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A high customs duty on new luxury cars is turning away new vehicles from the Sri Lankan market, leaving the field open to reconditioned and second hand ones. Nobody will deny that reconditioned and second hand vehicles have their uses in a poor country such as Sri Lanka, but it should also be remembered that, over a period of time, such vehicles become significant contributors to the growing environmental pollution here and lead to Sri Lanka's going out of step with international requirements in pollution control.

"From January 1, 2003, Sri Lanka will adopt Euro II environmental norms. Second hand and reconditioned vehicles cannot comply with these norms," said Biswadev Sengupta, Country Manager of the Tatas, who are planning to launch "Indica", a 1400 cc luxury car in Sri Lanka in two months time.

Diesel and Motor Engineering Co. Ltd (Dimo), which will import the Tata Indica and the Tata Safari, is sanguine about the acceptability of these vehicles in the sophisticated Sri Lanka market. But what bothers the company is the "very high" duty on new vehicles." Indica will give reconditioned Japanese cars of a similar class a run for their money if the duty is cut down. It is 85% for petrol cars and 185% for diesel cars now," Vijitha Bandara, Manager, Institutional Sales said.

Speaking about Indica, Country Manager Sengupta said that Indica, whose new version was launched only last year, had proved to be a "great success" in India, where it was competing with long standing makes such as Daewoo Matiz, Hyundai Santro and the Maruti in the crowded "B" segment."

With sales touching 6,000 vehicles per month, Indica is number one in this segment," he said. Indica has a petrol and diesel option. It is a roomy and fuel efficient car, whose engine packs a lot of punch.

Tata Safari

Dimo is also excited about importing the Tata Safari, a four-wheel drive Sport Utility Vehicle (SUV) which would be very good value for money," Sengupta said. It has carved out a niche for itself in the sophisticated markets of Europe and Australia, where about 10,000 vehicles are currently (3,000 per year) running, Sengupta said." And we have learnt a lot from these markets," he said, to indicate that Safari is being constantly improved. "Safari is a sturdy car made for Sri Lankan's roads. The spare parts will also be cheaper," Bandara said.

Euro bus

But the vehicle which could make a big splash here is the "Euro" bus, an ultra modern 42 to 62 seater air-conditioned bus as a option which will change the "very concept of bus travel", Sengupta said. The Euro comes with the power of a 130 hp engine, as opposed to the 100 hp engine in earlier vehicles. It is Euro I compliant in terms of emission norms." We can on demand deliver a CNG version also," Sengupta said.

According to Dimo's Vijitha Bandara, the Euro bus will come with a very convenient financing package. Dimo has tied up with the Bank of Ceylon's Ceylease Company, which will provide soft loans through the Indian line of credit. "For a lower price (about Rs. 100,000 to Rs. 200,000 less than the competitor's price), you get a much better bus," Sengupta said.

The first lot has arrived and all have been sold," taken off the ship itself," according to Bandara. "We are overwhelmed by the welcome," he said. About 75 Euros are being produced now for Sri Lanka alone. The Tatas and Dimo expect about 50 Euros to be sold every month here.

Even as of now, the Tatas are dominant in the Sri Lanka's bus market, with 6,000 of the 9,000 buses in the CTB being Tata.

Tata trucks

Tatas of course have been long dominant in the truck market in Sri Lanka. About 13,000 of the 21,000 trucks in the island are Tata. With the new Tata trucks fitted with the world famous Cummins engines coming in shortly, the company hopes to continue its dominance. Cummins engines give the truck better hauling and climbing abilities." The higher tyre life and the fuel efficiency bring down the operating costs," Sengupta said.

Dimo's after sales service makes a major difference to the buyer. "We give a warranty of 18 months (or 150,000 kms of running). We have a 24-hour maintenance service and years of experience in the Benz and Tata maintenance work," Bandara said. "The equipment here is state-of-art and Tata engineers are stationed here," Sengupta said.

But all this is contingent on one crucial factor - the Government's willingness to bring down the customs duty on new vehicles. (PKB) 

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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