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Car Prices too Come Down 02nd June 2010, www.thebottomline.lk, By Santhush Fernando The local automobile industry, badly hit hitherto by the global financial crisis and exorbitantly high domestic tax regime, is expected to see a drastic drop in vehicle prices after Treasury slashed excise duty on vehicles yesterday. Almost all vehicle importers whom The Bottom Line spoke to were very positive over the tariff revision, but majority opined that they were in the dark regarding the exact net d
uty levels applicable. (Pl see below JKSB Comment with itemwise chart of new duty/tax). “It’s very difficult to tell precisely. However, this will give a badly needed boost to the automobile industry. At a glance, the price drop of cars may range from Rs.300,000 to Rs.1 million. Sports Utility Vehicles (SUVs) could anticipate a drastic decline up to Rs.4 million, while double cabs could come down by Rs.1.5 to 2 million, roughly,” President of Ceylon Motor Traders’ Association (CMTA), Zeeniya Rasheed said.
The prices of cars will come down drastically.5%. Fifteen percent surcharge. . However. According Fernando. and Excise Duty. Value Added Tax (VAT) of 20% and three ‘varying’ taxes – Customs Import Duty (CID). which is also applicable on electrical appliances imports. depending on engine capacity and type of fuel. “It’s really difficult to ascertain the exact formula as there’s cascading structure with one tax touching another tax. “As it is there’s a huge price differential between imported and locally-assembled vehicles. Chairman United Motors PLC. surcharge of 15%.Unconfirmed sources say that the excise duty applicable to vehicles with an engine capacity below 1. Road and Infrastructure Development Levy (RIDL) of 2. said that the tariff revision would be a relief to both importers and buyers. “It’s certainly a welcoming move. Cess.5%.” an automobile industry source said. alike.” he added. currently a Pajero was subject to between 300 to 400% total compound tax. Nation Building Tax (NBT) of 3%. Ranjith Fernando. As many importers refrained from bringing large stocks and kept minimum stocks.” he said. It’s very complicated. At present vehicle imports are subject to six ‘fixed’ taxes – Ports Authority Levy (PAL) of 5%.000cc has come down to 7 from 34%. Social Responsibility Levy (SRL) of 1.600cc would see excise duty drop from 44 to 17% while luxury vehicle categories would be subject to 64%. with this tariff cut prices of the latter will also have to come down. has also been scrapped. Speaking to The Bottom Line. instead of the current 27%. Nobody knows until we get confirmed through a ‘Cusdec’ (Customs declaration).000 to 1. The new tariff is likely to have an impact on locally-assembled vehicles. Vehicles with the capacity between 1.
a total net tariff of 217% was applicable for petrol vehicles with an engine capacity between 1.General Manager – Sales and Marketing. Associated Motorways (Pvt) Ltd. on its CIF (Cost Insurance & Freight). Vehicle registrations could see an immediate improvement in 2010 with the economy gaining traction coupled with low interest rate.com/2010/06/sri-lanka-vehicle-tax-slash-lauded-by. Chairman/ Managing Director of Douglas and Sons Group of Companies. in our view. The number of brand new vehicles registered in 2009 was a mere 7. tax reforms could further benefit vehicle imports. http://investsrilanka. while vehicle categories from 1.3. “In addition.000cc were subject to total net duty of 290 and 299%.11.63%. as they are affordable.4 billion earned in 2007. Currently. dropped to Rs. .” he pointed out. says it expects vehicle registrations in 2010E and 2011E to increase.06 billion in 2008 and to Rs. “There are nine different types of sub-duties. Shivantha de Zoysa said that they were yet to ascertain the full impact of the tariff revision.325 registered in 2008.” the report noted. which was a massive drop of 70. indicating an upward movement. we see a 51percent increase of the registered vehicles in Sri Lanka. But during that time the number of Indian Vehicles in the country has increased up to 244percent.600cc.437 when compared with 25. According to de Zoysa.” it stated. 17 leading automotive companies who manufacture world class automobile parts. durable and credible.html INDIAN VEHICLES INCREASE BY 244% "Since 2003-2007. recently. “New vehicle registrations over the first four months of 2010 amounted 95.000 to 1.17. while the government had introduced the tariff cut on excise duty. To day we have with us..600 to 2. respectively.929.blogspot. addressing the large gathering including their dealers and media present at the Seminar organized by DSL on Indian Auto parts for profits. petrol vehicles with an engine capacity below 1. Vehicles registrations expected to increase In an Equity Research Report. releases by Bartleet Mallory Stockbrokers (Pvt) Ltd.000cc are subject to a total net duty of 187%." said Saroj Perera.25 billion in 2009. and they present you about their products and quality and we are glad to host them here in our country.000cc and above 2. prior to the duty revision. This is a clear sign that our people have put their trust in Indian Automotives. Government tax revenue. in contrast to Rs.
