Automobile retailers have responded with mixed reaction to the latest Retail Sales Index (RSI) for June, which indicate sales in the transport sector have dropped a whopping 15.5 per cent from the same period last year.

As reported in yesterday's Royal Gazette, the RSI fell 6.1 percent in June compared to the same month last year, and compilers of the index - the Bermuda Government Statistics Department - said: "The sharp decline in gross revenue flows for the motor vehicle sector continued to be the contributing factor for the overall decline in the total retail sector."

The monthly report added: "As in April and May 2001, auto dealers were still experiencing low inventory levels which were suppressing sales activity for this sector."

However, Mike Cordeiro from Continental Motors on North Shore (Road) in Pembroke, dealers for the popular Peugeot 306 line of cars, questioned the factors behind the decline in consumer demand for vehicles.

Mr. Cordeiro explained that European and Japanese manufacturers differed in the way they build cars - with the former building to order and the latter building to quotas.

He said Continental Motors had to order their European cars for the Bermuda market several months in advance, and although it was hard to predict, they try to estimate what cars they will need and how many to order to keep a reasonable number in stock. Those dealing in Asian-made cars would have stock more readily available.

Mr. Cordeiro questioned the reasons behind the sales slump - as given by the Statistics Department - and said: "We have noticed a slow down in sales, but this is more reflective of the economy rather than anything else."

He added low inventory levels were not a factor at his dealership, noting he currently has vehicles in stock and a new shipment due next month.

Tim Astley, owner of Eurocar Ltd. who import French-made Renaults to the Island, said that he does have a shortage of cars at the moment due to an overseas problem in the supply chain, but he said this could be linked to a change in the models which often leads to a hold up in distribution.

However, he also said he was expecting a shipment of cars within the next few weeks and they had lots of orders for their cars.

When asked what market forces were at play in the sector, Mr. Astley said that rather than hurting their business, the second-hand car market has helped sales as people can sell their old cars more easily and put the money towards a new one.

"The main problem has been the supply of vehicles which will sort itself out in the next few months," said Mr. Astley.

Operations manager of Hamilton based Bermuda Motors, Anthony Steede, who sell Toyota, Ford and KIA, pointed to yet another reason why sales were slow.

Mr. Steede said they differed from their competitors as their problem was the lack of a product that the customers were looking for.

He said the company had traditionally sold a number of popular vehicles such as the "RAV 4", but since this model has been redesigned, it is now too big for the Bermuda roads.

However, Mr. Astley said Bermuda Motors had not experienced a slow down in sales and added: "If we had that particular vehicle (the RAV 4) we would have been outselling ourselves year over year by two to one."

Geoffrey Gibbons, General Manager of Oleander Cycles in Paget, said he had no problems with inventory but also said his business dealt largely with second-hand cycles.

He estimated that approximately 40 per cent of the company's sales came from new cycles and although he had experienced a slight slow down in sales, Mr. Gibbons thought the large decrease in the RSI was more attributable to a slow down in the car market.

Mr. Gibbons also questioned how the information was gathered; he reported he was not required to submit any sales data and he wondered if Government statisticians simply tabulated the number of new vehicle registrations at the Transport Control Department.

A spokesman from the Statistics Department said yesterday information was gathered from a Retail Sales Survey (RSS) that is sent out each month to a selected group of retailers.

General manager of Wheels Cycles Ltd., David Panchaud, said that many bike manufacturers had changed the way they produced vehicles and it was now more common to order bikes three months in advance as they no longer hold vehicles in stock.

He also said he did not understand why the RSI figure was down so much, reporting his sales had been excellent year to date and he had plenty of vehicles in stock.

Picture: The redesigned RAV 4 is too big for Bermuda's roads.