July 03, 2012 (LBO) – New vehicle registrations in Sri Lanka may drop up to 40 percent in 2012 and dreams of motor bike owners to move on to small cars will be shattered, industry officials said. In 2011, 525,421 new vehicles including 253,331 motor bikes and 57,886 motor cars were registered, up 46 percent from a year earlier.
The Ceylon Motor Traders’ Association, an industry body, says higher import duties, a weaker exchange rate and higher interest rates is slowing demand for motor vehicles in the island.
“With all these negative factors we can expect a drop of around 30 to 40 percent in vehicle registrations to an estimated total of around 360,000 this year,” Tilak Gunasekekera, chairman of the Ceylon Motor Traders Association said.
Car registrations at the Department of Motor Traffic have dropped 26 percent to 21,884 in the first half of 2012 from 29,883 a year earlier.
Motor trade officials say a state import duty hike has sent prices of smaller cars (below 1000 cubic centimeter engine capacity) like the Indian-made Maruti Alto up putting them beyond reach of the people with modest incomes. Sri Lanka’s finance ministry jacked up taxes on cars in