4 July 2017 12:01 am
Pic by Samantha Perera
By Zahara Zuhair
The Ceylon Motor Traders’ Association (CMTA) said that it would continue to lobby the government with regard to the discriminatory, short-sighted and ad hoc policy changes, which keep on hurting the country’s legitimate auto industry. Reeza Rauf, who was re-elected as Chairman during the CMTA’s annual general meeting last week, said the government has failed to create a level playing field in the marketplace as only certain auto industry stakeholders stand to gain from its policies.
The CMTA, which is the apex body representing the manufacturers of global automobile brands in Sri Lanka, regretted the government’s recent decision to allow the registering of vehicles assembled by importing age-old, used spare parts, contravening all safety standards and risking the lives of the public, who are unaware of the dangers.
“This is also contradicting the budget proposal of 2016, where it suggested re-exporting vehicles, which are five years and older, as these so-called used spare parts could be well over five to 10 years,” Rauf said.
The CMTA noted that the danger of permitting such a measure is that the unsuspecting buyer would not know the year of manufacture of theses assembled vehicles as a car manufactured 10 years ago can be issued with a latest registration number plate by the Registrar of Motor Vehicles.
Meanwhile, Rauf said the government’s auto sector policies have always been titled towards favouring used car importers.
He pointed out that the present valuation system in place for import of used vehicles is detrimental to the country and a massive loss to the government in terms of revenue.
“This would be very evident if the authorities could carry out a proper investigation and analyse the market trend for the last one to one-and-a-half-year period,” he said.
In spite of bringing this to the attention of the relevant authorities, he said the grievances of the legitimate importers of brand-new vehicles are not being heard.
In addition to the chaotic tax policies, Rauf said the industry is further hurt by the Central Bank’s restrictions on loan-to-value ratios (LTVs)—50 percent for motor cars/SUVs, 70 percent for motorcycles and 25 percent for three-wheelers.
According to him, it has dampened the customer demand to purchase at least a low-end motor vehicle through a financing facility.
Rauf however said his association is very much aware of the predicament the government is in bridging the balance of payments (BOP) gap.
He, therefore said, both the auto industry and government should work together to create a level playing field and find a mechanism for the sustenance of the industry, its stakeholders and future growth.