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The Sundaytimes Sri Lanka

Bajaj trishaw sales crash by 50 %

By Bandula Sirimanna
Sri Lanka’s pioneer 3-wheeler dealer stumbles from duty shock
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Sri Lanka’s pioneer and exclusive Bajaj 3-wheeler dealer, the David Pieris Motor Company is stumbling from the current duty shock, forcing job cuts. The sales of Bajaj autos have dropped by 50 per cent following the increase of import duties by 49 per cent in March 2012 making it impossible to survive in the business, company sources said.

Bajaj’s sales in Sri Lanka rose 76% in 2010-11, according to its latest financial results.“We are seeing a (sharp) drop in sales after the government’s duty hike and it has compelled us to retrench our staff drastically,” a top official of the company, who declined to be named, said.At least 200 employees lost their jobs at the Bajaj auto assembly plant at the state-of-the-art factory at Ranna in the Hambantota district, he revealed.

Bajaj 3-wheelers are now being assembled in this ultra-modern factory on 23 acres of land with the total project involving an investment of Rs.2 billion. “By producing three-wheelers locally the company aims to provide more employment opportunities for youth in the area and boost Sri Lankan industry, but this plan is now crashing,” he added.

The company is now experiencing difficulties and hard times but it expects an improvement in the situation within two to three months as the market normally absorbs the hike in duties, he said.  The company has passed on the duty hike, which has gone up to 100 per cent from the earlier 61 per cent to consumers and prices have gone up by 32 per cent, he added. Sri Lanka imports about 10,000 3-wheelers monthly from India’s Pune-based Bajaj Auto and the island nation is the second largest export market for Bajaj Auto, after the Africa continent, he said.

But, he noted that Bajaj Auto of India will also lose as many as 55,000 units in exports to Sri Lanka in the current fiscal year.
Bajaj Auto’s plan to introduce its 4-wheeler RE60 to Sri Lanka has been shelved due to the present uncertain marketing trends, he said.
The 3-wheeler taxi service has become a very popular transport mode countrywide and has created self-employment opportunities for many, as an urban-poverty reducing instrument.

According to the Motor Traffic Department, the registration of 3-wheelers dropped by 6.37 during the first five months this year to 46,471 from 49,633 in the same period last year.The All Island Three Wheel Drivers’ Union, President Lalith Dharmasekera told the Business Times that the price of a Bajaj 3-wheeler has come down to Rs. 445,000 from Rs.515,000 as the company has decided to absorb the duty shock to a certain extent.

However he said the tax increase will badly affect the existing 3-wheeler owners were planning to replace their old vehicle with a new one, and those who want to enter to this business. He noted that his union has suggested to the Finance Ministry to devise a methodology to categorise 3-wheeler taxi drivers and owners currently engaged in passenger transport service and to provide them some concessions to overcome this difficult situation.

He said that as a remedial measure the union plans to form a cooperative society to provide loan and leasing facilities at reasonable interest for 3-wheeler drivers to purchase new ones.“More than 400,000 3-wheel taxis are operating countrywide, with over two million people depending on the earnings from this service,” Mr. Dharmasekera said

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