Sri Lanka records increase in motor vehicle purchases with focus on small motor cars
Statistics of the Department of Motor Vehicle Registration of Sri Lanka has reportedly revealed that the country’s vehicle purchases have risen 6.5 percent in March 2018 from a year earlier.
According to data reported in the media, car registrations have increased 107 percent to 5,968 units with Suzuki Wagon-R becoming the market leader after a tax change.
In March 2,380 Wagon-Rs were registered up from only 626 a year earlier, JB Securities, a Colombo based equities brokerage has been quoted as saying in the local media.
A local media report stated that Indian-made Maruti vehicles were market leaders before Mercantilist crackdown on car imports after the Central Bank triggered a balance of payments crisis by printing money in 2015 and 2016. A recent tax change made Wagon-Rs more affordable.
“Maruti Alto recorded 17 units in the month, as a point of reference in Sep 2015 there were 7,556 units registered – another case of how government policy can tilt the playing field so precipitously,” JP Securities has reportedly said in a note to clients.
“Under the unit method of duty the taxes on a 660 cc hybrid engine found on most Japanese small cars is LKR 825,000, on an 800cc Alto it is LKR 1.4 million although the landed price of the former is probably 50% less.”
The increase in the registration of motor vehicles, especially small fuel efficient vehicles indicates an opening of a market for vehicle sales. The Sri Lankan government has also taken measures to reduce taxes for small fuel efficient vehicles in order to make them accessible to the increasing middle income population in the country. Therefore, there is a business opportunity for an interested party to engage in the import and sale of small cars.
|Article Code :||VBS/AT/23042018/Z_2|