11 August 2018

Lesotho: Car Dealers Adhere to Govt Directive On Showrooms

Local car dealers have largely adhered to government's directive to erect standardised showrooms and shelters to stock their vehicles.

The directive was issued by the ministry of Trade and Industry in April this year in line with the Trading Enterprises Regulations of 1999 as amended in 2011. The ministry said this would ensure that the cars are not damaged by adverse weather conditions.

The dealers were given until 31 July 2018 to comply, after failing to meet a 30 June deadline that was imposed in April this year.

A snap survey by the Lesotho Times this week revealed that only a few dealers are yet to comply with the directive.

Lihaelo Nkaota, the spokesperson in the ministry of Trade and Industry said they would soon embark onto an inspection exercise of dealers' premises before they come up with punitive measures for defaulters.

She said decisions would then be made based on the findings of the inspections what fine would be imposed on defaulters. She indicated however, that dealers could be deregistered if they are found to have defied the regulations.

Earlier this year the ministry informed dealerships they were expected to erect shelters or showrooms in which their vehicles can be safely kept from harsh weather elements, in line with the Trading Enterprises Regulations of 1999 as amended in 2011.

The ministry's directive was passed after it noted that traders were selling defective vehicles some of whose damage emanated from harsh weather elements that the cars are exposed to.

"The next step is to undertake inspections of the dealerships to assess whether or not they have complied. That process is yet to commence," Ms Nkaota said.

However, traders see this new enforcement as the government's way of reducing the number of vehicle imports by the public. The traders say this is the government's way of arresting the incessant congestion on the country's dwindling road network.

Traders who spoke to Lesotho Times on conditions of anonymity for fear of retribution, said the move poses a serious threat to small dealers who may soon be thrown out of business. One trader said the dealers do not have the necessary financial muscle to erect the necessary infrastructure.

"The requirement by government is unkind to many smaller traders because it adds to their costs of doing business. Small dealers like us find it very difficult to comply with the requirement because we do not have funds lying around. This also means that whatever cost we incur is going to be passed straight to consumers," the dealer said.

Another dealer said the ministry of Trade should instead be focusing on empowering locals instead of frustrating their efforts to create jobs.

"It is a frustrating process which is actually an impediment to small entrepreneurs. However, for those dealers with deeper pockets it is not an issue at all. You can see the rate at which new dealerships have mushroomed around the country."

The ministry also indicated in June this year that for second hand vehicles, import permits would be issued under strict conditions after the deadline.

"The issuance of import permits, to motor dealer license holders for used vehicles will also be strictly preceded by inspection of the business premises in accordance with law (1999 Regulations). Import permit will not be issued unless this requirement is met," the ministry of Trade said in a statement in June this year.

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