The motor industry in Sri Lanka today is at a very low edge due to low sales rates, and in a bid to overcome that situation small economical Japanese cars will be imported and introduced to the local market, said Ranjan Peiris the newly appointed President of the Vehicle Importers’ Association of Sri Lanka (VIASL).
“We should improve this situation by trying to provide a range of quality and economical vehicles to the consumer, particularly quality Japanese domestic vehicles,” he said speaking to Daily News Biz Motor.
However the problem that the association is facing is finding small Japanese vehicles to go well with the customs duty valuation method in Sri Lanka. As at now, the local agents of various brands which are mostly owned by foreign subsidiaries are taxed on the valuation provided by the manufacturer as opposed to the used car importer who has to pay a tax based on the maximum retail price mentioned on the manufacturers’ website the President alleged.
“For instance if an identical car is imported by an agent and a used car dealer, for cercain models the agent will be paying a lower import tax as they are being taxed on a valuation provided by the manufacturer, as opposed to the tax a used car dealer would be paying based on the maximum retail price mentioned on the website which is apparantly higher.
Even for a 3-year-old car, the used car dealer is forced to pay an import tax that would have been paid for a brand new model of this nature, hence percentage wise for a 3 year old car we are forced to pay import taxes for almost few times the value of the vehicle,” he said.
This is a highly biased and an unfair method of calculating taxes mainly devised to minimize the gap between a brand new vehicle and a used Japanese domestic vehicle. However, the price for this is ultimately paid by the end consumer who should have received the benefit of the lower tax percentage when buying a 3 year old vehicle. Due to this reason the President urged the government to devise a system where agents’ valuations are being audited in order to gauge the accuracy of the valuation. Used car dealers are only given a 15% discount on the maximum retail price mentioned in the manufacturers’ website. This however, does not reflect the actual value or the purchase price of the vehicle since the dealer discount in most cases is much more than 15%, and the value of a 3-year-old car is considerably lower.
Peiris said after assuming duties as the President of VIASL a few days ago his idea was to get down small vehicles to cater to the small vehicle market in Sri Lanka which was very much bigger. Although they posses high end Japanese vehicles like Lexus, Toyota, Mitsubishi, Nissan and Honda it was time to think of a smaller vehicle below 1,000 CC where the market share was greater and suits a person just getting to a car from a motor bike or a beginner or a professional like a junior doctor who has just entered the medical field. But if one talks of small vehicles on the road today, they are being used by people who have just started their careers. “We are much more concerned about that portion of the market and thinking of how we could cater the general public with a reliable economical and quality vehicle, “he said.
Peiris said Japanese domestic vehicles are unmatchable quality wise to any other vehicle in the region and recalled the vehicles imported in the late 70’s, the Toyota Hiace which is commonly known by the public as Rukmami Hiace and the Mitsubishi Delica called Udapadel and Yatapadel by the public and the Lancer known as Tubelight Lancer and L Light Lancer, Datsun Sunny called the Batu Sunny. These vehicles were yet used specially in Badulla, Bandarawela, Diyathalawa and Kandy areas for hired transportation and that’s ample proof of the high quality of Japanese domestic vehicles in terms of being economical, durable and reliable.
The President emphasized that these vehicles imported in the late 70’s had been manufactured to be used in the Japanese domestic market and not for the export market. The vehicles manufactured to be used in the Japanese domestic market were far superior in quality when compared with the vehicles manufactured for the export market by Japanese companies.
Japanese domestic vehicles are also far more superior safety wise with more safety features like air bags, ABS and cutting edge auto brake radar systems. These safety devices that are found in Japanese vehicles cannot be fitted in Sri Lanka just as adding a Hi-Fi stereo to a vehicle, he cautioned.
Especially the most commonly used small vehicles in the region are not equipped with such safety standards and are a road hazard to the driver as well as other motorists on the road. These substandard automobiles are not even equipped with minimum safety standards and not even being provided road license to run in its mother country in certain states. Hence the president urged the government to establish safety standards when importing vehicles to the country which in return will reduce motor accidents.
Sri Lankans are privileged therefore to own a Japanese domestic vehicle which consists of these safety features which cannot be found in most of vehicles manufactured in the other Asian regions. “Our main objective is to provide economical, durable and quality range of vehicles to the consumers in Sri Lanka at an affordable price,” the President assured.
Furthermore, most of the Japanese domestic models VIASL import are below the 1500 cc engine capacity and are hybrid models. Some of them are plug in hybrids or electric cars with zero emissions and limited use of fossil fuel. In an era where most countries are striving for maximum efficiency the bargaining power of local agents of foreign origin has robbed Lankans of efficient high quality vehicles, he said.
The brand new agents are not being given a quota to import the most commonly used models of each brand. For instance agents are not being given a quota to import the highly efficient and popular Wagon-R Hybrid model, Toyota Axio Hybrid, Toyota Allion, Toyota Premio, Honda Fit Hybrid, Honda Vezel hybrid and Nissan leaf electric, he said.
This is the very fact that the local agents are finding hard to digest and in return they use tactics to make it less attainable to average Sri Lankans. While using marketing tactics with their strong financial stability to misguide customers they use the power of various pressure groups to castle the local authorities to alter the import tax structure to make their products marketable the president alleged For instance most of the vehicles local agents import are non-hybrids and fall in to the 1500 cc – 1600 cc category. These are highly inefficient and will one day become a burden to the local economy since we are a country struggling for foreign exchange and the fuel bill accounts to a large proportion of our foreign currency outflow, Peiris said.
Moreover, due to continuous changes that are being made on the tax structure, the used car importers are finding it difficult to maintain a steady flow of business. Despite alerting the authorities about this for unknown reasons the government had been making changes in duty structures and valuations regularly in the past two years which was detrimental to the motor industry in the country. “We expect at least now to have some solid system which will stay constant for at least a year from budget to budget,” the VIASL President insisted.
The challenge for this year’s office bearers of VIASL is to ensure that our fellow Sri Lankans receive a vehicle of highest quality equipped with state of the art safety standards at a reasonable price. This is not a dream but a reality if the used car importer is being provided a level playing field with the local agents of foreign origin, the president. MFJ
Ranjan Peiris appointed as VIASL President
Ranjan Peiris was elected as the President of The Vehicle Importers of Sri Lanka (VIASL) at the Annual General Meeting 2017 which was held at Jaic Hilton Colombo on July 28.
VIASL was inaugurated in the early 1980's and comprises of most of the pioneer and leading vehicle importers in Sri Lanka. Peiris had been serving this association at different positions during the past and he is the owner of Ranjan Motors Kohuwala.
0 comments: