Episode Transcript
[00:00:00] Speaker A: The best insight, instant feedback, accountability. The all new Talk Radio Freedom 106.5 Good morning guys.
[00:00:09] Speaker B: Good morning to you, Davey.
[00:00:10] Speaker A: Morning. Morning. Thanks for having us, Davey.
[00:00:12] Speaker C: Of course. Good to bring you guys back on. As we deal with this ever increasing high prices of motor vehicles. Makes you wonder, hey, they're really trying to get us mobile mobilize or just to not have a car at all. Boy. Now gentlemen, a lot of developments took place over the past few years. Well, and I want to start a conversation off before we get to the meeting that you all probably had yesterday.
Let's look at engine size, ccs in terms of engine.
Maybe I could clarify for the nation what caused these high prices for vehicles.
Because gone are the days when you had a. When you have B11 and B13. I remember B13 was the thing. Now the engines going now is ranging from 1600cc's going up.
What is the taxes afforded to persons if they cross 1900 cc's?
[00:01:03] Speaker B: Well, David, the increase in taxes was one of the major issue. But then also remember when this industry started, the foreign use industry.
We could have imported cars of any age, cars that were much older. Cars were 20 years, 25 years when it started. And then we had restrictions into the limitations into the age.
So remember, the Newark I get is more costly. It will be so. So it moved from that. It moved six years, then four years, then three years. Right. They also remember to the manufacturers have changed their place of manufacturing and in order to keep prices down.
Because when we started to bring foreign used cars, the price of a new car was like. No, you know, like in those days we had the Sentra and it was 150, $160,000. That is almost 30 years ago.
And the manufacturers have readjusted the way they do things so we could get cars cheaper. And today we still have a car, a new car that they could get $550,000. So in that way it does look bad 30 years after again a car for 150, $160,000. But in terms of the foreign used car.
Right. We have moved away from this age that where we used to bring the car, we could have been 15, 20 years old. Because remember, technology changed. We move in a direction of greener cars.
All these, all these issues. So that is why the cars prices now the new cars are matter of fact would be the preferable choice for citizens of the country of also compounded with taxation. Taxation have changed based on CC.
Like when you, when you cross 1600 CC and then you put a 2000 CC.
The taxes escalate very high. Right. The, the explanation and the reasons were because of the fuel consumption. We were importing fuel, we had a fuel subsidy and all these things.
But to get an affordable car, people can still get an affordable car, could be new or could be used.
[00:03:21] Speaker C: Now we talk in engine size and we're dealing with cc's, as you mentioned, things. I think I have a call coming through. Hello, Good morning. Quickly, good morning.
[00:03:29] Speaker B: They're bringing cheap Chinese vehicle in this country costing half a million dollars.
[00:03:35] Speaker C: I don't get where we come in with cheap Chinese vehicle costing half a million. I was getting to the point where we bringing in vehicles that doesn't even carry an engine but the price extremely high. Is it that they're paying higher taxes on the port? What is this tax conversation that is happening with these vehicles that has caused concern for you rundelphiers?
[00:03:57] Speaker A: Well, firstly, I mean when we talk about a vehicle that doesn't carry engineering, we are talking about the electric vehicle. I mean when I talk about the way it's manufactured, the chips you need to get the electric component, that is why most times I. Because it's advanced technology. Electric cars are that expensive. But I don't think that's the point. You want me to get to. You want to. You want me to get to the point where the issue we have with customs, the mild hybrid versus yeah, so I know that.
[00:04:24] Speaker C: So before we get to what identify to our listening audience what is a mild hybrid, right?
[00:04:33] Speaker A: Correct. So the thing is we have hybrid vehicles, right? So everyone just hear the word hybrid and just think it's just solely a hybrid vehicle. One type of hybrid, we have micro hybrid, we have mild hybrid and we have strong hybrid. Right. Micro hybrid is a hybrid vehicle that assists the battery on it assists with the accessories, the air condition, startup, stop them kind of things. Basic nothing with propulsion on the vehicle. The mild hybrid is. Does all of those things as a micro hybrid, but it also has torque contribution which means it contributes to the propulsion of the vehicle working in tandem with the engine, which is the internal combustion engine. Right.
