High motor taxes detrimental to growth

Hiran H. SENEWIRATNE

Sri Lanka should give much prominence to the infrastructure development to achieve a rapid economic growth from medium to long term perspective, Deputy Managing Director (Motor Division) Ranjan De Silva said.

He said infrastructure is a bottleneck for Sri Lanka to attract foreign direct investments to Sri Lanka. A good road network and an efficient transport system will help to resolve many problems in the country. An efficient transport system is a main attraction for many prospective investors to the country, he said.

De Silva said a good road network with flyovers, and Colombo ring roads will prevent traffic snarls in major cities and must be addressed soon by expediting current development projects in the country.

He said the railway transport system has to be developed well, as it is the biggest people mover in the country, which has to be given much emphasis by the Government like other developed countries in the world.

Q: Associated Motorways Plc (AMW) was a family owned company for several decades. What is the management structure now?

Our management structure is very simple and we have a Chairman and the Board of Directors including Deputy Chairman/Managing Director and myself. We work like a strategic business unit base with all our distributors.

Our company is the 30th largest company listed in the stock market. We are the sole agents for many motor vehicles including Nissan, Maruti, Renault, Suzuki, Yamaha, Piaggio three wheelers and many more. Our current Chairman Ajitha De Zoysa will retire this month and his brother Tilak De Zoysa will takeover the reins of the company as the Chairman soon.

Q: With the acquisition by the Dubai based Al- Futtaim, what will be the future of AMW?

Al-Futtaim bought more than 70 per cent shares of the company. They will bring best global practices to the company. We are a profitable well-known company in the country, which has prompted Al- Futtaim to acquire the majority stake in the company.

Al-Futtaim was introduced to our Chairman by his business partner. They judged AMW as a good company, which fit with them as they were also a similar company 40 years ago. Al-Futtaim representatives were in Sri Lanka to explore business opportunities here. The company will appoint a Chief Executive Officer (CEO) under our Chairman soon.

Q: With this new acquisition Al-Futtaim is planning to make Sri Lanka a motor vehicle hub in the region. What is your opinion?

According to the company, they have a strategic expansion plan to penetrate into other areas in the region. At present we have several projects in the pipeline.

Those are property development and real estate,

Maruti vehicle assembly plant and additional facilities for current business. This affiliation will augur well as Al-Futtaim established entity in the Gulf region also sells more than 10000 units of motor vehicles to more than nine countries in the Gulf region. Therefore with this acquisition they will bring best practices and technological transfers to the company. It also will bring good management and technical skills in the automobile sector enabling our employees to become more skillful in their work.

Q: According to your opinion how will Al-Futtaim make Sri Lanka a motor hub?

Al-Futtaim is looking at opportunities through the Indo- Sri Lanka and Pakistan- Sri Lanka trade agreements.

The company will grab whatever opportunity available in the region. The company is also much concerned on how much more Dubai can develop as it has reached the highest international standards are being practices.

The company is now looking at other markets in a positive manner.

Q: How could Sri Lanka manage a stable position in the trade gap between the export and import you being the Chairman of the Imports section of the Ceylon Chamber of Commerce?

As we know our imports have increased because of international fuel prices and commodity prices. It is said that over 81 per cent of goods are intermediate and investment goods due to the international trends and scenarios. Therefore it is beyond anybody’s control now.

Q: AMW being a leading motor vehicle agent for many leading motor vehicle brands, how do you see the vehicle market in the country?

Another problem is that high interest rates and inflation to gether with high taxation is eroding the purchasing power of our customers. We look at it as a stable business that grows with the economy with the growing disposable income. But Sri Lanka is one of the highest motor taxation regimes in the world.

This is detrimental to the growth of the business. More than that our road network in the country has to improve to cater to ever increasing vehicle demand in the country.

Q: As we know that Sri Lanka is grappled with many problems and issues. As a decision maker of a leading corporate in the country what would be the main solution to the most of the issues?

I would say the Government laying down the infrastructure projects including power and energy, roads and highways and ports, which are now coming on screen. To solve most of the problems in the country, Sri Lanka has to develop the economy.

We also have to bring reforms to many areas including education and infrastructure development.

We have to look at India, which unleashed the potentials of the private sector education for the 21st century to bring prosperity to the people in the country.

Q: What is your philosophy in life?

I believe we must add value and also help people to grow and reach to their potentials. We like to lead a balanced life between the professional life and family life. I strongly believe family is very important and religion is an important guide in our life.

Q: What is your retirement plan?

I being a Buddhist will spend more time with religious activities. I also look forward to grandchildren, which I don’t have right now. I will also spend time with my family as well.

Ranjan De Silva
Deputy Managing Director, AMW

Name-: Ranjan De Silva

Schools Attended -: Thurstan College and Ananda College Colombo

Education - Professional: Fellow of the Chartered Institute of Management Accountants,

Civil status - Married has two children

Current positions - Chairman of the Transport and Automation Committee of the National Chamber of Commerce.

Vice Chairman Sri Lanka-China Business Council

Chairman of the Import Section of the Ceylon Chamber of Commerce.