'Vehicle imports drop 50 percent'
'Ideal time to purchase Japanese vehicles':
Vehicle imports have dropped by around 50 percent due to the volatile
scenario in the industry, said Vehicle Importers Association of Lanka
(VIAL) officials at a media briefing last week.
However, vehicle registrations increased to 41,798 units in August
from 35,775 in July, with motorcycle registration up 29,365 units from
25,025 in the previous month, according to vehicle registry data.
 VIAL Chairman Indika Sampath Merechchige said of the number of the
registered vehicles around 50 percent are motorcycles.
'This is the good time to purchase a vehicle as the Yen may
appreciate and vehicle prices could rise further in the future,"
Merechchige said.
As the Association kept harping on the pledge by the Finance
Minister, journalists questioned the credibility of pledges by
politicians who are known for breaking promises and changing their
stance. He said VIAL is confident that the Finance Minister will keep
his promise and help the industry at a crucial time. However, he said
there could be minor changes to the tax structure but not drastic
revisions.
There has been wide speculation that the prices of imported vehicles
could change in the next Budget which is to be presented in November.
VIAL officials said the rumours about a reduction in taxes on
imported vehicles are baseless and added that the Finance Minister had
promised there will be no change in taxes for vehicles for two years.
"There is a perception that vehicles prices will drop after the
Budget which has created instability in the vehicle market. The Finance
Minister reiterated that he will honour the pledge made in April to the
Association that there will be no changes in imported vehicle taxes for
two years," Merechchige said.
The 2016 Budget was revised several times to accommodate industry
views.
"Except for rectifying irregularities in the valuation method of
vehicles it is unlikely that prices of vehicles will be revised at the
next budget" Merechchige said. However, the Association cautioned that
prices of vehicles below 1000cc could go up by around Rs. 300,000.
Merechchige said there are yet vehicles in the country imported prior
to April when there were no tax revisions which could be bought at the
same price. Considering the possibility of the Yen appreciating it is
the best time to purchase a vehicle.
"Vehicle importers had to re-export vehicles that were under order
due to import taxes on 1,500cc vehicles increased last April,"
Merechchige said. The Association was also question why importers don't
slash prices when taxes are revised downwards. The officials said the
Association bears the losses by adjusting prices during tax reduction.
When asked about introducing a quality evaluation method of vehicles
for customers Merechchige said the Association had made requests to the
authorities to come up with a evaluation method for customers and added
that the Association hopes that such a system will be introduced soon.
It was pointed out that vehicle importers take customers for a ride
by importing and selling substandard vehicles.
In response the Association said they have no power to take action
against bogus merchants but instead have brought the matter to the
notice of the authorities. "We call on the authorities to increase the
loan to value ratio to 90 percent for high quality vehicles," he said.
- LF
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