Jamaica's auto dealers still expect that Peter Phillips' tax policy will eat into sales, but right now, business is up.Between January and June, motor vehicle sales rose 64 per cent, according to the Automobile Dealers Association (ADA), which says it expects the trend to be maintained to yearend, if somewhat at a slower pace."Last year was not one of our best years. When the duties changed, we didn't have much stock either, so the sales did not increase immediately," said ADA chairman Kent LaCroix."But even so, that was not our worse year because last year we had a 34 per cent increase over 2010 for the same period, and this year, we are seeing about 64 per cent over last year."However, he is less optimistic about the second half of the year, reasoning that he expects sales to fall off mainly due to the recent increase in duties for motor vehicles with engines larger than two litres."Nobody expects the pickups to have an increase because they are for the productive sectors. Many companies use them in their fleet and when you consider the conditions of our roads the pickups are better. The sale of the vehicles that are not affected by the duties will not change though," LaCroix said.Phillips, the minister of finance, increased the common external tariff (CET) by 10 points, from 20 per cent to 30 per cent, for motor vehicles with engines bigger than two litres, including SUVs and pickups, to finance J$1.95 billion of a J$19.5 billion new tax package.The sellers of used vehicles are seeing similar trends. Sales are up 30 to 40 per cent, but the Jamaica Used Car Dealers Association sees almost no silver lining.JUCDA president Lynvalle Hamilton said the sector was "on the brink of dying" last year and was only "saved" by the reduction of import duties."Right now, we are allowed to bring in 2007 cars and 2006 light commercial vehicles. Next year this will not be so − we will be bringing in 2008 cars and 2007 light commercial vehicles. As we draw closer to the end of the year, these prices for the 2007 cars will fall because the suppliers will not be able to hold their prices, because we will not be able to import them after since we would be at the cut−off point with the age restriction," said Hamilton."If they hold on their prices, then they are stuck with them and they will not be able to sell them."The CET was reduced from 40 per cent to 20 per cent last November. Used−car dealers also got an added boost when the motor vehicle policy was adjusted to lift the age cap on imports from four to five years old; and from five to six years for light commercial vehicles.Hamilton said that cars with engines of 1.5 litres to 2 litres and priced below J$1.5 million are the used−car dealers best−sellers and include models such as the Nissan Tiida, Toyota Corolla, Toyota Noah and the Mazda Aztella.The Honda Fit and the Mazda Demio, with engine size 1.3 litres to 1.5 litres, are also selling very well, he said.The used−car dealer also said that there has been significant reduction in the price of cars from the beginning of the year, by about 20 per cent, and more reduction could happen later in the year, at least for the 2007 models."We are not certain as to the how many cars are on the market in Japan. The plants are back up and running and persons who were holding back their cars are now releasing them to the used car market, so right now there are a lot of cars on the market. There is a lot of supply on the market, we don't know how much is available there but if the stock in Japan is going to get low then the prices may increase. But I don't think the stock is getting low" he said."There is no guarantee that prices will fall off later in the year, but there is a possibility," Hamilton said.LaCroix was unable to immediately provide sales volumes of vehicles sold in the first half of the year, but he notes that the industry is still performing at levels well below the pre−recession period in 2008.In 2011, ADA members sold 4,623 cars. If the 64 per cent trajectory holds, sales this year could top 7,500.marcella.scarlett@gleanerjm.com