Influx of used cars undermines sales



MASERU – The ever increasing number of ex-Japanese car dealers in the country means the market could soon be saturated which will negatively impact sales and possibly force some dealers retail their stock at very low prices.

Day to day business is no longer the same even for those that have been in the industry for a long time. However, credibility and honesty remains their best weapon, dealers told Public Eye.

According to Be-forward, a popular Japan-based import car dealership with an office in the country business has been on a downward spiral since late 2017.

However, the situation has been improving lately thanks to the trust and loyalty from most of the company clients.

“We have been in business for a long time and it is true that competition in this kind of business has been getting more intense with more and more players popping up lately but we are still going strong any way. Luckily, most of our clients come back to us because they believe in us.

“We try as much as possible to be open and give out all the necessary information unlike other agents who sometimes take advantage of customers, particularly when it comes to issues of warranty of the car and whether such car has an accident history or not. We do not want to impose things on our clients,” said Moelo Mpholo, the sales and marketing manager at Be-Forward in an interview with Public Eye on Tuesday this week.

Statistically Mpholo revealed that for them sales started dropping in in 2018, citing that under normal circumstances the company used to sell between 250 and 300 cars in a month on average, but the figure has dropped to 195 cars per month since January this year.

The decline in sales, according to Mpholo, can also be attributed to the introduction of a new clearing system at ports of entry by the Lesotho Revenue Authority (LRA) which many agencies say has increased tariffs while making the process of clearing cars much longer.

Some dealers complain that the new clearing system, which saw new tariffs being introduced in December 2017, was introduced without proper consultations by the revenue authority.

Phoka Clearing and Forwarding Agency is another popular company that has been operating in the country for a long time. The company shared with Public Eye some of its concerns, particularly with regard to the stiff competition due to the influx of dealers in the country.

The representative of the company Mokhali Mofubetsoana shared that sales are no longer the same citing that his company also relies mainly on customers with whom they have managed to build trust over time.

“Obviously business will not be the same but we always try to ensure that our clients are satisfied so that they can come back at later. It is true that sometimes we also make mistakes but we always try to be as competent as ever,” Mofubetsoana said in an interview on Tuesday.

As the issuer of import licenses in the country, the Ministry of Trade and Industry has also expressed deep concerns over the influx of players in the past three years, to a point where in 2017 the ministry decided to limit or stop the issuance of import permits in that industry.

“We have been concerned for a long time, particularly because even today some of them still do not comply. We have been running a series of campaigns in the past years regarding compliance but some are still far behind in that aspect,” said Liahelo Nkaota who is the information officer in the Ministry of Trade and Industry.

The ministry is concerned not only by the influx of dealers but also by the fact that some of them fail to comply with the requirements in their line of business.


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