India is the 5th Largest manufacturer in this field and hold the fastest growing car market at present. a well known Trainer. Indo -Sri Lanka FTA has sent out a signal that India is rady to trade. It is a professional company with a strong sales force and a wide spread dealer network over 1300. India has gone high in terms of quality. Representatives from main Indian Suppliers of DSL were present at the occasion and presentations were given on each company and their products. Indian vehicles now hold 31percent of total vehicles imports into Sri Lanka. The products of the companies were exhibited in the hall for the gathering to get a comprehensive knowledge on the automotive products. Talking on the India-Sri Lanka auto industry. Gabriel India Limited ."Gabriel" shock absorbers. In FTA and CEPA we have lot of space for investment and business. Every year they double the Annual Export Turnover of exports between India and Sri Lanka recording a 5. 2."RADO" Clutch Disc. Austin Engineering Company Limited . Rivets etc. Economic and Commercial Counselor of Indian High Commission in Sri Lanka. Cockerill Exports Pvt Ltd . Japanese market has gone down from 70percent in 2006 to 46percent in 2007. We note an explosive growth of 244percent over four years and 336percent growth in Indian Cars.Largest Disc Brake pad manufacturer in India and also produces Brake Shoes. Not only to trade but also to invest. He noted in his address that India is Sri Lanka's largest trade partner and the most balanced partner. 1. Clutch Buttons. Nalaka Hewamadduma.Manufacturer and exporter of wider range of auto and industrial Ball and Roller Bearings and its components. . and covers. Federal Mogul Corporation . it was under its founded company Douglas and Sons. Presently Maruti holds 27percent market share. Especially in the automobile sector. 5. Clutch facing etc. price and satisfaction. DSL was incorporated on 8th January 1980 and its commercial operations started on July 1986. He further noted that presently India is in a Side-Mixed-Shift where so many economic shifts take place. The main reason behind this is the cost effectiveness in Manufacturing and India is very much concerned on the domestic market where they have strong entrepreneurs.The chief guest of the evening was Santhosh Jah. 3. This was very useful for the dealers who were present to enhance their knowledge on new advanced products. piston rings & Anand Engine Bearing 6. And out of that 20-25 Bn$ is expected from the exports. Mentioning more on Indian Auto industry. specifically vans and busses. Teeth Lining. in 2004/5 the value of Indian Auto Industry was 9 Bn$ and they try to reach value of 40Bn$ by 2015. Allied Nippon Limited . Prior to this. Brake Linings.For "Cockerill" tiller and Tractor Spares. Speaker and a consultant presented on Douglas and Sons Limited (DSL). Bajaj Export Corporation .2 Bn$ this year. We see a tremendous growth of 9percent in consecutive 3 or four years and a noticeable manufacturing boom in India where manufacture sector is so higher than the service sector."Goetz" piston. who are in the Automotive Spare Parts business for over 40 years. 4.
motortraffic.Universal Joint Cross. Victor Gasket India . rubber parts. A Sri Lankan Attraction Built by pushpitha on Friday. RDH Auto India . including talented drivers and riders and the myriad of fans who follow the competitive scene closely. including circuit racing. New Allenbery . in the recent years India has emerged as a manufacturing hub for auto components because of cost effectiveness. diesel heater plugs etc. Neolite Industries Pvt Ltd . ."NAW" Gear Parts 12. oil transducers. 14. rallying. established manufacturing base and high quality of components manufactured in India. such as oil pressure switches. Madras Engineering Industry . fasteners etc. electrical parts. Indian High Commisioner of Sri Lanka noted that automotive sector is an area where significant cooperation between India and Sri Lanka is possible. peopeller shaft.Synchronizer rings. As he noted. Alok Prasad. July 22nd. Apart from direct imports from India."S&F" Oil seal."FUSI" electrical parts.'KBX" Brake parts. Injector Seal etc 15. Sri Lanka it self can emerge as a significant hub for auto components through collaborations with Indian auto companies and by establishing joint ventures in this sector. Many different motoring events may be enjoyed in the island nation."Victor" cylinder heat gasket 16. Paratap Singh and Sons ."Gravity" Horns 8.7.gov. by Kavinda Hettiarchchi ~ island. sliding pads. MVD Auto Components Pvt Ltd .lk/statistics.php Motor Sport Events 2011. wheel wrench etc. 2011 Despite being a comparatively small nation Sri Lanka has more than its share of motor racing enthusiasts. washers etc In his Message. 13.lk ~ http://infolanka. Gravity Auto Electric Corporation ."MEI" slack Adjsuters 9.asia/opinion/sri-lanka/indian-vehicles-increase-by-244 http://www. Yugal Precision . 10. Kross International ."Neolite" Automotive lights 11.
