Registrations of brand new and pre-owned vehicles plunged 44.9 percent Year-on-Year (YoY) to 23,544 registrations during the month of February, according to information analyzed by the local equities brokerage, J.B. Securities (Pvt) Ltd.
The highest number of registrations was recorded in the motorbike segment with 11,941 registrations, against 20,350 registrations in the previous year.
Registrations in the motor car segment dropped by a drastic 69.3% YoY down to just 1,058 registrations during the month. Meanwhile, registrations of three-wheelers came in at 6,478 against 10,679 in 2012.
Maruti/Suzuki regained its position of the highest number of registrations from a single brand during the month with 145 new cars being registered as compared with 190 cars in January and 1,266 registrations in February 2012.
Meanwhile, previous top performer, Micro saw registrations fall to 114, against 293 registrations in the preceding month and 210 registrations in February 2012.
Micro is a brand which is classified under Sri Lankan origin. The vehicles are assembled locally utilizing parts manufactured and imported from China under tax concessions from the government.
Another drop in registrations was seen from Tata, with just 22 vehicles registered from a high of 322 vehicles in the previous year. Malaysian brand Perodua also recorded a drop in registrations down from 392 registrations in February 2012 to 69 registrations.
Notably, Maruti, Tata, Micro and Perodua are all producers of small cars under 1,000cc, a segment which received particular attention from Budget 2013 through increased registration taxes.
The small car segment itself received a total of 235 registrations, as compared with 1,589 registrations in the previous year.
Other notable trends in vehicle registrations during the month include the rise of German-based brands in the Sri Lankan market, which accounted for 14 percent of total registrations.
Indian-origin vehicles account for 36 percent of registrations, whilst Sri Lankan and Malaysian vehicles account for 24 percent and 15 percent of total registrations respectively.
In total, 46 brand new BMW cars were registered during the month, down from 84 registrations January 2013 and against 17 registrations in February 2012.
Registrations of BMW cars have been on a largely upward trend since August of last year.
Amongst the more exotic vehicles registered during the month was a Ducati Multistrada 1200.
Registrations of luxury vehicles like BMW’s is largely acknowledged to be fueled by government issued duty free permits which entitle permit holders to varying concessions on taxes.
Information on the exact number of permits in circulation is not yet known, as is the current percentage of vehicle registrations utilizing permits. However industry experts have cautioned that the high prevalence of duty free permits in the market is exerting a distorting force on overall vehicle prices by creating an un-official secondary market for vehicle sales in the country.
Whilst a drop in registrations is partially attributable to the fact that there were only 29 days in the month, the declining trend is still largely a result of measures taken over the course of last year, culminating in a higher tax regime on vehicle imports in Budget 2013.
Declines in vehicle registrations in 2012 were first recorded in March following the announcement of a round of monetary policy tightening by the Central Bank of Sri Lanka in order to curb a growing import bill, which in combination with a pegged rupee had caused unsustainable depletion of the island’s foreign exchange reserves.
Following a peak of 47,500 registrations in January 2012, vehicle registrations have been on a continuously declining trend for the majority of last year save for minor improvements between July and August however vehicle registrations are yet to cross 2011’s peak of 49,250 in the month of September.
Whilst an exact figure is yet to be established, analysts have stated that the loss in government revenue as a result of drastically lower vehicle imports is expected to be substantial.