Used car market sales crash to 100 units per month from 3,500 some years back
Sri Lanka vehicle importers are eying new markets in foreign countries as the country’s car market which enjoyed a brief boom has once again plummeted due to the recent tax revisions, vehicle importers said.
Keerthi Gunawardene, Secretary of the Vehicle Importers Association of Sri Lanka told the Business Times that they are planning to enter the used car business in Myanmar taking advantage of their tax benefits and other facilities given for importers.
He pointed out that their association with over 240 members has taken this initiative as the vehicle business in Sri Lanka suffered a severe beating in the recent past due to tax issues.
Some of their members were on the verge of closing down their business, he said. The association stepped in to rescue vehicle importers finding alternate avenues following the failure to arrive at a viable solution to this problem with Treasury Secretary Dr. P. B. Jayasundera and other government authorities, he added.
The used vehicle imports have reduced drastically from around 3,500 units per month a couple of years ago to around 100 per month at present, he disclosed.
Owing to this, the association is exploring the possibilities offered by Myanmar’s huge vehicle market. Myanmar is importing 10,000 vehicles per month, he said. The association is sending a 30-member delegation led by its President Sampath Merenchige to Myanmar on a business and investment promotion from 10th to 16th September.
Once approval is granted, Sri Lankan vehicle importers plan to open car sales showrooms in that country with the assistance of the Myanmar authorities. He said that cars even as old as 1996 (year of manufacture) are being permitted to be imported by Myanmar authorities, adding that they hope to ensure that Sri Lanka also benefits by repatriating the profits.
The delegates are expected to meet three key Myanmar Government Ministers – Union Minister for Rail Transportation, Union Minister for Commerce and the Union Minister for Industry. A meeting with the Director General of the Customs Department is also scheduled.
They are also scheduled to meet Union Myanmar Federation Chamber of Commerce and Industries (UMFCCI) officials have one- to-one meetings with vehicle Importers in Myanmar and a host of other leading businessmen during the visit. The used car market has been in the doldrums since the government began reducing the age of the used vehicles permitted to be imported.
For many reasons including pressure from the new car market importers, the government last year reduced the age to one year which led to protests from used car dealers.
The authorities have said that the strategy is to eventually end the import of used cars due to environmental pollution concern.