Vehicle importers hit hard by import ban

July, 1, 2020

Sri Lanka’s automobile import sector had to face numerous challenges in the past few years. Last year the sector faced a major price increase due to the imposition of stiff luxury taxes which resulted in a massive drop in vehicle demand.

Further, the sector also experienced a drop in sales following the Easter Sunday attacks last year in addition to the luxury tax imposed on vehicles by the previous government in October last year.

However, the sector is affected once again as the government rushed to implement measures to protect the country’s currency by slapping a temporary vehicle import ban in April in the face of the COVID-19 threat.

Meanwhile, speaking exclusively to Ada Derana first at 9 in this regard, Chairman of Ceylon Motor Traders Association (CMTA) Sheran Fernando expressed the following:

“Ceylon Motor Traders Association members who are the international Manufacturers of automotives have placed orders with the manufacturer and the orders that were placed at the point of the import ban have to be allowed into the country. Now the government is saying that these vehicles will be allowed in as long as we can negotiate credit terms with the manufacturers. But, that is quite difficult.  Our trading agreements define our terms of trade and these are encapsulated in our agreements. So, to suddenly change our terms of trade is something that is very difficult to do,” he stressed.

Speaking further, Fernando also stated that they face a massive challenge as automotive spare parts have also been included in the ban resulting in a major loss of revenue earned through after-sales services and maintenance.

“Our customers, our workshops need spare parts to continue to be in business. Our customers need these spare parts for their vehicles to be on the road. So, if we don’t have our spare part revenue that really impacts the ability for our members to stay in business. So the most fervent plea to the government is to please lift the ban on automotive spare parts.”

Meanwhile, Prestige Automobile (Pvt) Ltd Director- Sales and Marketing, Niranga Peiris also expressed his thoughts in this regard.

‘’ We have been experiencing numerous challenges from last year. Unfortunately, after the Easter attack sales fell drastically. Afterward, the major blow was in October last year. The luxury tax ceiling was taken off. This means all vehicles regardless of their engine capacity were applicable to luxury tax and which actually increased our prices significantly and the sales have dropped drastically. What we urge the relevant authorities to have long term policies instead of ad-hoc policies. The reason is that it is beneficial for the government as well to have a clear plan for their duty collections from vehicles and we urge authorities to look at electric car structure and make those structures beneficial for electric car importers and to have those services available and we will be glad to see some framework coming into play."

Photo Caption: From Left to Right -Sheran Fernando Chairman of Ceylon Motor Traders Association (CMTA), Prestige Automobile (Pvt) Ltd Director- Sales and Marketing, Niranga Peiris



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