Sri Lanka vehicle registrations subdued in April
ECONOMYNEXT – Sri Lanka’s vehicle registrations were subdued in April 2016, continuing a trend seen from January, with 35,753 vehicles being registered, down from 48,988 a year earlier, when a credit bubble was at full swing, data shows.
Motor car registration were down to 3,618 in April from 5,116 a year earlier, with Indian made Maruti cars used by less-affluent people and first time buyers taking the biggest hit.
Registrations following a tax hike and credit restrictions in January 2016 fell to 255 in the month, 525 in February, 639 in March, against 4000 to 5000 units in 2015, an analysis of vehicle registry data by JB Securities, a Colombo-based brokerage shows.
In April Maruti registrations picked up to 1,142, which JB Securities said could also be due to the ending of a go-slow by workers at Sri Lanka’s vehicle registry.
Many Maruti vehicles were bought by state-workers who got a 10,000 rupee a month salary hike in 2015.
In April 4,151 three-wheelers were registered, down from 10,839 a year earlier. JB Securities said a three-wheeler now cost 600,000 in Sri Lanka and credit restrictions meant that a 180,000 rupees would need to be paid up front even to lease one.
Less affluent people including masons, painters, and small business owners were buying three wheelers to raise their living standards and productivity.
Credit restrictions were placed in a mis-guided attempt to stem a balance of payments crisis precipitated by low interest rates and money printing by the central bank.
The rupee also fell sharply over the last year.
In April 23,956 motor cycles were registered, down from 27,669 a year earlier, and from 30,000 in December. (Colombo/May24/2016)