And the strong hybrid works very much in the same way when it comes to propulsion just at intervals. The strong hybrid, its motor has the power to propel the torque, produces enough torque contribution to propel the vehicle on its own.
The issue that we have is that we've had this is not no new law and this is the next thing that frustrating does to. There are a lot of people who are dealers and should know better who just not edified on the entire position and going and cast a set of things out there. They're scaring people to extent and they're putting a lot of misinformation out there. This is not issue of a new tax being applied. This is an issue of a misinterpretation of a legal notice that has existed since 2022.
This, Mr. Baba will tell you also is something that we have faced when it comes to sunset clauses and legal notices that many times, and this has nothing to do with even government, this sometimes has to do with a new administration of the customs many times and the new batch of customs officers, some that possibly had better understanding or was wrong when the legal notice was passed, leaving and new persons ascending to higher positions and then new persons having another interpretation.
And that's exactly what happened. One of the issues, particularly with this, is that customs and this is something that we have brought up, Customs clearly is classifying the mild hybrid as it is classed as the micro hybrid.
Back in 2017 there was a dispensation of micro hybrids that was here. The my hybrid really wasn't on the drive as yet. The micro hybrid was there together with the. The more or less, let's say the strong hybrid. Right.
So the micro hybrid, there were some Serenas back then, around 2017, 2018, that would not propel in the car. Some dealers decided to go to court after we advised them not to, because after our association realized that this vehicle doesn't. The battery doesn't propel the car, we told them they would lose in court. They took customs to court on the micro hybrid and customs won that battle.
Customs know. It is our belief that customs know, based on having even further conversation with them yesterday, that their interpretation of the mild hybrid is that it is a micro hybrid. And that is something that we, as I said, had discussions when we were in the meeting with the minister yesterday with them. And that is something that we are going to bring solid evidence to them when we go back to meet with them. The mild hybrid does propel the car. The mild hybrid does have torque contribution. The mild hybrid is not a micro hybrid. So it is because there's a misinterpretation.
We are finding ourselves in this problem at this point in time.
[00:08:15] Speaker C: Let me take this call quickly. Hello, Good morning.
[00:08:18] Speaker B: Morning.
I just want to inform the citizens of this country that don't get tired with its hybrid and electric because they will have very, very little resale value.
As as for internal combustion engine that could last 50 years once you take care of it.
You think electric vehicles will last 20 years like a, like a ice engine. All right.
[00:08:43] Speaker C: Is a conversation that Mr. Babwa and Rondel Fields could answer. So I mean that's a very, very. I didn't look at that aspect of things, the resale value in these vehicles. I mean, I don't want to digress too much from our conversation on the tax.
But how, how are we faring in that, in that aspect? Gentlemen?
[00:09:06] Speaker B: David, I just want to read one thing before we kind of go off this topic. I want to just read for you what the legal notice said and you could give your interpretation of it or whoever is listening.
So the legal notice that we are guided by and that we have been guided By since when 2022 clearly states here, right. A new hybrid vehicle means a vehicle which imported for private use with an engine size not exceeding 1599 cc.
Right. So this is what they classify as a hybrid vehicle and capable of being propelled by a combination of an internal combustion engine and an onboard rechargeable energy system. System or energy or other energy storage device where the electric motor does not exceed a maximum power of 105 kilowatt. Now you see in the first sign here, capable of being propelled by a combination of an internal combustion engine and an onboard rechargeable energy system. It never say here that where the. The motor has to be working full time or even the lower spec of the motor, it gives you a higher spec of the motor, 105 kilowatt. It never say it has to start from 10 kilowatt to 5 kilowatt or something like that. And this is where we have some misinterpretation that we are dealing with right now.
[00:10:27] Speaker C: And that brings me to my next question to you. Before you jump in, Rondell, I wanted to get this question and maybe you all can chiming on it as we're dealing with the hybrid. You have talked about custom officers moving up in ranks, some retiring. As far as the understanding that is being brought to the full, right.