by Lalin Fernandopulle The booming vehicle market is expected to further surge in sales this year following import duty reductions last year that gave a kick start to the once ailing motor industry in the country. power and performance. Not to be missed are the numerous super cross events with all the thrills and spills enthusiasts have come to expect in this sensational motoring spectacle.sundayobserver. Specially constructed tracks are designed to bring out the best in the daredevil drivers and riders who have achieved exceptional skill in this enthralling sport. Highlights include the Southern Eliyakanda Hill Climb. sophisticated high performance motorcycles as well as more sedate two wheelers may be seen in the different classes. Competitors driving state of the art off-road vehicles vie for supremacy executing perfect ‘opposite lock’ techniques while amateurs in more mundane motors are not forgotten as there are separate events for them. Typically motor sport events in Sri Lanka include different categories for motor vehicles of differing engine capacities. . Sigiriya Super Cross.super cross and hill climbs. Motor vehicle dealers are confident that there will be a 100 percent growth in sales this year due to the drastic reduction in import duty which has increased sales by around 75 percent since mid last year. www. Hill climbs are also well represented in the local motoring scene. which is unsurprising given that the island nation contains many hills and mountains. many using sophisticated automotive machines. http://worldvillage. Foxhill Super Cross. One of the excellent hotels in Nuwara Eliya Sri Lanka. Circuit racing naturally commands a vast fan following in Sri Lanka. Walawe Super Cross. Andrew’s. Major circuit racing events include the Pannala Circuit Meets which are organized into several rounds including a night race. Gunners Super Cross and the Gajaba Super Cross. and the Katukurunda Circuit Meet. Typically the different categories for races include such vehicles as formula cars.The visitor in search of fine Sri Lanka hotels should look no further than the Jetwing St. Rallying also attracts great interest in Sri Lanka. Well known super cross races include the Carlton Super Cross.com/motor-sport-events-2011-a-sri-lankan-attraction 17 JANUARY 2011 Sri Lanka Vehicle Sales to Double in 2011 following Rate Cut 16th January 2011. high performance competition vehicles (such as the Mitsubishi Evo) as well as more modestly equipped cars. Similarly the motorcycle events are categorized by engine capacity and performance.lk. Sri Lanka boasts many accomplished circuit racing specialists. Cavalry Super Cross. this pleasing accommodation always meets the expectations of its guests. Radella Hill Climb and Mahagastota Hill Climb.
The import of trucks and other transport vehicles have increased by around 57 percent to 9. Tilak Gunasekera said that vehicle sales had shot up sharply since the slashing of the import duty mid last year and added that most dealers had recorded substantial growth in sales. The import of vehicles has increased sharply since the liberation of the North which is fast returning to normal.564 from January to October 2010. Vehicle import revenue will contribute to the economic growth which is predicted to be around eight percent this year. “The motor car market will record 100 percent growth this year giving a new lease of life to the once dormant market that plummeted sales by around 60 percent”.Central Bank data revealed that import of buses.183 from a year ago driven primarily by import of new cars.Chairman Ceylon Motor Traders Association.991 from January to October last year.Around 3. The vehicle market in Sri Lanka went through a bad patch a few years ago due to a 300 percent import duty. the highest in the world.700 new cars were registered in 2009.700 new cars were registered from January to September last year while around 5. The number of registered vehicles rose 61 percent in October alone last year to 34. New registrations went up 75 percent to 284. trucks and other transport vehicles have risen sharply following the duty reduction. . Gunasekera said. Vehicle merchants said that the reduction of import duty will help government coffers as there will be more vehicle imports. The import duty on vehicles is yet high compared to many countries in the region. statistics revealed.
blogspot. The 70 percent duty on used cars was reduced to 55 percent.html . Sri Lanka imports new and used vehicles from Japan and India. Related Info : • Sri Lanka Car Imports Double after Duty Break • Sri Lanka Removes Duty on Electric & Hybrid Cars http://investsrilanka.com/2011/01/sri-lanka-vehicle-sales-to-double-in. The sale of new cars had been around two to three units a month before the reduction of duty while today sales have peaked. Buyers of new cars are on the waiting list as the lead time is around four months. The VAT component on imported new vehicles was slashed to 12 percent from 20 percent in the 2011 budget that gave incentives to used vehicle importers. “The second-hand vehicle market has benefitted from the concessions given through the budget”.Gunasekera said the car sales market which had dropped by around 60 percent received a big boost with slicing of duty and added that most importers are doing well.Japan has a huge used vehicle export market due to the low price of new vehicles. Gunasekera said.
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