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Sri Lanka car dealers hold prices as demand drops

ECONOMYNEXT – Car dealers offered vehicles at discounted prices despite a sharp appreciation of the dollar and the yen as many prospective buyers delayed their purchases following Central Bank-ordered credit restrictions, traders said.

Importers of small Indian and Japanese cars were calling potential customers who had made inquiries recently asking if they have bought a vehicle and if not to make use of generous discounts on fleets of cars already imported.

A man in Borella said had a telephone call from a representative of AMW reminding him that a 72,000 rupee discount was still available on a Suzuki Alto 800. “They followed up the call with a text message saying the offer will close soon and to make the purchase asap,” the prospective buyer said,

On Sunday, several car importers took out advertisements saying they had not raised prices in keeping with the appreciation of the yen and urged customers to take advantage of the vehicles imported before the rupee fell sharply.

A private importer said the market was in chaos on Sunday as many dealers who had bought concessionary duty permits of doctors were stuck following the moratorium on car permits for six month.

“There was a frenzy to collect car permits and import fleets of vehicles to beat the budget in November,” a private dealer said. “Many thought that the government will stop the permit scheme after November.”

Authoritative government sources that the finance ministry was contemplating reducing duty on small cars, or at least bring them back to the pre-August level while increasing taxes on bigger cars from the November budget. (COLOMBO, October 3, 2018)

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