- Industry expects govt. to extend quota system for auto imports
- Import resumption this year crucial for industry survival
By Nishel Fernando
One of Sri Lanka’s top franchise holders of global automotive brands is hopeful of a gradual softening of the current stringent import restrictions on vehicles and other automotive components including spare parts into the country towards the end of the third quarter.
“We are hoping at least at the end of 3Q this year, the government will provide us with some kind of leverage or quota or something similar to import vehicles into the country,” Access Motors CEO Ravi Perera told Mirror Business.
A member of the Access group, Access Motors is the sole agent for Jaguar Land Rover in Sri Lanka.
He emphasised that importation of vehicles into the country should restart within this year, as it would be crucial for the survival of the country’s automotive industry.
The government imposed a blanket ban on all vehicle imports to the country, fearing a possible foreign exchange crisis fuelled by the impacts stemming from the
Further, Perera highlighted that the industry is also faced with restrictions in bringing down certain spare parts to the country, which are crucial for servicing the existing vehicle population in the country.
“We cannot fix cars due to the unavailability of spare parts. There is customer dissatisfaction as they are not able to get their vehicles fixed, despite holding a warranty,”
he pointed out.
On a positive note, he acknowledged that the government has been lifting some of the restrictions on certain items,
Meanwhile, the Ceylon Motor Traders Association (CMTA), the only trade association in Sri Lanka that represents automotive manufacturers through their local importers, last month requested the government to provide a firm timeline on when it plans to recommence imports.
The association also sought support to the industry from the government, if the expected date is several months into the future, so that it can sustain its employees and overheads as importers will soon have no stocks and no vehicle sales income.
“We are facing huge losses currently. We have invested so much in the showroom, workshop, infrastructure, machinery and training. It’s definitely a challenging time for all,” Perera added.
The automotive industry expects the government to lift the import restrictions in a gradual manner, starting from importation of spare parts.
“Firstly, we are requesting the government to give us the okay to import spare parts and then allow importation of vehicles in commercial categories such as trucks and buses, which is crucial for the country’s development. At the third stage, we are expecting it will be extended to us as well,” he elaborated.
The automotive industry is also urging the government to form consistent policies, which last for a longer period of time.
“What we are requesting is to have one policy for a longer period, instead of changing every six months and to provide us with some room to conduct our business,” Perera noted.
The industry typically faces a recovery period of around six months to bounce back when the government increases duties in an ad hoc manner, given the price sensitivity.
Despite the current challenging period, Perera was optimistic that the industry would recover from the current downturn while pointing that the demand has begun to pick up from July, indicating signs of recovery for the sector.
“The demand has started to pick up. In particular, last month was a good month and we hope that the same momentum will retain,” he said.
However, the uncertainty remains over as to when the government would relax or soften the import restrictions on vehicles, before the current stocks run out.
For example, the vehicle stockpile at Access Motors presently has come down to mere 15 units, as the consumer demand started to pick up, driving up sales.