Bereng Mpaki
Import car dealers in Lesotho have come a long to where they are today.
This is the view of the president of the Import Car Dealers Association of Lesotho Mohamed Razeen, who said most of their members were working hard to get their businesses in order.
Speaking to the Business Journal this week, Mr Razeen said the association, which was established in 2013 with the intention of addressing common interests of import car dealers in the country, has helped most of its members to conduct their businesses legally.
The association currently has over 30 members. This is down from around 80 following a clamp down by the law authorities.
A number of import car dealers were in the past notorious for being in trouble with the law for failing to pay tax, and as a result often saw their stocks being auctioned by the tax authorities in order to recover the outstanding dues.
“Before we established this association, many of our import car dealers encountered a lot of problems with the law authorities because being predominantly foreign nationals, they did not understand many laws that govern trade in Lesotho.
“But today almost all of our members are abiding by the confines of the law. It is work in progress and we are working to ensure we do business legally,” Mr Razeen said.
The dealers are targeting lower to middle income earners in Lesotho, who are said to constitute a larger portion of the population.
Mr Razeen further indicated that one of the common challenges they faced in the past, and which influenced the formation of the association, was theft, although it had since subsided.
He said they were also encouraging their members to be good corporate citizens who were not only interested in business but also sharing their wealth with the community around them.
He said a number of charity activities have been done by their members including donating blankets to the needy and sponsoring sport teams.
“The existence of the association has also improved communication between the industry and its external stakeholders.”
On the proposed new regulations the government intends to enforce which seeks to block entrance of unroadworthy car imports into the country, Mr Razeen said while that was a noble gesture, it could hike the prices of car imports which would in turn make it difficult for many people to afford them.
The association has suggested that the government rather strengthen its vehicle inspection efforts as a control measure.
“We would also like to advice the government to inspect cars each time the car dealer licenses are renewed, to ensure the dealer has roadworthy vehicles in his stock,” he said.
The government this month has also issued a notice to inform cars dealers to have proper shelters or showrooms for their vehicles. The government indicated it had observed that many car dealers had been flouting the law in that regard.
In response to that, the association said its members do not have a problem to do that, although it was difficult to develop most of the sites on which they kept their stock as they were rented from leaseholders.
“We have addressed our members about this issue and some of them already putting up shelters. But you have to understand that it is not easy for most of them since the sites on which they keep their stock is rented from landlords and therefore they cannot just start erecting structures on,” Mr Razeen explained.
Another challenge the import car dealers encounter is the entrance of illegal traders in the market who conduct their without having any trading licenses.
“Illegal traders are unfair to legal traders since we are paying taxes for development of the country while they do not pay anything. This is also unfair to us since we are competing with them for the same market. It would be good for the government to look into it because it is also robbing them of the much needed tax for development of the country.”
Mr Razeen estimates that the car import dealers have contributed about M400 million to the country’s economy by way of taxes since the import car boom hit Lesotho in 2009.
The association has also called for clients to buy cars from bona fide dealers locally instead of importing them directly from Japan as this had its fair share of problems.
“We would like to advice clients who are looking to buy imported second hand cars to consider our local dealers and not to buy them directly from overseas, because such cars are likely to give them problems, in which case the client will have nowhere to take their complaint.
“When clients buy from our local dealers, they are able to choose a physical vehicle they can test drive before paying for it. Also, our local dealers offer after sale services whereby they can help to address any challenges that a bought vehicle may have.”
The association also argues that supporting local dealers helps to create more employment for Basotho and money is able to circulate within the economy rather than go out.
The dealers are also planning to increase the number of spare parts dealers in order to facilitate easier repair of import cars.
There about four dealers of import car spare parts, but we are planning to have more so that clients do not struggle to repair their vehicles.”
Despite some of the challenges the dealers have had with their operations in the country, Mr Razeen said the car dealers were not feeling lost although they were foreign nationals.
“We do not feel like we are in a foreign country but it feels like we are in our home country. The tax authorities, the police, and the immigration department have been good to us,” he said.