Vehicle imports to Sri Lanka crashed in February as the prospective buyers were hit by the double whammy of higher excise duties and stricter financing conditions, dashing their hopes of owning a small car or a three-wheeler for the foreseeable future.
According to the recently released monthly vehicle registration tracker by JB Securities Private Limited, a leading Colombo-based equity brokerage and research house, the vehicle registration numbers have fallen significantly across all categories with three-wheelers, two-wheelers and motor cars leading the pack.
In February, the total vehicle registrations fell to 29,945 units from 42,443 units in January and from an all-time high of 66,839 units recorded in March 2015.
The vehicle registrations provide a close guide to the monthly import of vehicles to the country.
Sri Lanka’s good governance regime slashed excise duties on vehicles and eased credit to keep the election promise of creating an economy conducive for every family to own a car.
But that policy soon backfired as the country was plunged into a balance of payments crisis amid a battered rupee and dwindling reserves.
Meanwhile, motor car registrations in February slid to 2,148 units from 3,079 units in January and 2,901 units a year ago.
The brand-new car registrations in February also fell to 786 units from 1,149 units in January and 1,070 units a year ago.
“Maruti cars recorded 213 units, down from 323 units the previous month and 525 units 12 months ago.
As a point of reference, in March 2015, the figure was 2,539 units and at its high point in September 2015, it was 8,029 units.
Datsun only posted 33 units down from 84 units and Renault posted 25 units, down from 76 units the previous month— both these cars are manufactured at the same plant in Chennai. Micro posted 166 units claiming the second highest share for the month,” JB Securities Managing Director Murtaza Jafferjee said.
Meanwhile, the pre-owned motor car registrations also fell to 1,362 units from 1,930 units in January.
Toyota was the market leader recording 727 units, down from 1,060 units the previous month, followed by Suzuki with 373 units and Honda with 202 units.
The premium motor cars recorded 54 new registrations and 17 pre-owned units for the month, down from 67 and 35 units in the previous month.
The electric car registrations fell to 26 units from 40 units in January and significantly down from 156 units a year ago. Out of the 26 new units for the month, 20 units were Nissan Leafs.
Meanwhile, SUV registration in February fell to 361 units from 434 units in January and 571 units a year ago.
“Honda was the market leader recording 191 units mainly through its crossover Vezel followed by Toyota recording 59 units— 32 Prados and 19 Toyota Land Cruisers probably imported on MP permits,” Jafferjee said.
Meanwhile, registrations of vans fell to 519 units in February from 627 units in January.
Three-wheeler registrations slumped to 903 units in February from 3,327 units in January. At its peak, there were instances where over 13,000 three-wheelers were imported during a month.
Registration of two-wheelers in February also fell to 23,319 units from 31,158 a month ago but up from 21,646 units a year ago.
With stricter vehicle financing conditions created through tweaking of the loan-to-value ratio (LTV) by the Central Bank, vehicle imports to the country is expected to further slowdown, giving the much-needed respite to the country’s trade account.