Formula to reduce vehicle prices

High demand from Lankan buyers in Japan:

Harshini PERERA

A formula will be designed by vehicle sellers to price the remaining vehicles in line with the tariff reduction recently introduced by the Government.

There will be a recognizable increase in vehicle imports and the real impact of the tariff reduction will be felt only after three months, automobile industry sources said.

CMTA Chairperson Zeeniya Rasheed

Since there are floating stocks in the market, the real impact will be felt only when brand new vehicles imported to the country which will take three to four months, Ceylon Motor Traders Association (CMTA) Chairperson Zeeniya Rasheed told Daily News Business.

All imported vehicles including brand-new, reconditioned and used vehicles will be priced at the present duty rates.

A formula for remaining vehicles with reduction of tariff will be designed during the end of this week.

Though there has not been a formula decided yet, the remaining stocks will be sold at the reduced price focusing on future opportunities in the industry, a leading vehicle importer, said.

“The demand for used vehicles in Japan auctions has drastically increased due to the heavy demand from Sri Lankan buyers. This has indicated a slight price increase in imported vehicles,” he said.

After the duty reduction, a used vehicle can be purchased 30 percent lower than the earlier price. Traders kept fewer vehicle stocks due to rumours that spread even before this tax reduction.

He said that they can expect an increase in the second hand and used vehicles market.

When the economic situation for vehicles get favourable people will buy more vehicles in the future irrespective of whether they are used, reconditioned or brand-new.

A formula has not been designed yet to calculate the reduction of prices in remaining vehicles. The real benefit of the tax reduction on registered cars in the country will trickle down to the customers only after a month’s time, DIMO Deputy General Manager Tharanga Gunawardena told Daily News Business.

“We have received numerous inquiries from the day the Government decided to reduce tariff on vehicles. We can expect a drastic influx of vehicles to the country in the future showing a thousand fold increase on imported vehicles,” he said.