Statistics: Brand new vehicle sales drop 40 %, says industry
View(s):Sri Lanka’s brand new vehicle sales recorded a 40 per cent drop in January this year compared to the same month in 2012 due to higher import duties, a weaker exchange rate and higher interest rates, motor traders said.
The demand for motor vehicles will be further slowed down as a result of increasing fuel prices recently, Tilak Gunasekera, Chairman of the Ceylon Motor Traders Association told the Business Times.
He added that people will adopt a wait and see attitude before buying a motor vehicle under this set up and this will reduce the tax revenue of the government drastically.
On the other hand, the country’s foreign reserves are depleting due to the importation of luxury vehicles under duty free permits, he said adding that leading motor traders, the franchise holders are surviving on duty free car imports.
The agents for a top Japanese brand said they expected profits to drop 35 per cent this year and their sales were now mostly confined to state orders or those coming from ‘permits’. Around 20,000 super luxury vehicles including 500 Prados are to be imported under duty free vehicle permit scheme, motor vehicle industry sources revealed.
This will eat up foreign reserves despite action taken by the Finance Ministry to jack up taxes on cars to protect these reserves, industry sources said.
Mr. Gunasekera said that the Finance Ministry has jacked up taxes on single cab vehicles to 126 per cent from 7 per cent hitting hard on trucks used to transport goods while maintaining taxes on double cabs at the previous level of 151 percent.
“They should have increased taxes on a fairer platform. This is far too high,” he said. He noted that as the chairman of Ceylon Motor Traders Association he will bring this matter to the notice of the President and Treasury Secretary in writing.
Car registrations at the Department of Motor Traffic have dropped by 58.91 per cent to 1674 in January this year compared to 4074 during the same month a year earlier, department officials said.
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