The Kiribati government's car agency, Public Vehicles Unit, or PVU, is struggling to survive amid financial difficulties.
The officer in charge, Arimwaere Tambwereiti, says they have laid off 20 employees and more will go later this year.
Mr Tambwereiti says PVU's main role is to replace government cars and to purchase other heavy plant for government.
But he says it is losing business as government ministries and companies import their vehicles through other agencies.
The importing of government vehicles was opened up to private car dealers when the previous government passed the Procurement Act in 2001.
Meanwhile, the Ministry of Works, which oversees PVU, has indicated that there are plans to corporatise the agency so it can compete with the private dealers.