Sri Lanka vehicle registrations flat, used cars up

Feb 25, 2014 (LBO) - Sri Lanka's vehicle registrations fell 1.5 percent to 27,827 in January 2014 from a year earlier, with used hybrid cars up and three wheelers down, a research analysis shows.

Motor car registrations rose 35 percent to 1,949 in January 2014 from a year earlier, helped by the sale of 914 pre-owned Toyota vehicles (up from 352 a year earlier) and 338 (up from 202) Honda vehicles, an analysis by JB Stockbrokers shows.

Luxury SUV and crossover sales were almost double at 423 units in January 2014, up from 216 units a year earlier.

Luxury vehicle sales, including cars picked up after tax slashed permits by state workers were given to state workers. Many were sold to ordinary citizens in a tax arbitrage exercise.

Small Maruti/Zuzuki cars were half the sales of SUV's at 192, almost unchanged from last year's 190 amid high taxation of smaller cars.

In Sri Lanka vehicles are figure among the worst interventionist and unjust taxation practices by the elected rulers and state workers, critics say.

The elected ruling class gets completely tax free cars and state workers tax slashed cars, following a policy that got expanded since the 1980s.

Analysts say unlike in Europe, there had not been a concerted effort to end the tax privileges of the ruling classes in Sri Lanka, though the current administration has the distinction of ending unequal income taxation between rulers, state workers and ordinary citizens.

In the past, interventionist taxes on cars and as well as petrol and diesel had also led to disproportionate imports of heavier diesel vans and pick-up trucks, in place of petrol cars.

Sri Lanka now taxes large hybrid vehicles at lower rates than small petrol cars. The larger cars are more fuel efficient, allowing users to drive a bigger car while spending less on fuel than they would otherwise have done for a similar-sized standard car.

Batteries that drive hybrids, which have nickel and lithium metals have to be recycled at a future date, to curb environmental damage.

Registrations of three wheelers were down 29 percent in January 2014 to 5,802 units. Motor cycle sales were up 17.1 percent to 16,402.

Meanwhile JB Stockbrokers said mini trucks of less than one tonne at 1,305 units was steady with India's Mahindra having a 48.8 percent share and Tata 49.7 percent other trucks were declining with sharp falls in the heaviest trucks.