.9 per cent increase in sales the previous month, and reports 1,071 units sold (+44.3 per cent), leading year-to-date sales at 9,225 units, a 24.1 per cent increase in sales compared to 2020.
Compared to pre-pandemic levels the market is not recovered effectively yet, in fact, with respect to September 2019 sales are down 11.7 per cent.
Focus2Move is a market intelligence and consulting firm specialized in the four-wheeler industry, providing data, forecast, insights, consulting and support to all entities involved with this unique industry.
It also noted that due to COVID-19 full-year sales for 2020 have been 10,122, reporting a 31 per cent decrease compared to 2019.
Further, du Coudray attributed the drop in sales to a global shortage of the semiconductor chip which is a very key piece of technology used in vehicles.
And expect the semiconductor shortage to last until early 2023, Deloitte said in a new report, adding that by the end of 2022, customers will still be waiting 10 to 20 weeks for multiple kinds of chips.
A semiconductor chip is an electric circuit with many components such as transistors and wiring formed on a semiconductor wafer.
Coupled with the shortage of the chips, du Coudray said given the financial fallout of COVID19 together with rising inflation this has resulted in more people being wary about investing in a new vehicle.
“The disposal income is probably not there as it was two or three years as before and in this period of uncertainty people tend to be a little more conservative and probably holding off from purchasing a new vehicle,” he added.
However, this presented a new opportunity for Massy Motors as the company also capitalised on this opportunity to get into the retail sector.
According to du Coudray with more people wanting to hold on to their vehicles despite the age there would therefore, be an increased demand for parts and services.
“So they would need more batteries. They would need more types and accessories which is where the retail footprint also came into play,” he added.
Massy Motors carries different brands for different segments.
Regarding top sellers, du Coudray said Volvo has generated ‘a lot of excitement” in Trinidad, not only coming with the traditional comfort, safety and reliability aspect but he added that these vehicles are much more sleek, innovative and modern-looking.
“We have seen a very positive increase in that market share for that brand,” he added.
But the bulk of the company’s sales currently fall into the Nissan, Hyundai and MG which du Coudray described as “the more down market or value for money segment.”
He noted that the main sellers has been the Hyundai Touson and for Nissan, the Frontier pickup.
Regarding the foreign exchange crunch du Coudray said Massy Motors has been managing its cashflow “very smartly and efficiently” as the entity has been meeting its US$ requirements to date.
“So luckily our supply issue is not linked to foreign exchange,” he added.
Effective January 1, 2022, T&T will be removing all custom duties, motor vehicle tax and value added tax on the importation of battery-powered electric vehicles with an age limit on imported used battery-powered electric vehicles of two years.
Finance Minister Colm Imbert had said this was in keeping with the Government’s commitment to promote a green economy and reduce the country’s carbon footprint.
According to du Coudray it is an incentive for bringing in electronic vehicles.“This will be feasible for us to import electronic vehicles and we have already started this process. So we have engaged with our suppliers and we expect that by the middle of 2022 we will have maybe two or three electronic vehicle options to offer to the market,” du Coudray said.
Additionally, he said Massy Motors will also have to ensure it meets the necessary infrastructural requirements for this venture noting that “it’s one thing to order the vehicles but another thing to support that whole business.”
Hence, there’s a lot of infrastructural investment which Massy Motors has to undertake, du Coudray added.
“Not only charging stations but also from behind-the-scenes operations in terms of a workshop with the right training and the right technical staff to deal with the electric vehicles because they would obviously be different to the traditional vehicles,” du Coudray noted.
In pursuance of goals and objectives towards net-zero under the Paris Agreement, and the energy transition, many countries have already signalled that they will be phasing out the sale of new vehicles that run on fossil fuels (including compressed natural gas) and internal combustion engines (ICE vehicles) by as early as 2025, by replacing them with electric vehicles (EVs).