Japan Ups Sri Lanka Auto Market Share with Hybrids. India's Share Down to 45pct. China Third with 5pct

01st March 2012, www.lankabusinessonline.com

Japan has increased its share in Sri Lanka's auto market to 36 percent from 33 percent in value with a surge in hybrid vehicles, amid a boom coming after a cut in taxes, Sri Lanka's main business chamber said.

The Ceylon Chamber of Commerce said in an analysis of the auto market that market leader India's share has in terms of value had fallen to 45 percent to 51 percent. China was third with 5.0 percent.

The value of imports had increased to 219 billion rupees from 117 billion rupees.

The CCC said 57,886 cars and were registered in 2011 up 11 percent while 525,421 vehicles of all types were registered in 2011, up 32 percent from a year earlier including over 250,000 motor cycles.

In 2011, 5,927 hybrid vehicles were imported up from 438. "This growth momentum is likely to continue with the increase in fuel prices," the Ceylon Chamber of Commerce said.

"Japan is the leading supplier of hybrid vehicles into Sri Lanka in almost all categories of vehicles except for cars of cylinder capacity exceeding 2000 cc (cubic centimeters), where Germany is the main supplier."

Transport between 5 to 20 tonnes have risen over 10 fold to 48,384 to 4,359. India supplied 91 percent of the total followed by Japan at 15 percent.

The Chamber said motor cars of less than 1,000 cc engine capacity had grown 222 percent partly helped by Tata Nano cars.

More than 100,000 petrol driven three wheelers have been imported in 2011. Diesel three wheeler lagged are there are only 20,000 in the country. The chamber said 99 percent came from India.

Sri Lanka Increases Taxes on Imported Vehicles

25th April 2011, www.lankabusinessonline.com

Sri Lanka has raised import duties on several categories of petrol-engined cars and three wheelers with steeper increases seen in larger hybrid vehicles, which had exceptionally low taxes earlier, officials said.

A senior Treasury official said there were revisions on several categories of vehicles.

On petrol cars with standard engines with capacities below 1,000 cubic centimeters the effective total tax rate will go up from the current 95 percent to 120 percent.

Between 1000 to 1,600 cc the effective rate will go up from 119 to 128 percent. On three wheelers the effective rate will go up from 38 percent to 50 percent.

On hybrid cars with engines below 2,000 cubic centimeters total duties will go up from 38 percent close to 50 percent.

Deputy director general of customs Ajantha Dias said an excise duty was raised by 8.0 percent on small hybrids but it will take up the total duties by a larger amount when added together.

On hybrids between 2,000 to 3000 cc duty will go up close to 75 percent and above 3,000 cc to 100 percent.

At the current rates even the large hybrids are taxed at a lower rate than smaller petrol cars.

Related Info :

• Sri Lanka Vehicle Imports up by 75.9pct in 2010 amidst Strong Economic Growth

• Sri Lanka Vehicle Tax Slash Lauded by Motor Industry. SUVs to Come Down by Rs4mn. Car Prices too Come Down

• Sri Lanka Removes Duty on Electric & Hybrid Cars

Sri Lanka Removes Duty on Electric & Hybrid Cars

23rd November 2010, www.lbo.lk

Sri Lanka has made electric and hybrid cars duty free, while value added tax and rates of depreciation allowed for used cars has also been increased, a budget for 2011 said.

Another tax, social responsibility levy has been removed and nation building tax reduced from 4.0 percent to 3.0 percent.

But a Treasury official said excise taxes have been raised to recoup revenue losses from other taxes.

Though the price of new cars may not come down, an official said the price of older car could come down.

Some commercial vehicles were already on a lower duty.

President Mahinda Rajapaksa said electric and hybrid vehicles will be completely freed from excise duties and value added tax to promote environmental friendly vehicles.

Motor homes will also be made duty free, according to the budget document.

Sri Lanka allows cars up to three and a half years old to be imported.

Now three year old cars will be depreciated to 60 percent compared to about 80 percent earlier. Cars three and half years old will be depreciated to 55 percent.

The budget speech said the depreciation tables will comply with World Trade Organization rules.

The government will also allow state workers and state corporation employees to import cars at a lower duty.

A provision that allowed people who paid taxes of more than 500,000 a year for three consecutive years to import cars at 25 percent duty has been removed in the budget.