Reduction of LTV ratio will hit motor trade - Vehicle Importers
Association
by Lalin Fernandopulle
The move by the government to reduce the Loan to Value (LTV) ratio to
70 percent is good for the country to save the outflow of foreign
exchange and maintain a healthy Balance of Payment.
However, it does not augur well for the motor trade which will be hit
by a sharp drop in sales, President, Vehicle Importers Association of
Sri Lanka and Director, Wasana Trading Lanka (Pvt) Ltd., Sampath
Merenchige told guests at the launch of 100 charge points across the
country by Wasana Trading to promote cost efficient and
environment-friendly transportation.
Merenchige said if the move to reduce the LTV ratio is to curtail
exposure of banks and lending institutions to risk there should be
measures to reduce the number of personal loans which are more liable to
default.
Vehicles importers said reducing the lending risk and imports of
certain categories of vehicles is good but not at the expense of the
motor industry.
The Central Bank in a directive urged banks and financial
institutions to reduce the LTV ratio to 70 percent of loans granted to
purchase vehicles to reduce exposure of banks and financial institutions
lending for the purchase of motor vehicles.
Limiting exposure of banks and financial institutions through LTVs is
a practice adopted the world-over to mitigate risk of default in loan
repayment. Loans and advances include finance leases, hire purchase
facilities and loans and advances granted to purchase vehicles.
Merenchige said the demand for electric vehicles has increased in
recent years with the world’s gradual shift towards less costly modes
transportation and the growing concern for environmental safety.
He said hybrid and electric cars will be the vehicles of the future
and added that more infrastructure facilities such as charging booths
will be needed to meet the growing demand for electric vehicles.
Wasana Trading Lanka played a leading role in introducing hybrid
vehicles to Sri Lanka. “Our services across the country will encourage
people to go for electric vehicles that will be a huge saving on fuel
and minimise pollution in cities, he said. The company also hopes to
introduce rapid charging points which is used in other countries for
long distance travel. Wasana Trading launched the project in
collaboration with Vega Technologies (Pvt ) Ltd. Electric vehicle
motorists had to face difficulties due to the absence of adequate
charging booths in the country. Since charging takes around three hours,
motorists are advised to charge the power needed to reach their
destination.
“We embarked on this initiative to encourage people to go for
electric vehicles which has less maintenance unlike fuel driven
vehicles,” an official of the company said. Charge stations have been
set up in accessible locations. Six charging points have been set up
along the Southern Expressway.
“The electric car is a new technology which is 100%
environment-friendly and has many other benefits as well. But in Sri
Lanka, the demand for electrical cars has not kept pace with
international trends due to the lack of accessible charging points. As a
result owners of electric cars are inclined to use them as a second
car,” Merenchige said
“As the first step to change this pattern and promote the use of the
electric car as the primary car for every consumer, Wasana Trading set
up charging points throughout the island. We hope to set up more
charging spots around the country in the future, so that consumers will
not hesitate to purchase electric vehicles,” he said.
A Memorandum of Understanding was signed between Wasana Trading
Company and Vega Technologies to set up rapid charging points throughout
the country.
Wasana Trading is also developing an app for use on smartphones which
will enable owners of electric vehicles locate the closest charge point.
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