Sri Lanka vehicle registrations slow in December, Maruti down
ECONOMYNEXT – Sri Lanka’s vehicle registrations slowed to 54,139 units in December 2015 from a high of 61,864 in November as a rush to buy cars before a tax hike eased, an analysis of data from Sri Lanka’s vehicle registry showed.
Motor car registrations fell to 7,177 units in December from 10,084 units an analysis of vehicle registry data by JB Securities, a Colombo based equities brokerage showed.
Indian made Maruti vehicles registrations fell to 3,882 units in December from 5,631 units in November. Maruti registrations peaked in September at 8,029.
Sri Lanka’s vehicle registration started to pick up in the fourth quarter of 2014 as credit turned positive.
After faltering briefly in January after taxes of hybrid cars were raised, car purchases went up as salaries of state workers were raised and interest rates were low, allowing cars to be leased easily. Taxes of smaller cars were cut slightly.
Recent tax hikes, a depreciated currency, and a loan to valuation ratio reduction to 70 percent from 90 percent will tend to reduce car purchases in the months ahead, JB Securities said in a note to clients.
Three wheeler registrations fell to 10,480 units from 13,668 a months earlier. But two wheelers fell to only 30,241 from 31,262.
Two wheeler registrations have been around 25,000 units or higher since September 2015.
The unusual spike in car imports before the budget came from the so-called ‘announcement effect’ where the authorities started measures to restrict imports raising expectations of a tax hike.