Tax reduction opens up market:

Growth in vehicle sales

Mulls import of hybrid vehicles:

Charumini de Silva

The reduction of import duty for vehicles has shown a remarkable growth in vehicle sales. Daily News Business interviewed some of the leading motor vehicle importers in the country on their past nine month performances and most said the duty reduction of vehicles has caused a major impact on signifying a growth of their sales.

Colonial Motors PLC Managing Director Mohan Ratnayake said the reduction of import duty on vehicles was a very favourable step taken by the Government to uplift the industry.

Gehan Siribaddana

Mohan Ratnayake

“Not only the vehicle importers, the Government has done a good research where they enjoy a good income through taxes. This is a win-win situation for every party,” he said.

“Recently the Government further reduced import duty of hybrid vehicles, which is timely and important. This will support to bring down the burden on Government expenditure of petroleum as hybrid vehicles are environmental friendly and very economical too,” he said.

Colonial Motors PLC has sold over 450 vehicles recording a profit margin of 376 percent during the past nine months.

“From a country’s point of view encouraging hybrid vehicle imports is a long-term solution in reducing petroleum expenditure. Kia has no hybrid vehicles at present. However, the company will introduce hybrid Kia vehicles and Colonial Motors will import them to the Sri Lankan market,” Ratnayake said.

Prestige Automobiles Managing Director Gehan Siribaddana said the performance of the BMW segment has shown a 300 percent growth during the past nine months, while 100 percent growth was recorded from Hyundai motor vehicle sales. The reduction of import duties helped to bring down prices of vehicles.

The sale of luxury vehicle segment was restricted to a fixed volume increase. Therefore, the luxury vehicle segment has been able to indicate a marginal increase only. Nevertheless, the reduction of duties has opened up doors to this segment,” Siribaddana said.

Stafford Motor Company General Manager Sanjeewa Gunaratne said although there was an increase in sales of motor vehicles soon after the duty reduction it has become static compared to the slight improvement now.

“As the company is catering four models of semi luxury and luxury petrol vehicles there is a limited range. Nearly 99 percent of the customer base is from the corporate and public sectors. The company benefited from the reduction of the duties only at the early stage and now there is only a marginal increase. Gunaratne said however, the re-sell market for Honda vehicles is enjoying a distinctive market. At present, the company is negotiating with the Honda mother company in importing three Honda hybrid models to the Sri Lankan market. The company has recorded a growth of 30 to 40 percent corresponding to 2009.