Outright sale also mulled :

Car Mart looks for strategic investor

Ravi LADDUWAHETTY

Motor giant-Car Mart, General Sales Agents in Sri Lanka for Peugeot, Mazda and formerly for Volkswagen and a long standing private limited liability corporate of the Clarence Amarasinghe family, is looking for a strategic investor, top market sources told Daily News Business yesterday.

They also said that Car Mart is also mulling an outright sale in the event of some prospective buyer offering what they described as the “right price”.

These sources pointed out that the tangible reason for Car Mart’s search and quest for the strategic partner is the plummeting of the sales and also over-riding debt which has affected the viability of the company in the light of the current depressed market conditions which has affected the premium brands of the company and especially Peugeot. The drop in sales is also in the context of even the sales of the cheaper Indian brands falling. A Consultant explained the position of the company to a team of financial consultants though no finality has been reached on the strategic partner or an imminent sale. However, sources point out that the company needs financial injection desperately.

However, when contacted by Daily News Business, Car Mart Managing Director/CEO Senaka Amarasinghe denied the outright sale or the quest for a strategic partner but conceded that sales were down.

Amarasinghe, who is also the incumbent Chairman of the Colombo Motor Traders’ Association (CTMA) said that all motor car companies which were agents were having drawbacks in the sales due to the fuel prices and also due to extended reasons of global recession. Meanwhile, Car Mart Sales Manager ( Commercial Vehicles) Manjula Navaratne said that the sales were normal and that there was no serious drop in the segment he handles and that the company was to launch the Mazda pick up truck and model BT - 50 in the local market soon.

However, Car Mart’s Sales Manager (Passenger Car Sales) Charu Seneviratne said that the prospects were bleak especially for Peugeot in the current market context with prospective buyers not willing to go for European brands.

He said that the Peugeot sales peaked between six and eight per month for all models but right now had dipped to three or less.

He attributed the dip to a multitude of reasons and especially the unpractical duty structures. “This is an absurd situation where the CIF (Cost Insurance and Freight) price of the car is Rs. 1.5 million but with the duty, the sales price comes to a staggering Rs. 8 million” He said that albeit Japanese cars (Mazda) being relatively cheaper in price vis- a- vis the European cars (Peugeot) the appreciation of the Yen had also hit the Mazda sales.

“We were selling between 15 and 20 Mazda cars per month but the sales have dropped to around five a month and the picture for the future is absolutely bleak,” he said.