Auto executives serving the Puerto Rico and U.S. Virgin Island markets agreed Tuesday that the best time to buy a new car and invest in the auto industry is now, as the sector has upheld the momentum begun last year and is on track for improvement in 2012.
Predicting a 3 percent growth this year, José Ordeix, president of the United Automobile Importers Group known as GUIA, told a roomful of auto industry executives that it is currently “the best historic time” to buy a car because of “the drop and stability in interest rates, more aggressive offers and brands capitalizing on the gas mileage of some models” to roll cars off the lots.
In his presentation during the industry’s second annual gathering, Ordeix, who is also president of Nissan Puerto Rico, shared data that reflected a year-over-year 10.8 percent sales growth in Puerto Rico and the USVI for March, making it “the best month of March of the last five years.”
Cumulatively, the market reflects a volume of 23,834 units sold, representing a growth of 7.4 percent growth versus the same period in 2011, when 22,202 vehicles were sold. The car executive added that 64.2 percent of sales registered during the first quarter were split between sub-compact, compact and small SUV vehicles.
Market ‘ripe’ for investments
As a result of improving economic conditions, it is also the right time to lure investments to the island, said Edouard Lafontant, first vice president of dealer relations at Popular Auto.
“In the past 50 years, the automotive industry has become a major focus of attraction for foreign investment in Puerto Rico. All that’s changed are investment trends,” he said.
For example, during the last three decades, Japanese and Korean automakers have challenged major U.S. and European corporations in the global industry, which has had an effect in the Puerto Rico market, he said.
“Today, foreign investment in Puerto Rico’s auto industry is solid and continues to grow due to the competitive advantage in our market,” he said, referring specifically to recent Venezuelan investments in the Kia and Hyundai brands.
“That Venezuelan investment is coupled with the significant investments from the Dominican Republic, Cuba, Japan and the U.S., which in recent decades have dominated the local auto market,” Lafontant said in his presentation.
Venezuelan investors have reportedly pumped $1.7 million in Puerto Rico’s auto market, industry executives said.
Puerto Rico’s auto industry comprises 167 dealers dedicated to new vehicle sales and 10 distributors representing 31 brands. The sector contributes $341 million to the government’s general fund, or 39 percent of all revenue, GUIA data showed.