Jan 25, 2015 (LBO) – Sri Lanka’s vehicle registration momentum came down in Dec with the reinstatement of the LTV rule and higher incidence of duty on vehicles, JB Securities said in a research note.
Total motor car registrations recorded 7,177 units in Dec down from 10,084 units in Nov but significantly up from 4,311 units recorded 12 months ago.
Brand new car registrations recorded 5,015 units in Dec down from the record set in Nov of 6,732 units but significantly up from 1,939 units recorded 12 months ago.
Small cars (< 1,000 cc) accounted for 95 percent of volumes – Maruti accounted for 3,882 units (mainly Alto) followed by Micro with 522 units (Panda), Tata with 215 units (Nano Twist and Indica) and Hyudai with 191 units (Eon). Financing share in small cars is a high 75 percent. The 70 percent LTV rule is applicable to approvals NOT disbursements, thus the high finance share in Dec may be due to the spill over of Nov leasing approvals.
Pre-owned car registrations recorded 2,162 units in Dec significantly down from 3,352 units in Nov and down from 2,372 units recorded 12 months ago. This is the lowest number in 2015, this category is mainly hybrids which were most impacted by the increase in tariffs.
The tariff incident increased due to the basis on which customs would determine the value of a vehicle (changed from using the commercial invoice which in most cases was under invoiced to predetermined values) and increase in the excise duty. For a popular model like a Toyota Aqua the duty increase alone was LKR 0.8 million, factoring in the 9 percent depreciation of the LKR against the Yen in the last few months the price of the car has increased by LKR 1 million. Financing share was 67 percent.
Premium brands recorded 69 units in Dec (lowest for the year), lower than 74 units the previous months and 99 units 12 months ago. Mercedes recorded 26 new units (C-class 7, E-class 15 and S-class 3) and 9 pre-owned units (C-class 3 units, E-class 2 units). BMW recorded 15 new units (3- series 7, 5-series 6) and 5 preowned units.
Electric cars recorded 242 units in Dec down from 494 units the previous months but up from a mere 10 units 12 months ago. Many of the registrations in Dec may have been existing inventory with dealers or those who opened their L\C’s before Oct 17. Prior to the changes in the tariff rate and basis of valuation the incident of excise duty on a Leaf was approximately LKR 0.2 million, the excise tariff was increased from 5 percent to 50 percent and the basis of valuation was changed – the revised tariff is LKR 2.4 million, i.e. an increase of LKR 2.2 million. The electric car party is over, expect a dramatic slump in the numbers.
SUV registrations recorded 605 units in Dec down from 806 units the previous month and significantly down from 1,603 units 12 months ago. Nissan jumped to the front recording 172 units (Hybrid X trail 160), Mitsubishi recorded 119 units (Outlander 85, Montero 31), Toyota recorded 87 units (Prado 72, Harrier 12), Honda 76 units (Vezel 73).
Hybrid registrations recorded 2,221 units in Dec significantly down from 3,247 units the previous month and 3,649 units 12 months ago. In terms of volume Suzuki is the market leader due to its small car offering – Wagon R hybrid.
Van registrations recorded 518 units in Dec (lowest number for the year) significantly down from 802 units the previous month but slightly up from 468 units 12 months ago. Toyota recorded 210 units and Suzuki recorded 148 units, volumes were double this number a few months ago. Financing share was 71.4 percent.
3-wheeler registrations recorded 10,480 units in Dec down from the record of 13,668 units in Nov but significantly up from 7,700 units 12-month ago. Bajaj segment share dropped to 75.6 percent from its normal 88 percent share and TVS share jumped from around 7 percent to 16.8 percent – TVS passed on part of the benefit of its existing inventory that was not subject to the duty increase of LKR 100,000 on three wheelers.
2-wheeler registrations recorded 30,241 units in Dec down from 31,262 units the previous month but down from the election fuelled record set 12-months ago of 38,218 units. This is one of the few categories that has not seen a reduction in unit volumes since no major changes were made to the tariffs. Segment share is well balanced amongst the three main players – Bajaj (27.6 percent), Hero (25.8 percent) and Honda (24.2 percent) followed by TVS with 12.3 percent. Bajaj due to a lack of a scooter offering has lost share whilst the others gained share due to the rapid growth of the scooter market (38 percent of the market). Financing share was 56.7 percent.
Pickup truck registrations recorded 457 units in Dec similar to 462 units the previous month but down from 736 units set 12 months ago. Tata is the leader with a segment share of 65.2 percent. Financing share was 79.2 percent.
Mini truck (payload < 1 MT) registrations were 1,615 units in Dec slightly down from 1,772 units in Nov but up from 1,267 units recorded 12 months ago. Tata is the leader with a segment share of 60.8 percent followed by Mahindra with 33.8 percent. Financing share is a high 93.9 percent.
Lite truck (payload < 2 MT) registrations were 785 units in Dec slightly up from 764 units the previous month but significantly up from 345 units recorded 12 months ago. Mahindra is the market leader with a 61.2 percent share. Financing share was 90.7 percent.
Medium trucks (payload < 5 MT) registrations were 176 units in Dec similar to 174 units recorded the previous month but down from 203 units recorded 12 months ago. Isuzu is the market leader with 31.8 percent followed by Mitsubishi with 22.2 percent and Tata with 17.6 percent. Financing share was 80.1 percent.
Heavy truck (payload > 5 MT) registrations were 152 units in Dec up from 114 units the previous month but down from 182 units 12 months ago. Tata was the market leader with a 46.1 percent share followed by Lanka Ashok Leyland with 39.5 percent. Financing share was 86.2 percent.
Buses recorded 229 units in Dec down from 244 units the previous month and significantly down from the election fuelled 636 units recorded 12 months ago. Ashok Leyland is the market leader with a share of 56 percent. Financing share was 91.3 percent.