I am getting the impression that should the government and those in authorities start looking at getting mechanics and engineers into the customer and excise division so that when we are dealing with these type of scenarios, they are learned individuals in that specific field that can attest, okay, this is a micro hybrid, a mild hybrid. This gas, this is a gasoline engine, a four cylinder, a six cylinder diesel engine, whatever it is, they have a better understanding. Because what I am getting is that you're having persons in these divisions that are imposing taxes. And it appears to me that is it is subjected to each individual's understanding of the law and they met and they deal with the public accordingly, even if it's unfairly done. So what are your. Have you all had any conversations with the minister going back? I mean you, you should think in that direction because if you're saying that these people, when they finally get an understanding after what this is, because you all explained it, they either retire or move on. You get some young ones coming in from school, they now get into Customs and Excise, they don't have a clue. They be a piece of paper. They don't even understand 100 what they're reading. They just know that this vehicle come in, that'll put taxes, that'll do this.
Could we look at getting mechanics in?
[00:12:02] Speaker A: I mean, I mean I can't speak to how the government want, that wants to hire and hire persons, but I mean your suggestion is a worthy one. You would want somebody with some kind of. Even if it's in a reference capacity, you understand and you refer to figure out or to get a better understanding and somebody that is knowledgeable too. Not just somebody who has a name and the person that has experience, as I said, and has some kind of credential.
That's right, correct. The validate that their credentials are worthy. So yeah, I mean, I mean maybe even hiring to the customs Department referral, I don't see an issue with that. I mean definitely that might help clearing up some of the issues on an additional to that too before making some of these knee jerk decisions that you have consultation because if you cons, if this was, if there was a consultation before from Customs then as I say, some of the issues that we're raising now or some of the, the clarity that both sides needed, both parties needed, it may have been discussed and hashed out which like a lot was done. We're still in the middle of it. It isn't over as yet but at the end of the day the discussion would have started. I just, I just want to pitch back a little bit to the, to the insinuation of the gentleman of if you buy a hybrid car now, what happened to the next 20 years? I wonder if he understands that Trinidad and Tobago manufacture cars and if he's looking at the world and the type of vehicle that the world is beginning to manufacture.
We are importers of cars. So at the end of the day, if you in the next 20 years a petrol vehicle might be obsolete. So for sure it might have no value at all. At the end of the day, let's look at the transition of cars that were gasoline that the manufacturers have gone either E power or hybrid. You're talking about the axle, you're talking about the feeler, you're talking about the Nissan Note, you're talking about the Nissan X Trail. All of these vehicles that were deemed common, the normal Nissan X trailer Note we knew 10 years ago is no longer gasoline is E powered now you understand. So the thing is if you don't get on the train with the world and the manufacturers are going then the vehicle you have that is might be become obsolete. You might have a gasoline. I might be viewed then as all we view CNG now. So you know sometimes I just like to not, not, not to be combative to the gentleman but you know, to edify, to educate.
[00:14:22] Speaker C: Yeah, but, but, but as we deal with, with what is taking place presently, I mean I understand what you're talking about futuristic and years to come. But do we have a resale value for electric vehicles are talking about full EV and not the, the, the, the hybrid ones. I'm talking full ev, full EV vehicles. Do we have a resale value for these vehicles?
[00:14:42] Speaker A: I mean at the end of the day talking about EV now being introduced into the country for the last three or five years, three to four years if so much as yet. You're gonna at least see that in about, I would say a year or two, you understand? And I think it will. These are some concerns that was raised on the hybrid as well. And now you're seeing people, black people buying foreign used local use hybrid vehicles. So I mean I'm not concerned as I say when it comes to that. If the world is going a particular way, China is going fully electric. India is, has gone electric and hybrid. All of the countries, Thailand, the only country that seems to want to really bring back fossil fuel is the United States under the current administration. Well, I mean.
[00:15:24] Speaker C: Okay, where are we now Mr. Babwa with respect to the taxes? That as you mentioned is nothing new but it's an ongoing conversation that is happening with taxes on motor vehicles. Where are we now? Where what, what are some of the things you were able to hash out or even go back to the join board on when you had that meeting yesterday with the minister and his team.
