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| Sunday, 24 April 2005 |
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Business |  |
| News Business Features Editorial
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Small cars
popular after tax levy
by L. S. A. Wedaarachchi Following the high tax levy on reconditioned car imports last October, the sale of reconditioned cars had dropped drastically and the sale of brand new small cars had shot up. According to a spokesman for the Department of Motor Traffic, an Indian made small brand new car recorded the highest place in car registrations and over two-hundred- and-fifty cars of that brand had been registered per month during the last five months. The other significant feature of the vehicle registration is the increase in the registration of petrol vehicles and the decrease in diesel vehicles in 2003 and 2004. In 2004 the number of diesel vehicle registration dropped by seven per cent compared to the previous year. In 2003 the number of petrol vehicle registration increased by 68% compared to 2002 and this trend surfaced again in 2004. The total number of registered vehicles including cars, vans, lorries and buses during the last three months of this year is 47,124. The highest number 19,204 was registered last month. Vehicle market analysts said that the increase in diesel prices, the reduction of the price between petrol and diesel during the period of the last few years and the higher prices of the diesel cars and vans due to the higher import taxes have adversely affected the sale of diesel vehicles. At present the price difference between a litre of diesel and petrol is Rs. 26. Imported reconditioned diesel cars and vans are rarely available in the vehicle sales centres in Colombo, its suburbs and in the main cities such as Kandy and Kurunegala. A spokesman for a leading vehicle imports and trading centre said they had poor business for reconditioned imported cars and even for reconditioned small cars after the increase in import tax last October for reconditioned cars. The reconditioned car prices rocketed by Rs. 300,000 and more due to the tax increase, he said. On the other hand there was a marked demand for carefully used, second hand cars in the local market. A spokesman for a leading second hand vehicle trading house said second hands cars of the latest models have a high demand and their sales are moving very fast. The import of used heavy vehicles such as lorries into the country enjoy low taxes and other concessions. The increase in the import of used lorries could pose a threat to the environment, some analysts said. |
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