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Sri Lanka's reconditioned car market is thriving - Mowjood

by Shirajiv Sirimane

"Sri Lanka's reconditioned car market is thriving and the main reason for this is that the local people are not ready to spend the extra money to purchase brand new vehicles," said one of the leading Car Sales owners, Ajmal Mowjood.

In an interview with the Daily News he said that the difference between a brand new economy car and a reconditioned car is around Rs. three hundred thousand. "But many Sri Lankans want to save the extra money and mostly go for a reconditioned vehicle."

Mowjood, Managing Director of Ajmal Traders said that most of the reconditioned vehicles exported from Japan are tropicalised and they are of good quality. "The local spare part market for the Japanese motor vehicles is well organised and this is another reason why people buy reconditioned vehicles."

He said that today there is also a growing market for brand new luxury vehicles. "Over the last five years this segment of the market grew at a rapid pace mainly because the duty gap between the brand new and the luxury vehicle was narrowed."

Mowjood who sold his first vehicle at the age 13 years, said that duty structure for vehicle imports have to be revamped. "Sri Lanka is charging far too much duty on imports and local custom duty, which is 30% more than India, where vehicle imports to the country are being discouraged by the government since vehicles are manufactured in the country." He said that vehicle importers also face unwanted delays at the customs and more speedy clearance system should be introduced. "Most importantly a better security system too should be introduced as whenever a luxury vehicle is imported some of its value added products like Television, CD players and other items are stolen either while being shipped or at the port."

He said that he has been in the business for over 20 years and said that his success was due to honesty, reliability and responsibility. "Most of the people do not want to buy cars from 'sales' thinking that some of the genuine parts are replaced by used parts. This happened when spare parts were not available in the local market and today this is hardly a problem."

Leasing has become popular today and we are hoping to open more branches specially in the outstations.

The son of famous entrepreneur Lord Mowjood said that the Octane value of the present petrol is inadequate. "I think that the old system was better."

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Nissan, Renault ready for next wave of auto mergers

TOKYO, Sunday - Now it has returned, debt-free, to the highest level of profitability, Nissan Motor along with its partner Renault is ready to take part in the next wave of world auto mergers, according to its director general Carlos Ghosn.

Ghosn, presenting Nissan's preliminary results for the last financial year, which show a record net profit of 495 billion yen (4.12 billion dollars) and zero debt, said he was convinced the global automobile business was moving towards further integration.

He presented the partnership forged with Renault in 1999 as a shining example of how to merge businesses from different cultures.

"This industry is going to continue to consolidate - it is obvious," he told journalists in Tokyo this week.

"If you have on one side companies that are extremely competitive, with a very good business system, providing value, growth, products, technology, high level of profitability, etc, and on the other side players who have difficulty to provide the same things, it will call for more consolidation."

"I hope that Nissan and Renault will continue to operate in the same spirit that we have started," he said.

"This spirit is one of partnership. The logic is not to have a major and a minor partner, the logic is to create a partnership with exchanges, respect for each company. Since Nissan's death throes in 1999, when Renault became the controlling shareholder with 36.8 percent (it now owns 44.4 percent), the Japanese marque is now the most profitable general car constructor in the world.

The 10.8 percent operating margin is "at the highest level in the world automobile industry".

And according to an international investment banker based in Tokyo, "Ghosn thinks the management model created by the alliance with Renault can be extended to other partners."

The next targets will be China. Ghosn said on Wednesday that the joint venture with the Dong Feng Corporation will begin production in May. The deal will involve Nissan taking a 50 percent cut in a new firm, the Dongfeng Motor Company, thus acquiring the main assets of one of China's three big car-makers.

But according to the same banker, the decisive battle will be fought in the United States, where Japanese constructors are now attacking the most profitable sector, and the last still dominated by Detroit - the full-size sports utility vehicle (SUV) and pick-up truck.

Nissan's new factory in Canton, Mississippi, which will open on May 27, will build five of six new models for the American market, including the Titan pick-up and the Armada and Infinity SUVs.

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