[00:15:46] Speaker B: Right.
The customs made some decisions for the past two weeks that again without conversation, without any sort of discussion or notification, they impose a tax overnight which was based on the gasoline car of that engine size. Because their decision was, and their interpretation of the law was that this mild hybrid will be classified now as A gasoline car. So with all the taxes that you'll pay for a gasoline car, they say you have to pay that. They held our documents from the past two weeks. They released the cars, but held the documents. So you're unable to sell the car and license.
And now they are planning to those cars that came in before.
Well, I understand they had another legal notice last week, Thursday. That is what we understood yesterday. So before that legal notice, we're going to be charging taxes, kind of retractive, which again is wrong.
[00:16:44] Speaker C: But then, but then we had the
[00:16:45] Speaker B: discussion with them and, and they were.
Yeah, and they, and they were. The document that they bought in there as what Mr. Fields, I said was the one from the Serena, which was the document that they were referring to. And we were able to kind of give them some explanation and tell them this is not the scenario with these new hybrid cars. And then they requested that we send some new documents in. And we come in this morning for a meeting with customs themselves, which is something that should have happened before all this took place. And this is what we keep saying. So this morning in this meeting now, we will have to show them how to, how this vehicle works, how it, how the, the motor might have new technology nowhere. So a lot of people might not understand. They say mild hybrid, but in the mild hybrid they have a internal starter generator that works as a generator and it also works as a moto. Right. This is a new technology. Everything has, you know, keep changing. And the motor that, you know, might be a motor could be defined as something different with, with a motor also acts as a moto.
So we, they requested some document and we have to go in this morning, Davy, and have that discussion with them and then see again how, how they will deal with this matter.
[00:18:00] Speaker C: Rondell engine sizes does play a part in how they tax the vehicles and what have you. We understand that part. Help the listening audience, those in the maxi taxis right now, to get some kind of appreciation as to, as to these mild hybrids, half engine kind of vehicle, half EV vehicle, so to speak. If you want to bring it down to layman terms, what size engine does the Fielder, the. The Serena, the X Trail, any of these are hybrid vehicles. What size engine, what CC engine do they come with?
[00:18:33] Speaker A: That is the beauty of the combination of the electric motor with the engine. Some of those vehicles that you're talking about, like The Serena was 2000cc, was 2000cc. So they were out of the reach of particular persons because of the taxes on those and the tax bracket, when you cross 15, 99cc is astronomical, but because they have been now combined with that electrical support, the CC rating is significantly less. So you're seeing these vehicles now at 1499 CCS. So that's specifically why you might see men now driving Highway Star Serena that E powered. You're seeing more people driving the E Power, the E Power X Trail. Some of these cars, when you're thinking about buying the full gasoline model, when there was a full gasoline model, because some of them don't have the full gasoline model anymore, as I just alluded to, you couldn't pay for it because you were talking about being in a tax bracket that was astronomically high.
So I love that point that you brought up there because it shows the value of these vehicles now becoming hybrid vehicles so that there's less need now for that engine torque because you get that torque assist or that torque support or that direct torque propulsion from the electric component that's on board.
[00:19:55] Speaker C: But do you think government understands this? I mean, I know you guys are going into this meeting this morning and I want to wish you all the best and success with it because when we look at the prices, I was told recently at a hybrid conference in the west that the EV vehicles are heavier than the gasoline and petrol vehicles, the fossil fuel cars, they are heavier, the cost of production is higher, so to speak. So that when they are being imported from China and other parts of the world and it's coming to Trinidad and Tobago, you find yourself buying a car that is taking you. You don't have any engine because it's full ev, it's an electric vehicle, but you are spending well over quarter of a million. You're going into 350 something thousand dollars to own this car that doesn't carry an engine.
Now the price being paid for it on the open market to bring it in the country is significantly low per se. However they say when it hit here is high taxes. How is that possible? Has the government and the minister able to explain to you all why this is so? Or was it an error and an oversight?
[00:21:07] Speaker B: Well, Davy, I can understand people concerned, but Remember on an EV, on an EV is only when the CIF value is over $400,000, then you pay taxes.
