March 04, 2009 (LBO) – Sri Lanka’s once prosperous motor industry has seen a sharp fall in sales, hit by shrinking credit, a fast depreciating rupee and import restrictions, a senior official of the Ceylon Motor Traders Association (CMTA) said. Revenues for the December quarter had plummeted by 17 percent or 384 million rupees, to 1.8 billion.
“With the corporate sector slowing down, the future for investments in cars is definitely expected to slow down,” said Thakshila Hulangamuwa, vice president, business development, Asha Phillip Securities.
“The rate hike by the leasing companies along with the high inflation has hampered car sales and it has basically pushed the new buyers to hold on or postpone car purchases.”
In addition to this UML had suffered from the decline of government car permits that had flooded the market in the first half of 2008. Car permits were issued as part of a reward scheme for government servants such as doctors and teachers.
“Last year there were about 12 -15,000 doctor car permits in the country. These permits allowed the import of cars that had engines up to 1600 cubic capacity,” said Amarasinghe.
“This helped sales in some of the brand new car companies.”
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