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Buyer in for uncertain ride on motorbike duty removal
View(s):The removal of the 90% excise duty for imported motorbikes of less than 150cc, seen as a gift to the motor vehicle importers, in particular the Japanese made by Finance Minister Mangala Samaraweera, may not necessarily benefit potential buyers.
One leading motor vehicle importer when contacted Saturday, tried to draw a distinction between Indian-made Japanese bikes and Japanese-made bikes.
Mr Samaraweera claimed that the measures will help “a new breed entrepreneurs to boost local production’’ adding that “Sri Lanka is doing well amidst extreme weather conditions and unfavourable global economic conditions’’.
In fact, nearly 1.3 million people are suffering from a lack of drinking water.
“We hope the newly announced duty revisions will add impetus to our economic growth,” he said.
Mr Samaraweera himself, predicted a substantial reduction in prices, especially for Japanese bike models. Other government officials also say prices will fall.
Ashok Abeysinghe, deputy minister of Transport and Civil Aviation, said prices will drop by between Rs 50,000 and Rs 100,000.
As a result of ad-valorem excise duties, the prices of Japanese motorbikes had risen along with that of Indian two-wheelers.
Some Indian bike traders claim the duty cut adversely affects their business, while other Indian bike traders say it neither reduces nor increases the prices, since duties for Indian bikes remain.
Among the measures is a duty of Rs 500 per cubic centimetre (cm3) of the engine capacity imposed on bikes with a cylinder capacity of less than 50cc, while for motorbikes between 50cc and 150cc the duty will be Rs 1,000 per cubic centimetre.
An official at TVS Lanka (Pvt) said the prices of Indian motorbikes might increase. David Pieris Motor Company has not yet decided on prices.
Abans Auto (Pvt), which imports Hero motorbikes, said it does not expect any impact on the prices on Indian bikes.
A trader told the Sunday Times, potential buyers are waiting for prices to drop.
A motorbike dealer in Colombo said he receives between 10 and 15 phone calls a day about prices. “Most of them believe that there will be a price reduction for Indian bikes, too. But the duty cut will not have any significant impact on Indian bikes,” he said. He also said those who had made advance payments are holding back awaiting a price reduction. This has resulted in a drop in usual sales, he said.
Traders says Indian motorbikes account for more than 95% of the market, while the Japanese bikes make up the remainder.
Only a limited number of brand new Japanese bikes are imported as the cost is high.
According to Motor Traffic Department data there are 3.9 million motorbikes in the country. Motorbikes make up more than half of the annual new vehicle registrations, exceeding 300,000 a year. In 2015 and 2016 respectively, 370,889 and 340,129 motorbikes were registered, while this year 202,777 new registrations have been recorded up to July.
In July alone, 30,226 two-wheelers were registered.
Motorbikes are also the cause of a rising number of road traffic accidents. Last year, motorbikes were responsible for 1,178 deaths out of 2,824 killed in road traffic accidents. Up to June this year, 564 bikes were responsible for 1,419 deaths.
DIG Traffic Kamal Silva said strict implementation of traffic rules would help curb the number of traffic accidents caused by motorbikes, regardless of the possible rise in the number of bikes following the duty cut.
Meanwhile, Dushantha Ranasgalla secretary of Kurunegala Motor Cycle Importers Association said many are now planning to import more Japanese motobikes.