India continues to dominate the Sri Lankan market for vehicle imports accounting for 50 percent of the import value. Japan has remained resilient maintaining 30 percent of market value facing challenges from other countries, Motor Traders said.
India's Tata and Maruti brands are leading Sri Lanka's vehicles market taking a major share of both automobile and trucks,they revealed. Sri Lanka's thriving vehicle market has recorded further surge in sales last year following import duty reductions in 2010 that gave a boost to the once ailing motor industry in the country.
Motor vehicle traders said that there was nearly 100 percent growth in sales in 2011 due to the reduction in import duty which has increased sales by around 75 percent since mid 2010.
Chairman Ceylon Motor Traders Association, Tilak Gunasekera told Business Times that vehicle sales had increased since the slashing of the import duty mid 2010 . He noted that that most dealers had recorded considerable growth in sales.
The vehicle market in Sri Lanka faced difficulties a few years ago due to a 300 percent import duty, the highest in the world. The import duty on vehicles is still high compared to many countries in the region.
Vehicle import revenue will contribute to the economic growth which is predicted to be around eight percent this year. Central Bank data revealed that import of buses, trucks and other transport vehicles have risen sharply following the duty reduction.
The sale of new cars had been around two to three units a month before the reduction of duty while at present sales have increased. Buyers of new cars are on the waiting list of many vehicle dealers including AMW, Sathosa Motors and KIA as the principle agents take some time to deliver the orders .
The VAT component on imported new vehicles was slashed to 12 percent from 20 percent in the 2011 budget that gave incentives to used vehicle importers. The 70 percent duty on used cars was reduced to 55 percent. Sri Lanka imports new and used vehicles from Japan and India. Japan has a huge used vehicle export market due to the low price of new vehicles.
Mr. Gunasekera said that he attended the Indian Automobile manufacturers Association conference and Japan Isuzu motors conference recently representing Sri Lanka motor vehicle traders.
Meanwhile Sri Lanka Motor Vehicle Summit organized for the first time in Tokyo by the Sri Lanka Business Council of Japan (SLBCJ), jointly with the Embassy of Sri Lanka in Tokyo recently . The Summit attracted the attention of leading motor traders in Japan and Sri Lanka. Over 100 motor traders in cluding 26 from Sri Lanka had participated.
Ambassador Admiral Wasantha Karannagoda, who was the Chief Guest at the Seminar held at Shinagawa Prince Hotel, Tokyo stressed the need of increasing attention on importation of eco- friendly (green) cars to preserve the environment and the need for reduction in price in order to be competitive with European vehicles due to appreciation of the Japanese Yen.
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