Sri Lanka’s vehicle registrations expected to down to a 17-year low in 2020

Oct 17, 2020 (LBO) – With the restriction on vehicle imports, First Capital Research (FCR) expects that Sri Lanka’s vehicle registrations may down to a 17-year low in 2020.

“We expect vehicle registrations in 2020E to record half of the last year amount while also being the lowest figure since 2003 and being subdued in 2021 as well,” the FCR said.

“New Vehicle registrations have already fallen to a decade low in 1H2020.”

However, the import of three-wheelers and motorcycles have suffered a dipping trend since 2015 even before the import ban amidst the previous tax hikes and LTV regulations.

Government to ban vehicle imports for at least a year to survive a possible forex crisis as average vehicle imports constitute nearly USD 800Mn or 4 percent of total imports for the previous 13 years.

Registered vehicle prices have shot up while unregistered vehicles are scarce due to import restrictions, resulting in lesser transactions and lower affordability as a result, competition is intensifying in the Leasing segment in NBFI sector due to attractive rates by Banks.