Following slash on import duty:

Demand for new cars increase

After the slash of import duty the demand for brand new motor cars has increased sharply.

However, the prices of second hand cars have not yet changed and a price reduction in second hand cars is expected only after brand new car orders are delivered.

The minimum lead time for a brand new car is over four months and therefore the second hand car prices will reduce by October this year, market sources said.

A fleet of vehicles

A spokesman for Associated Motorways Ltd said that there is a demand for the newly launched economy class motor car A-Stra. The car was launched in Sri Lanka last week and within four days 90 cars have been ordered, he said.

Under the new tax a car is sold at Rs.1.65 million and if the earlier tax system prevailed the price would be Rs.2 million. This is a full option manual gear car and the company needs three months lead time to deliver the vehicle.

The A-Star auto gear car will be launched in December at Rs.2.6 million.

The Maruti 800 economy car price has come down from Rs. 1.25 million to Rs 960,000 after tax reduction. After the price revision there is an order for 3000 cars. If you order a car today the company will be able to deliver it in February next year.

Sales Manager of Toyota Lanka Janaka Badugama said that after tax reduction customer inquiries have increased and the company expects a sale of over 1000 cars this year. In the last year car sales were very low and only around 200 cars were sold, he said.

Sales Manager of Indra Traders said that the price of newly imported reconditioned cars have come down by Rs 200,000-300,000. However, second hand car prices have not decreased, he said.

The price of luxury cars have come down by a large amount and there is a sharp increase in demand. The price of a E-class Mercedes Benz has been reduced by around Rs. 6 m.

The car was sold at around 23.5 million earlier. After the price reduction over 80 cars have been ordered so far while last year only 8 cars were sold, market sources said. GW