Under that, you don't pay any taxes. So. And of course people have a choice. If they want to buy a hybrid, they want to buy a. You can still get some gasoline cars. If they think that an EV is too costly, then they have a choice. But another thing, with an ev you have to take into consideration when you purchase an ev, you have an upfront post, right? But your daily or weekly or monthly gasoline bill discount appears like from putting $1,000 gas a week or $500 gas a week, you might pay $20 per charge if you're charging your car. So if you compound that over six, seven, eight years, if you're paying $1,000 a month in gas for, for a year, you'll pay $12,000 for 10 years, $120,000, right? When with a gasoline car you will have that, that bill to pay weekly, monthly, whenever I feel, whenever I feel. And you'll also have servicing to do. So you have to understand that this course and where people say the car is extremely costly, of course it costs a lot more to build an ev, an electric car, hybrid car, because that battery is very costly, right? The, the, the material that is used in that is a costly material. So you have to, when you're talking about price, you have to also talk about the run on effect, the day to day running cost that you have fully eliminated. And that is something people must consider that when you're buying electric car, you know, your day to day going to gas station full and gas that gone and the cost to manufacture these cars is extremely high. Of course you have to understand that you will see the cars cheaper in other countries, you know, but you have to also take into consideration when people bring cars here, they have to give a warranty. A battery may not be so cheap, right? A battery for an ev. So you have to factor all that in if your warranty goes because you get much longer warranties on these cars. Also you're getting eight years warranty and take only batteries and taking these cars. So you have a warranty for a much longer period, right? So, so, so these are the, are the points that persons must take into consideration when they're making these statements and they must be educated, you know, a little more gallima knowledge how the automotive industry has changed and we are just an end user. So we have absolutely no say in what the manufacturer manufacture and we have to purchase and sell what they manufacture.
[00:23:47] Speaker C: What are we hopeful for to come out of this meeting with the minister that you all are revisiting this morning?
[00:23:54] Speaker A: Well, I mean I'm definitely hopeful that there's going to be resolution. We're going to come to, I mean to the only factual understanding of what the interpretation that has been there, what the interpretation understanding on how a mild hybrid operates and works. And I think then we would have no issue going forward. I mean we have the data, we have the evidence that supports our claim. They have produced evidence that in my humblest respectful belief, I believe that they have produced evidence based on the document that I was given yesterday that one speaks to a judgment pertaining to the micro hybrid, which is, which is a vehicle that is not up for discussion right now. And also two, a world customs order code that passed that spoke that a particular vehicle that I consider that they are classifying the micro hybrid as also. So I think, I mean once we sit today we have discussion, we present our data that we have where it shows that these cars, the ISG component or ISG device rather does contribute and we show does contribute talk to the propulsion of the vehicle.
I can't see that we are in any disagreement with what the legal notice has made legitimate to receive exemption. One of our problems, as I said, there are a lot of. A couple of dealers, some of them who are not under the organization, who are going to social media, who are not aware, not informing the public property and not even making our position when we go to, I mean to consult with the other parties because then we need to, we have to explain that they don't understand what we're talking about. Because as I said, this is not a new tax. This is just a misinterpretation of our existing legal notice.
[00:25:49] Speaker C: Just as we get set to wrap the interview this morning, one texter says most useless interview. No figures. Customs on Customs charges 20%, dealer charges 40%. What is the difference with the charges between custom, what custom would charge and what a dealer would charge? Because there's a misconception or there's a notion out there, let me not say misconception, but there's a notion out there that, that dealers markups are significantly high as opposed to what they will pay for the actual vehicle and importation and the custom charges.
[00:26:23] Speaker A: All right, I mean, I don't know what to say.
