Mar 24, 2013 (LBO) – Sri Lanka’s vehicle registrations hit new low of 23,544 in February 2013, down 44 percent from a year earlier, after taxes were hiked to curb imports, an analysis by an equities research house shows. Registrations of Maruti Zen models were down 88 percent in February 2013 from a year earlier and BMW 5-series was up 411 percent.
According to data from Sri Lanka’s motor vehicle registry analyzed by JB Stockbrokers, car registrations, which were recovered from a low of 1,076 in October 2012 to reach 1,435 in January 2013 plunged again to 1,058 in February, down 69 percent from a year earlier.
Three wheelers fell to 6,478 in February from 8,178 in January, and motor cycles fell from 14,002 to 11,941.
In February there are only 29 days, which may partially explain the downturn, analysts say.
Vehicle were hiked as part of measure to fix a balance of payments crisis, triggered by a spike in bank credit triggered by energy subsidies, which was ultimately accommodated by printed money (central bank credit).
Analysts had warned at the time that currency weakness which is caused by excessive money printing and low interest rate, will only worsen credit when high tax yielding imports fal