Business Times

Sri Lanka car market registrations slump in July

By Bandula Sirimanna

Sri Lanka’s brand new and reconditioned motor vehicle market fell to 41,481 registrations in July from 44,400 in June after gaining momentum from the beginning of this year with India's Maruti /Suzuki dominating the brand new automobile segment and Japanese Toyota leading the re-conditioned or imported used car segment, Motor Traffic Department officials said.

The country’s automobile imports are expected to come down, due to the government’s action to raise car duties in April this year after a heavy drain of foreign exchange to import cars, a senior official of the Ministry of Finance said. He added that the revenue on car duties is expected to increase although there will be a slight drop in automobile imports.

Maruti/Suzuki sold 1,373 cars in July 2011, and on average sold more than 1,100 units each month according to new vehicle registrations. The best selling model was the 'Alto' which sold around 600 to 850 units a month. In July 858 units were registered. Malaysia's Perodua and India's Tata cars were a distant second selling about 200 units a month. In July, 175 Perodua cars and 177 Tata cars were registered. Tata started selling its 'Nano' in Sri Lanka recently.

Tata registrations shot up to 179 and 177 in June and July from a low of less than 20 a month up to May. Among 'reconditioned' or used cars imported mainly from Japan, Toyota dominated, with more than 2,000 units being registered a month. But after May, when 2,368 Toyotas were registered volumes had declined. In June only 1,705 were registered and July 1,316. Sri Lanka tightened rules of re-conditioned vehicle imports in April.

econditioned vehicle registrations dropped from a peak of 3,110 in May to 1,727 in July. These details were highlighted in an analysis by J B Securities, a stock broking firm. The prices of Indian-made Maruti and Alto cars sold in Sri Lanka have gone up by 12 % because of a government import duty hike, according to motor vehicle dealers in the island.

A senior official of Associated Motorways said the price of an 800cc Maruti has gone up by Rs 120,000 to Rs 1.14 million. "The Maruti has gone up by Rs 120,000. Alto also gone up by 12 %," he told the Business Times. Alto cars, which had been selling for between Rs 1.2 million and Rs 1.4 million before the import duty hike, now cost Rs144,000 and Rs 168,000 more, respectively, he said.

During the six months to June, Sri Lankans have registered 248,572 new vehicles up from 152,174 a year earlier, according to data released by the Motor Traffic Department.

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