Govt. suspends motor vehicles imports for 1 year

[iRage]

11 minutes ago, Kavvz said:

What's next?  A pay increase for our poor hardworking ministers, suggested and approved / ratified by themselves like last time? ?

I would say a hardship allowance...for the work they have to do above and beyond their call of duty during the pandemic.

[Skyonline]

Statement from Vehicle Importers Association highlighting 5 key issues

Import ban on motor vehicles

The government has imposed a complete ban on Motor Vehicles since March 2020 sighting foreign currency out-flows as the main reason. This measure has been strictly imposed and even those vehicles with already established letters of credit have not been permitted in to the country.

This has negatively impacted the Sri Lankan economy as well as vehicle importers and all related industries. These entrepreneurs have been in the motor vehicle industry for generations. Furthermore, those providing supporting services for motor vehicles have been adversely affected.

Erroneous information received by the Government regarding existing stocks

VIASL carried out a survey regarding the current stock situation. As per this report, there are less than 3,000 motor vehicles in the market and this is not even sufficient to cater to at least two and half months demand. Hence, lifting the import ban immediately is paramount for the survival of our trade.

Issues regarding purchasing a vehicle locally under the concessionary permit

Even though a circular has been issued detailing an arrangement for permit holders to purchase cars locally, no instructions have been issued to importers detailing how the permits can be redeemed. Furthermore, since most importers are without stock, the importers are facing the difficulty of catering to the preferred choice of permit holders.

Severe issues faced by vehicle importers and related parties

Vehicle importers provide various employment opportunities ranging from accountants, sales executives, marketing
executives, drivers, cleaners, security staff, etc. Furthermore, service areas such as clearing agents, interior cleaners, mechanics, car carrier operators and service centers are directly dependent on importation of motor vehicles. 

100,000 direct and indirect employees will have to be made redundant if the ban is to continue further. This would mean around 350,000-400,000 dependents of these employees would be facing severe financial difficulties  threatening survival.

Negative Impact on the Economy

For our economy to move forward transportation and mobility is essential. As per the people-centric economic development vision of our Hon. President Gotabaya Rajapaksa; Fisheries Sector, Milk Products, Tourism Industry, Construction Industry as well as Small & Medium scale Industries need to be boosted and developed. For this to materialize vehicles such as small and medium size vans, trucks, buses, smaller motor-cars etc need to be imported in to the local market at a very affordable price.

Issues with local assembling

An already completed product in China or India is dismantled and then carefully repacked in to several parts and imported as spare parts to Sri Lanka, evading the import tax applicable on a finished motor vehicle. Then the same vehicle is reassembled back in these so called workshops and sold to the general Sri Lankan public.

The local assembling companies mainly import an almost finished product and add minimal value to it. Hence the CIF (Cost, Freight & Insurance) value or the amount of foreign currency sent out of the country is perhaps more than the CIF value of a good quality Japanese vehicle.

So far, the intended objective of the government, in promoting vehicle assembling industry using locally manufactured parts had not been achieved and this process has not generated any export revenue.

Lifting the ban on motor vehicle importation

We urge to government lift the ban on motor vehicles at the earliest for the mobility of our economy and development of various industries. Furthermore, concessions need to be provided for categories such as small motor-cars, trucks, vans and buses. This will enable mobility and development of people-centric economic sectors while giving the motor vehicle importers to survive.

More Info - http://www.newswire.lk/2020/10/02/statement-from-vehicle-importers-association-highlighting-5-key-issues/

Edited October 2, 2020 by Skyonline

[VWvortex]

Are people actually still buying vehicles at these ridiculously inflated prices ??

[hrm]

On 10/9/2020 at 7:55 PM, VWvortex said:

Are people actually still buying vehicles at these ridiculously inflated prices ??

Apparently yes. One of friends bought a 2016 Premio for 8.2M despite being told how stupid that would be. However some of them have crossed 9M now.

[gayanath]

On 10/2/2020 at 4:03 PM, Skyonline said:

Severe issues faced by vehicle importers and related parties

Vehicle importers provide various employment opportunities ranging from accountants, sales executives, marketing executives, drivers, cleaners, security staff, etc. Furthermore, service areas such as clearing agents, interior cleaners, mechanics, car carrier operators and service centers are directly dependent on importation of motor vehicles. 

100,000 direct and indirect employees will have to be made redundant if the ban is to continue further. This would mean around 350,000-400,000 dependents of these employees would be facing severe financial difficulties  threatening survival.

Are those numbers true? 

400,000 means 2% of the population of SL. ?

 

On 10/2/2020 at 4:03 PM, Skyonline said:

Issues with local assembling

An already completed product in China or India is dismantled and then carefully repacked in to several parts and imported as spare parts to Sri Lanka, evading the import tax applicable on a finished motor vehicle. Then the same vehicle is reassembled back in these so called workshops and sold to the general Sri Lankan public.

Dismantled in china or India and Reassembling??

Who is doing this? Micro, Ideal? ?

 

[Kavvz]

6 hours ago, hrm said:

Apparently yes. One of friends bought a 2016 Premio for 8.2M despite being told how stupid that would be. However some of them have crossed 9M now.

