‘Soaring used car prices to have negative impact on economy’ | Daily News
Automotive Values Association of Sri Lanka cautions

‘Soaring used car prices to have negative impact on economy’

For the first time in Sri Lankan history the second hand automobile car prices have hit an all-time high and this is artificially created by a few individuals using the temporary import restrictions as a tool. Second hand vehicle prices have shot up by almost 70%.

General Secretary and Founder Director Automotive Values Association of Sri Lanka Isuru Senaratne (Pictured) said that a similar price hike was witnessed in the 1971 era where prices of popular vehicles such as Volkswagen (from Rs. 28, 000 to 70, 000) and Peugeot cars (from Rs. 40, 000 to 125, 000) increased. “However it did not have a huge impact on the stakeholders of the industry as the demand for vehicles was low.”

He said that the government has to step in and implement a price control system as the present scenario will have long term negative impacts on the leasing and several other industries as well.

“First government must spell out and maintain an auto import unchanged tax policy for at least five years. Then subsequently vehicle demand areas must be identified and temporary imports must be allowed for a short period.”

He also said that local car assembly plants must be given more concessions to increase capacity and identified a lack of a proper public transport system including an electric train network as a key area for the increased demand for motor vehicles. “Due to congestion in public transport and several other issues people opt to own a vehicle while it has also become an icon of prosperity to own a vehicle.”

He recalled that this demand point was also captured by politicians and their election pledges also included promises towards this segment.

Senaratne said that currently there are over 3.2 million vehicles but the alarming factor is that due to the increased demand, over 4,000 ‘nonstandard’ (condemned due to accidents, electrical and mechanical failures, budded vehicles etc.) have invaded the roads. “We are also surprised to note the increased demand for low marketable value vehicles such as Serena vans picking up again.”

He said that today there is no proper ‘vehicle checking system’ not only when purchasing a vehicle but also when it is transferred at the Register of Motor Vehicles. “When it comes to the point of sale it’s the mechanic’s guarantee that is considered and at the RMV only a ‘book’ is transferred sans any ‘quality’ check.

“Sadly Sri Lanka lacks a ‘health check’ for vehicles over 5 years and the only test taken annually is the ‘smoke test’ which is less than basic. We have given several suggestions in this regard to subject Minister Dilum Amaunugama but they are yet to be implanted,” Senaratne said.

He said that authorities must also come up with a system to make ‘auto tech check’ a must before a sale of a vehicle and the monitoring point for this should be the RMW. “Our Association set up in 2012 has over 50 independent and qualified valuers and their services or professional independent and certified technicians ‘auto tech check’ report must be made compulsory when transferring the ownership of the vehicle at the RMW. (Book transfer)

“This will reduce unhealthy vehicles entering the roads.”


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