Three questions to Ibrahim Debach, president of the union chamber of automobile dealers and manufacturers: “The automobile market is under tension”

2023-12-11 10:51:34

Suffering from the upheavals of the global automobile industry, the auto market is under pressure. The disruption in supply chains and the 20% reduction in import quotas for new vehicles have had a significant impact on the availability of supply. Ibrahim Debach, president of the Trade Union Chamber of Automobile Dealers and Manufacturers, gives us further details on a market under pressure.

How is the automobile market doing today, particularly with the decline in consumer purchasing power?

Firstly, I think it is important to consider the situation at the international level. Since the Covid-19 crisis, we continue to suffer from inflation in international car prices and rising vehicle costs, particularly transport costs.

We also continue to experience supply problems because the disruption of supply chains triggered by the health crisis continues even in 2023, and impacts market supply.

In Tunisia, several factors mean that cars are indeed becoming more and more difficult to access for the budget of the Tunisian citizen. These are inflation, the loss of purchasing power and I would say the deterioration of the Tunisian currency even if this year it was relatively less significant compared to previous years.

Vehicle taxes, which were introduced by the 2018 finance law, and the increase in consumption duties by 25% and VAT which rose from 18 to 19%, are also having an effect on the automobile market in Tunisia. We also continue to suffer a supply problem which is due to a shortage, aggravated by the 20% reduction in the vehicle import quota for the year 2023 (a decision taken by the Ministry of Commerce taking into account the Tunisian macroeconomic context). So today there is tension in the market. There is high demand for certain models and brands and sometimes dealers cannot afford to meet the demand. There is pressure, as we know, on popular cars, but also on other categories of car. We know that sometimes waiting times are quite long, reaching four, five or even six months, if not more, and therefore inevitably this shortage can also generate, in certain cases, the effects of speculation and inflation.

Has this situation affected the second-hand market?

The second-hand market is an important market in Tunisia. Indeed, the shortage of new vehicles inevitably has an impact. But when I talked about speculative effects, we can see that these effects even affect used cars. The scarcity of cars means that resale prices remain expensive and can increase very regularly. And it is also sometimes to the disadvantage of the consumer.

Through new tax measures, the government is encouraging the switch to electric cars. But, on the ground, the development of electric mobility faces several obstacles, mainly the deployment of electric charging stations. Is the electric car for tomorrow or is it still a distant goal?

We welcome the efforts which must be considered positively and which have already begun with the 2022 finance law, and which will be continued in 2023, and probably with the 2024 finance law. Indeed, we sense a desire on the part of the government to encourage consumers to move towards electric cars. This is a positive element that must be welcomed. On the other hand, I would say that we still suffer from a lack of infrastructure, particularly in terms of installing charging stations. It is estimated that for every ten electric cars there is a need for at least one charging station.

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The high cost of electric cars also remains an obstacle to their large-scale deployment, despite taxes. preferential rates applied for this category of car. However, I think that, in the years to come, prices will fall and this is the wish of the majority of manufacturers.

I believe it is important to remove certain barriers and bottlenecks. As such, it is important to put in place a pricing system specific to electric mobility, to allow energy companies to be able to sell electricity in the same way as we sell gasoline or other energies.

In my opinion, this is an important element, and it could encourage the creation of jobs, the development of new concessions and the installation of electrical terminals, especially if we know that there is a strong incentive at the level of the Energy Management Agency. The electric car may be for tomorrow, if we actually remove certain barriers or otherwise it risks delaying us. Which is not positive because we know that from 2030, the production of thermal cars will be banned, particularly in Europe. This will inevitably have an impact on the Tunisian market. We remain positive and we are working with the competent authorities so that these barriers are lifted and so that we can support the authorities’ positive measures in terms of tax reductions, whether for electric cars or for hybrid cars.

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