SL used car importers eye business in Africa
View(s):Sri Lanka’s reconditioned vehicle importers should consider the option of shifting their business to a growing African market if they cannot survive locally due to heavy taxes on used car imports, authoritative government sources said.
If these motor vehicle importers think that the country’s second hand car market will collapse as result of government’s taxation, what they should do is to explore the possibility of entering into African market which is now opened to the island nation after the commonwealth business forum, a senior government official suggested.
Quoting latest motoring statistics in the region, he disclosed that annual vehicle sales in Africa will rise nearly 20 percent in the next two years to hit the 2 million mark as the continent’s burgeoning middle class trades up from motorbikes to new and reconditioned cars.
Sri Lankan motor traders should try exploring this market through Sri Lanka – Africa contacts without blaming the finance ministry, he told the Business Times.
The Vehicle Importers Association of Lanka successfully entered the vehicle market in Myanmar which in turn has become a major source of foreign exchange for Sri Lanka this year and therefore it is not difficult for lankan vehicle importers to penetrate the African market as well, he added.
Car ownership has slowly but steadily increased on the continent but the rise has been more modest than one might expect.
In Kenya, for example, where per capita income went from US$4990 to US $8240 and there was an increase of just 9 to 13 passenger cars per 1000 people.
This is not to say that cars are not being brought onto the continent and in Nigeria alone the number of cars sold in the first half of 2012 went up by 15 percent from the same period in 2011, senior government official said.
Kenya and Nigeria will be the possible automobile markets for Sri Lankan used car importers, he disclosed.