By Rebecca Zuill

Motor sales are on the upswing, the June Retail Sales Index, released yesterday, shows.

The beleaguered ‘Motor Vehicle Stores’ category was among the worst hit sectors during the economic recession, and since the index base year of 2006, only started to see improvement in 2013 when it grew just 1.1 percent.

This year, however, the sector has seen double-digit percentage growth in each of the first six months. February saw the largest number year-over-year, increasing 42.3 percent. June saw total improvement of 32 percent — but this brought sales up to only 51 percent of 2006 sales. The index has hovered between 50 and 60 percent all year.

Motor dealers agree that sales are picking up and they point to demand in all areas.

Glen Smith, managing director of Auto Solutions Ltd, said: “Compared to last year, as of today we have sold the same number we sold last August. So we’re on a par, and there is still another couple of weeks to go.”

Auto Solutions expects to beat last year’s numbers. The auto dealer executive, whose company is one of Bermuda’s newest and largest, sells ten car brands including Suzuki, Nissan, Mitsubishi and Volkswagen. He said: “We are doing well for the month.”

Mr Smith explained how the flailing economy had impacted car sales. “In 2007 we started to have a quiet exodus of our guest workers, with the six-year debacle regarding term limits.” Ultimately, with Bermudian residents also leaving, the Island lost about 6,000 people, he said.

“It created a second hand car market — executives were selling their cars and creating the second-hand car market. Bermudians and overseas workers were buying those second-hand cars.

“Then, you had the recession. We were hit with a double whammy,” he said.

“Now, you have second-hand cars from 2007 which have come to the end of their life cycle. Locals and overseas workers are buying new cars to backfill the market.

“We have seen new arrivals to our shores in executive positions in the last 15 or 16 months. We have sold a number of cars in the high 50s to new residents, which is a good sign — a good sign of people coming to our shores. They are executives, accountants, doctors — that’s what’s we have. So we are starting to see that.”

Mr Smith said Auto Solutions is also seeing good sales specifically in light commercial cans. “We’re having to replace these vehicles because they are coming to end of their cycle. It’s people in the service industries, FedEx, UPS, plumbers and painters who are buying them.”

Mr Smith speculated an improvement in real estate sales and associated property improvements may be helping to drive those sales.

Additionally, Auto Solutions is seeing taxi sales improve. “From November through July, we have sold 26 or 27 taxis,” he said.

“For us, now in the car industry, we are going in the right direction.”

Richard Davidge, the president and owner of Prestige Autos Ltd and Eurocar Ltd, was not as optimistic as Mr Smith.

He said the 2014 numbers versus the 2012 numbers are better. “But they’re still nowhere near the 2006 numbers we were used to. But it is going in the right direction.”

Mr Davidge, whose dealerships represent Dodge Jeep, Mercedes-Benz and Renault, said: “We are selling a few more cars. The beginning of the year was not great, but we are seeing an upward incline.”

He said his customers demand a range of vehicles, and he finds that some people are looking for larger cars than Bermuda allows. The two auto dealers are seeing some new residents who are looking for cars. “And we’re also seeing people who are replacing their cars,” he said.

“With sales, you see the ‘A’, ‘B’, ‘C’, and ‘D’ size cars are quite high, and the ‘G ‘and ‘H’ are also quite high.

“The market doesn’t have large enough cars for people with families, which is an issue,” he said.

Amy Greenslade, marketing manager at Rayclan, said: “Our ‘A’ class cars have been big sellers, and have held us through.” Rayclan, which carries the Chevrolet brand, sells the popular, compact Chevrolet Spark.

It is new models that drive sales, she said. “If you have a popular new model, you will see a massive spike.

“What happens with sales is that people will hold off until there is a new model.”

She also pointed to the limitations imposed by legal size restrictions as an issue for car dealers. “With the one car rule, and if you have a big family, what we classify as a big car would be a second car in the US.”

She explained that although the size of car may be among our biggest at an ‘H’ or ‘G’ class, that does not reflect a large quantity of space in the interior of the car.

The situation is unlikely to change. “We can’t be very demanding of the manufacturers, because we don’t sell enough cars,” she said.

While they sell ‘A’ and ‘B’ class Chevrolets, customers express interest in the brand’s larger model — which are too big for Bermuda. “We can’t bring them in,” she said.

Ms Greenslade said she was aware that taxis were in demand, and there was also a need for small dump trucks. “Not many companies make them,” she said. “And people are looking for trucks and vans as well.”

She said: “We’re always on the lookout for new vehicles for Bermuda.”