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Vehicle prices may rise if conditions imposed on balance USD 200 million allocation
Colombo, July 8 (Daily Mirror) - The local vehicle market could face sharp price hikes if the government imposes any conditions on utilising the remaining USD 200 million allocated for vehicle imports, Vehicle Importers' Association of Sri Lanka (VIASL) President Prasad Manage warned.
Speaking to the media, Manage said that, according to recent reports from the Central Bank, financial institutions have already opened Letters of Credit (LCs) worth nearly USD 800 million for vehicle imports. He noted that while the resumption of imports had initially been backed by an allocation of USD one billion, the handling of the remaining funds now remains uncertain.
“We hope to hold discussions with government officials soon to clarify whether the remaining USD 200 million will be made available for imports as planned, or if new conditions will be imposed. If limitations are introduced, local vehicle prices will inevitably rise again, as the market depends on demand and supply,” Manage said.
He added that at least 9,000 vehicles have already been brought into the country to address the current shortage.
Manage also criticised the government’s decision to prioritise tax concessions for vehicle assembling plants, claiming it had failed to deliver meaningful economic benefits.
“A significant amount of foreign exchange was spent on importing vehicle parts for these assembling plants, which neither contributed to exports nor produced fuel-efficient vehicles,” he said.
The VIASL President urged the government to conduct an investigation into whether any real advantage was gained through these assembling ventures, which were initially promised tax incentives for export-oriented operations.
He warned that unless funds for vehicle imports are managed effectively and without unnecessary restrictions, the market could once again experience volatility and price surges.
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