Sri Lanka’s vehicle registrations were steady in August from July as the equal number of working days in the month helped the registrations to remain virtually
at same levels.
According to the equity brokerage and research house JB Securities, the vehicle registrations across all categories in August were 32,188, slightly up from 31,715 units in July.
However, this was significantly down from the 43,190 units recorded a year ago just before the currency collapsed and the financing restrictions came into effect.
While the monthly vehicle registrations could be considered a proxy for monthly vehicle imports, the two numbers could differ when local dealers release their stocks to the market.
In August, total motorcar registrations were 2,385 units, down slightly from 2,584 units in July and significantly down from 7,003 units a year earlier.
Brand-new car registrations were 361 units, up from 299 units in July and 890
units a year ago.
Small cars, less than 1,000 CC, accounted for 88 percent of volumes. Maruti/Suzuki was the market leader accounting for 164 units, of which Wagon Rs
were 63 units.
The balance was pre-owned cars, which had 2,024 units.
Sri Lanka has a rising middle-income class and they typically make their first sizable investment in a motorcar, mostly through a financing facility, in response to Sri Lanka’s decaying public transport system.
Economists interpret spending a few millions of rupees on a vehicle is one of the poorest capital allocation decisions one could make, especially in a country like Sri Lanka, where capital is scarce.
During the last four years, Sri Lanka’s banks thrived rapidly expanding their leasing books by way of giving out leases for all types of vehicles, mostly through printed money, which pushed the economy to a near balance of payment crisis.
At one point, such vehicle registrations reached over 64,000 units a month in 2015, doubled the amount that is being registered today.
It is estimated that an average suburban Sri Lankan spends at least six years of his life on road due to traffic congestion, which otherwise would have been spent on productive work.Meanwhile, Sri Lanka registered 1,039 units of three-wheelers in August, down from 1,118 units in July.
Two-wheeler registrations recorded 25,508 units, slightly up from 24,739 units in July.
One of the key reasons why the public transportation never developed in Sri Lanka was the exploitations of the vehicle duty system for political advantage by the successive regimes that were in power.