Sri Lanka car sales centres struggle to survive
View(s):Sri Lanka car sales centres are struggling to survive with automobile sales falling sharply due to high import duty, taxes including VAT on imports as well as the refusal of banks and financial institutions to grant leasing facilities, motor traders said
They noted that these taxes including excise duty on vehicles were the highest in the region.
Almost all car dealers currently depend on approximately 15,000 new duty-slashed cars permits to be given to doctors and senior government officials which is the quota permit requirement of the country for five years, Senaka Amarasinghe, Managing Director of Car Mart Ltd told the Business Times He said that these permits are being issued once in five years and the used cars of these doctors and officials have come to the local car market creating excess in supply with a less demand scenario pushing the industry on the whole towards a critical situation.
Mahen Thambiah, Managing Director of KIA Motors (Lanka) Ltd, noted that with the permit scheme being introduced many people have blocked their monies on selected vehicles e.g , Kia Sorento, Montero Sport, Kia Sorento, BMW 5 series, etc but this situation will not last long.
However he noted that the demand for KIA vehicles is on the rise and many of the customers will have to be in the waiting list to make their purchases.
President of the Vehicle Importers Association of Lanka (VIAL) Indika Sampath Merenchige who is also the Managing Director of W.T.L. Automobiles (Pvt) Ltd, said the import of Sport Utility Vehicles and its sales have almost zeroed while the sale of car permit vehicles and hybrids has gained momentum.
He disclosed that there is an increase in hybrid imports to the island due to the imposition of a lower duty – even though it went up to 100 per cent from 60 per cent – compared to 200-350 per cent duty hike for petrol and diesel cars.There is now a growing trend towards the use of environmentally friendly vehicles which is a good thing, he added.
Companies are selling around 600 hybrid cars per month while the sale of vehicle permit cars was in the region of 400 per month, he said.
Banks and finance companies have been very strict in giving out vehicle loans and people are either selling their cars for less than the market price or continue to use their existing vehicles because they cannot afford a new car, he said.
But over the past few years many cars were imported to Sri Lanka and these cars were bought on either one’s savings or on lease. This has caused people to cut down on their spending due to the high cost of living and their savings which is significantly low in comparison to what it was before.
Follow @timesonlinelk
comments powered by Disqus