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Sri Lanka vehicle registrations plunge 45-pct in August after import controls

ECONOMYNEXT – Sri Lanka’s vehicles registrations fell 45 percent to 17,493 in September 2020 from a year earlier with motorbikes falling to 13,794 units and three wheelers down to 206 units, after import controls were imposed, analysis of motor registry data shows.

Motor car registrations fell to 906 units from 2,385 a month earlier, SUVs and crossovers fell to 511 from 635 units an analysis by JB Securities, a Colombo based equities brokerage showed.

Sri Lanka slapped severe import controls after money printing in March and April de-stablized the country’s soft-peg with the US dollar, leading to a surge in credit.

There have been calls to reform the central bank to prevent frequent balance of payments crises and foreign exchange shortages. Vehicle controls are also having a cascading effect across insurance and other sectors.

Import controls in general are hurting state revenues and denying or pushing up costs of inputs of a number of industries and also spare parts.

Private credit has turned negative in May and July 2020, despite higher deficit spending, stabilizing the currency.

Over the past quarter new vehicle registrations came from vehicles imported before April which were cleared after a Coronavirus lockdown ended.

Mini trucks were down to 11 in August 2020 from 110 units a year earlier, lite trucks were down to 87 from 169 a year earlier.

Mini trucks are classified under a segment that attracts controls, while some commercial vehicles are allowed to be imported.

“The import bans are not applicable to agriculture, service and construction related vehicles,” JB Securities said.

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Heavy trucks were 101 units in August down from 132 units in July and 124 units 12 months ago. Ashok Leyland was 49 percent a share.

Buses were 33 units in August down from 41 units in July and 73 units a year earlier.

Hand tractors recorded 137 units in August significantly down from 266 units in July 2020 but up from 134 units 12 months ago. Financing share was 45.3 percent.

Large tractors recorded 428ust units in Aug up from 393 units in July and significantly up from 183 units 12 months ago.

Tafe is the category leader with a 40 percent share followed by Mahindra with a 25 percent share. Financing share was 80 percent. (Colombo/Oct16/2020)