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| Tuesday, 30 September 2003 |
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Micro car driven to red tape We wait for ages for a car that can truly be called 'Sri Lankan.' Then a far-sighted entrepreneur develops just such a car, only to face an unexpected hurdle: The car is not yet recognised by the RMV for issuing a revenue licence. This is the sorry state of affairs confronting Micro, the first car totally designed and developed in Sri Lanka. Elsewhere, such a venture would have been given all facilities and concessions, not to mention preferential treatment over foreign makes. Here, the opposite happens, despite the rhetoric we hear about giving priority to local industries and products. That red tape should hinder a local endeavour of this nature is totally unacceptable, given the many plus points of having an indigenous car. The Micro being small and reasonably priced, more Sri Lankans will be able to own a car in a country where the public transport system leaves much to be desired. A smaller engine capacity also means that the car will use less fuel and emit less pollutants. Furthermore, Micro factories will employ thousands of youth. Support services such as sales and repair centres will require thousands more. A considerable saving in foreign exchange can also be anticipated because buyers looking for a low-end imported brand new car are likely to choose the Micro. Micro has already received export orders which could potentially earn millions of dollars. All these will be in vain if the authorities do not give Micro the recognition that it deserves. Micro's architect, Dr.Lawrence Perera, has warned that he would abandon the project and return to the UK if red tape persists. The powers that be must identify the officials who employ delay tactics to hamper the local car manufacturer's progress. Remedial action must be taken before Sri Lanka loses a pioneering venture and an enterprising individual. Sri Lanka can learn a good lesson from our closest neighbour in this regard. India's auto industry is thriving with the fullest support of the government. A gamut of manufacturers produce a range of cars, most of which can also be seen on Sri Lankan roads. Cars made in India are now exported to many countries. Two Indian manufacturers have set up assembly plants in Sri Lanka as well. Global auto giants such as GM, Ford, Hyundai and Fiat have set up factories in India to cater to the increasing demand. The result is that the Indian consumer can buy a brand new car at a very affordable price. The situation is markedly different in Sri Lanka, where the consumer has to pay several taxes and duties in addition to the basic price. For example, a customer who buys a Micro has to pay nearly Rs.92,000 as VAT. The tax structure for brand new cars discourages buyers and drives them towards cheaper reconditioned cars. These vehicles may be cheaper, but repair and maintenance costs rise as they have already been used abroad for up to five years. On the other hand, brand new cars and motorcycles are shipped tailor-made for Sri Lanka and can be used with minimal maintenance for at least five years. Most countries in the region have banned used car imports or are in the process of doing so, for precisely these reasons. The motor industry in Sri Lanka has called for lower Customs duties on brand new cars so that more people will be able to buy vehicles at affordable prices. The government should seriously consider this suggestion before Sri Lanka earns a reputation as a dumping ground for old cars. The government should also invite global auto companies to set up manufacturing plants in Sri Lanka to meet the rising demand here and to exploit export opportunities. |
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