Vehicle registrations slumped in February, ahead of duty concession expectations from Budget 2019 and amid impending election, the monthly vehicle registrations tracker by JB Securities, a leading stockbroker and equities research house showed.
However, the budget delivered on March 5 dashed hopes as duties were raised on vehicle imports and was slapped with a massive luxury tax, sending the prices of most categories of vehicles doubling their CIF values. Sri Lanka registered 29, 837 vehicles across all categories in February, significantly down from 36,895 units in January and 38,427 units 12 months ago.
“Vehicle registrations slowed in February due to slowing demand and a smaller number of calendar days in the month,” said JB Securities Managing Director Murtaza Jafferjee. Monthly vehicle registrations can be a proxy for vehicle imports, but a difference between the two could arise when local agents sell down their stocks.
Sri Lankans registered 2,347 cars in February, significantly down from 3,147 units in January and 5,024 units 12 months ago. Meanwhile, the SUV registrations were down to 534 units from 735 units in January, but up from 464 units a year ago.
Three-wheeler registrations recorded 1, 341 units, down from 1,706 units in January and not much changed from a year ago.
Two-wheelers, the common man’s vehicle, recorded 23,165 units during the month, down from 28,114 units in January and 27,812 units 12 months ago.
The vehicle stock in Sri Lanka more than doubled from roughly around 3.5 million by the end of 2014 to over 8.0 million by the end of 2018, as the coalition government of SLFP and UNP slashed duties, cut rates and gave a thumping salary increment to State sector workers imploding the economy.
But the government changed course this time and took a firm decision to clamp down on personal vehicle imports in the Budget 2019, and a week later entered a Rs.48 billion soft loan deal with Japan International Cooperation Agency (JICA) for a Light Rail Transit System in Colombo, a project which is at least three decades overdue.
The project, which is expected to take five years to complete, is expected to address one of the major productivity killers in the country.