Auto dealers are only selling half the number of vehicles they did three or four years ago and are bracing themselves for a tough year ahead.

That is according to Michael Butler, the newly-appointed chairman of the Bermuda Automotive Distributors' Association (BADA) and general manager of Bermuda Motors, who told The Royal Gazette in an exclusive interview that on average 80 to 90 vehicles per month were sold by dealers this year compared to 200 in 2006 or 2007.

He also fears that if their current plight continues many dealers will be forced to make job cuts just to survive.

Mr. Butler, who took over his new role from HWP Group president Jonathan Brewin for the next year, has been focusing on bringing the industry together and dealing with the wide-ranging issues affecting the industry as a whole.

Motor vehicle stores sales plummeted more than 30 percent during August due to a weak consumer demand for the current inventory of model, according to the Department of Statistics' Retail Sales Index released last week.

And Mr. Butler attributes the big drop to the impact of the recession with car sales in decline since 2007 — and he does not expect much improvement over the next 12 months.

"Car sales since 2007 have halved and what we are seeing now is 80 to 90 new vehicles going on the road whereas three or four years ago it was almost 200," he said.

"At least for the next year I see them staying exactly as they are. There is a possibility that after 12 months they may start rising, but we need a boost in the local economy for that to happen.

"As long as people are losing jobs they are not going to be buying new vehicles because, let's face it, they are expensive."

Mr. Butler said that BADA had made a presentation to and met for talks with the Ministry of Finance aimed at getting some relief on car import duty.

The argument is that this could stimulate the industry by helping to increase sales at the same time as boosting Government's own revenue, while bringing down the price for the consumer.

He said that the industry was currently in "survival mode" having to support an infrastructure, staff base, inventory and service provision that was previously sustained by a sector that was twice the size.

"The solution in the long-term would be to get the economy back on track again, to get everybody fully employed, and to get some economic stimulus so that people can afford to buy new cars," he said.

"In the short term a relief on car duty to bring the price of cars down, but if prices stay the same I can see us shrinking the total number of cars on the road."

Other incentives, he said, could include duty relief on diesel vehicles, which are more eco-friendly and give more miles to the gallon than the internal gas combustion engine counterparts.

Mr. Butler admitted that despite the interest in electric and hybrid vehicles, currently there was no economically viable mass-produced electric vehicle that would suit Bermuda's market, but he hopes to bring in the new BMW electric car, which does more than 100 miles per charge, in 2012.

The main focus internally has been on retaining as many staff as possible, particularly Bermudians, said Mr. Butler.

"We have been trying, as an industry, to keep everybody employed and not let anybody go," he said.

"This has meant that some companies within our industry are actually working on a shorter week rather than let people go.

"How long we can maintain that position is difficult to see. At this moment in time nobody is making any money in the industry because there are not enough vehicles going out on the road to sustain them — at best we are only breaking even, but the reality is probably worse than that.

"My fear is that we can only do it for another three or four months and then unfortunately things would have to change."

Mr. Butler said that a number of other factors such as the rising price of oil and the cost of manufacturing, particularly in light of the economic downturn, had been passed on to the dealer and in turn the customer.

The other challenge has been sourcing highly qualified staff, often from overseas, to service the vehicles, with the need for more technically astute workers in the future due to the shift to electric models, he said.

Bermuda Motors has managed to hold its own, with the success of its Kia models — the biggest selling brand on the Island — and the appointment of a new after-sales manager to improve customer service.

Meanwhile sales of the Mini, which was launched in November 2009, have exceeded expectations so far, according to Mr. Butler.

The company is expecting to take delivery of the new Kia Cerato at the end of this year and will also be stocking the new four-door Mini Countryman.

It has added another component to its business with the launch of its new Kymco Bermuda showroom in Washington Mall III, Hamilton on Friday as it diversifies into the motorcycle market, selling everything from bikes and accessories such as boxes, rain suits and helmets as many people downsize from cars to smaller forms of transport, with Mr. Butler describing at as an "investment in the future".