- Recon car registrations hit 2-year high of 4, 466 units
- Suzuki Wagon R accounts for lion’s share
- Cars with 1L engines dominate brand new registrations
- Leap in premium car registrations
Sri Lanka’s pre-owned or reconditioned car registrations hit a 2-year high in January amid slightly eased interest rates and banks and finance companies racing to grab the largest share of the vehicle leasing market with very attractive offers.
According to the monthly vehicle registrations tracked by JB Securities Private Limited, a leading stock broking and research firm, pre-owned car registrations shot up to 4,466 units in January from 2,638 units in December and significantly up from 1,149 units 12 months ago.
“Suzuki accounted for 2,777 units of which 1,883 were Wagon R followed by Toyota which accounted for 1,257 of which 760 units were 1L Vitz.
Financing share was 56.6 percent down from the mid 60s the previous month indicative that much of the growth is being funded through cash purchases or non-collateralized financing, e.g. personal loans.
Eighty four percent of volumes are in small cars with engines less than 1L indicative of the distortion of the playing field due to the unit method that favours small engines irrespective of value”, said JB Securities Managing Director Murtaza Jefferjee.
Meanwhile, the brand new cars saw 840 registrations, up from 756 units a month ago but down from 1,149 units a year earlier. “The segment is dominated by small cars, which account for 88 percent of the total; Suzuki/Maruti accounted for 252 units of which 114 units were Wagon R imported by the agents. Toyota is showing steady growth with its Wigo model registering 55 units, which is a 1L petrol engine small car that is manufactured in Indonesia and marketed locally for Rs. 3.4 million,” Jafferjee added.
In a notable development, premium car registrations surged to 206 units in January from a mere 53 units in December and 67 units 12 months ago.
Meanwhile, electric cars recorded 18 units in January up from 6 units in December but significantly down from 40 units 12 months ago. Nissan Leaf accounted for 16 units.
Sri Lanka’s Central Bank in February eased the loan-to-value ratio for electric vehicles and several other categories of vehicles up to 90 percent. The total vehicle registrations during January reached 5,306 units, significantly up from 3,394 units in December and 3,487 units 12 months ago.
Sri Lanka’s total vehicle stock more than doubled during a very short span of less than 3 years and the major cities and suburbs are now swamped with vehicles.
Sri Lanka’s myopic policy makers tinker import duties on motor vehicles during election times to garner votes. As a result, Sri Lanka doesn’t a have a proper public transport system and specially in cities, people depend on their personal vehicles for daily commute to work.
As a result, the congestion on roads during peak hours is a nightmare, and an addition of more vehicles to the existing stock will make situation even worse.
Traffic kills valuable man hours on a daily basis and burn foreign exchange as Sri Lanka is a net importer of oil.
In February, Singapore—one of the most expensive places to own a vehicle— cut the annual growth rate of cars and motor cycles to zero from 0.25 percent.
“In view of land constraints and competing needs, there is limited scope for further expansion of the road network”, said Land Transport Authority in Singapore in a statement of its website.
Sri Lanka wants to emulate Singapore in growing its economy. But Sri Lankan government acquires precious private and public lands to widen roads, violating individual liberties, and is far from finding sustainable solutions for congestion, which is being worsened by the day.
Meanwhile, in January, 1,543 three wheelers were registered, up from 1, 236 units in December but significantly down from 3,327 units a year ago.
Two wheelers which account for the lion’s share recorded 31, 596 units in January, significantly up from 25,019 units in December and marginally up from 31,158 units 12 months ago.
In total Sri Lanka saw 43, 170 vehicles being registered in January, significantly up from 34,090 units in December.