Firstly we, we don't apply taxes to cars. So long and short of the story, if custom duty is 20%, we can't charge 40%. But I, but I'm. Let me play, let me just roll with the punches and I guess he's trying to say that dealers markup cars too much and we don't like them. At the end of the day, as I always say as a business person, if you are a business person and you have made an investment, you're procured us, which is like gold to find. You have staff to pay, you have mortgages to pay, you have expenditure. And that's why, you see, I always blame this on our, our, our failure to, to educate our citizenry on financial literacy. Because if we do that, people will understand what it takes, it takes to run a business. You have a warranty to supply as well. You have employees to pay, you have utilities to be, and that's it. You have taxes to pay. You understand generally income taxes, all these things. When you run a business, it's not just on a one car, by one car. It's about your holistic business and what your business needs to sustain itself, to be successive and you could and, and to be successful. And many persons who don't have that understanding of our business most times look for it on a car by car importation. And this is why I always encourage people, if you have an issue with a business making a profit, the government has made provision for you to import a vehicle for yourself where you will be able to eliminate a dealer, eliminate whatever markup he has, but you will take all the risk on your hands. So if you buy a vehicle and the vehicle is a dot and the battery don't roll, that's your risk to take. So it's a very unfortunate and unfair position when people believe that you are to invest significantly. You are to procure us at very hard, hard measures, hard times. And then you must just say here, what boy, I am going to give away a vehicle?
The thing that keeps this business very competitive, David, is that we have almost 400 dealers here. So at the end of the day that we are 400 dealers and that at any time persons regulating their prices will cause prices to fall. You see it in the market all the time. So I mean, as it any other business, the new car industry, even if you're talking about bread, people don't sell bread daily. And they do make a profit on the bread they're selling you. Sometimes they're making double the amount they cost to buy the bread. But because they could pay $20 for the bread, you don't mind paying for it, you're not studying it cost them $10.
So I mean that's just generally to say that we cannot make an excuse for being a business. We cannot make an excuse, be an excuse for turning our profit when there's such a significant output and expenditure involved.
[00:29:10] Speaker C: Well said. And I cannot shoot dong anything on that level.
One texter is asking me who is repairing EV cars, if you could quickly tell us a point in a direction. And they also asked, does your association represent all or just a percentage of used car dealers? Well, I think you just answered that, that because not all used car dealers are in the association summer.
So in terms of repairs and Davy,
[00:29:38] Speaker B: we advocate that a lot of person who's selling these cars should have the capacity, the technical knowledge and the persons to repair the cars. So you don't want people just selling cars and coming back to the point field. Just make Andy, the text. I just told you that the cars, the profit margin and things like that, right. You maybe you could get a car cheaper by someone, but they don't have the capacity, the capability to repair the car. So persons that have to send people for training on these cars and things, they will pay for that training. That training is not free.
[00:30:10] Speaker C: Understood.
[00:30:11] Speaker B: And.
[00:30:11] Speaker C: Yep.
[00:30:11] Speaker B: And understand that. So. So whenever persons purchase a car, they could find it from the individual. Are you repairing these cars? Do you know someone? Can you recommend someone? And I can personally recommend technicians to repair cars for individuals.
[00:30:28] Speaker C: Final question for you coming from a text in Las Lomas. Is there any radiation being in these full electric vehicles?
[00:30:39] Speaker B: Radiation is not a concern. These vehicles don't have high radiations because these vehicles are tested in first world markets. Right. You have an electrical component, like using any electrical device. There's a very low level that you'll get from anything you use in your phone. You might get more radiation than from a car.
[00:31:00] Speaker C: All right, thank you very much, gentlemen. We have to leave it there as we are out of time.
I must say thank you so much for coming and sharing and clearing up some of these issues because a lot of persons have concerns when it comes to these electric vehicles. And good luck this morning. I think we will have to talk to the producer and revisit with you guys early next week to find find out the outcome of this meeting and how it will benefit citizens attempting to bring in cars or even purchase cars from these dealers. Thank you very much Mr. Babwa and Mr. Rondell Fields.
[00:31:28] Speaker B: Thank you very much, David. You have a nice day.
[00:31:31] Speaker C: Same to you, Rondel. I'll be calling you later this morning.
[00:31:33] Speaker A: No problem, my brother.
[00:31:34] Speaker C: Have a good one, buddy. Take care.
[00:31:36] Speaker B: All right.
[00:31:37] Speaker A: The best insight, instant feedback, accountability. The all new Talk Radio Freedom 106.5.