Wow! Am curious: What was his justification? As your friend- He must be a smart chap, as he's buying a luxury vehicle and not a commercial vehicle, he obviously had the option not to purchase right now, so I would be quite interested as to the logic behind the purchase now vs 12 months from now? 

[hrm]

26 minutes ago, Kavvz said:

Wow! Am curious: What was his justification? As your friend- He must be a smart chap, as he's buying a luxury vehicle and not a commercial vehicle, he obviously had the option not to purchase right now, so I would be quite interested as to the logic behind the purchase now vs 12 months from now? 

He has sold his Axio and looking for a car for about a month. His justification was simply prices would not come down at least for a year or so and can't wait that much. Told him if he really want to spend 8M+ for a car let it be a SUV not another sedan which would be more or less same as his old car. Made an intervention through his reporting manager at office also but didn't work out  

[Kavvz]

41 minutes ago, hrm said:

He has sold his Axio and looking for a car for about a month. His justification was simply prices would not come down at least for a year or so and can't wait that much. Told him if he really want to spend 8M+ for a car let it be a SUV not another sedan which would be more or less same as his old car. Made an intervention through his reporting manager at office also but didn't work out  

Ah! But see, in his case as he already sold a vehicle at the current prices he is probably only paying slight premium for the Premio. Would be better if he could have sold now at the current inflated prices and waited 12 months to buy as you suggested in order to take advantage of the market but that's in an ideal world....We are all so attached to our cars, sometimes we can't see beyond the fact that cars aren't really a necessity. 

Edited October 13, 2020 by Kavvz

[kush]

Everybody keeps predicting the vehicle prices to come down. It might not materialize after all as the previous idiotic tax structure favored high value cars due to taxing based on CC

This is how we ended up will many Audis/ BMWs/ Mercs not to mention the exotics.

In 2007 Price of a Allion was Rs. 7.2 Mn. prior to issuing permits and messing up the market.

Most likely there will be a new duty structure when the restriction is taken out may be with the new budget.

 

[Gummybr]

2 hours ago, kush said:

Everybody keeps predicting the vehicle prices to come down. It might not materialize after all as the previous idiotic tax structure favored high value cars due to taxing based on CC

This is how we ended up will many Audis/ BMWs/ Mercs not to mention the exotics.

In 2007 Price of a Allion was Rs. 7.2 Mn. prior to issuing permits and messing up the market.

Most likely there will be a new duty structure when the restriction is taken out may be with the new budget.

 

I highly doubt it, the way things are going government might extend the restrictions further, if at all they will increase the taxes to a point that only who want will bring down a vehicle.

 

The reason for the change to CC was due to the fact that many found loop holes in the system to undervalue and bring down the vehicles at cheaper prices whilst the black money launderers were having a field day sending money out of the country. (in your view which is good, sending money the legal way or by illegal means thereby bringing down the economy further?)

In 2004 when I started life as a car sales person a Suzuki Liana was 1.9mil, Grand Vitara was 3.2mil a Freelander was around 7.0mil and a Disocvery 2 was 9.5mil. Gradually the duty went up and by 2007-10 duties were at a high. A C Class was selling for 24mil, a Range Rover was around 40+Mil, a S Class was 60mil, it all changed in 2010 mid when the duty was reduced (to half in some cases E Class from 30mil came down to 16mil, S from 60mil to 30mil) and then the sudden boom happened, again gradually the duty was increased trying to limit imports but it didnt change much until the luxury tax on vehicles was imposed by the previous government on top of the duty. 90% of vehicles in the market have come in without paying the luxury tax. 

[priyanka]

I have noticed a flattening of the price increment.... may be due to the current covid wave or due to some other reason... I was looking for a vitz for one my relative.... most cars are unsold 

[iRage]

10 minutes ago, priyanka said:

I have noticed a flattening of the price increment.... may be due to the current covid wave or due to some other reason... I was looking for a vitz for one my relative.... most cars are unsold 

Simple market dynamics at work....excessive demand that exceeds supply would push up prices. When demand dies down the excess of supply would push the prices down. 

 

[GayanR]

vitz at 4m was felt overpriced too.I wonder who buy at 6m now a days.

[Skyonline]

Vehicle Importers Association of Sri Lanka (VIASL) urged the government to reconsider the import ban.

They said severe issues had been faced by the vehicle importers and all related industries due to the ban on vehicle imports. It creates a negative impact on the Sri Lankan economy, they said.

“Vehicle importers provide various employment opportunities ranging from accountants, sales executives, marketing executives, drivers, cleaners, security staff, etc. Furthermore, services areas such as clearing agents, interior cleaners, mechanics, car carrier operators and service centres are directly dependent on the importation of motor vehicles,” the Association said.

“The vehicle importers, as well as related service providers, are at stake in maintaining their business premises, paying off bank loans, rent and paying the salaries of their employees. Since the industry was only at the recovery stage after the Easter attack, most vehicle importers carried out importation with minimum stock, as the holding cost of our industry is substantial,” it said.

Hence currently there are a large number of showrooms and importers in the country who are without a single vehicle in their showrooms and are struggling to survive and to pay their employees, the Association added.

“If the ban is to continue further, they will be forced to close down their business and make all their employees redundant. As per the calculation carried out by VIASL, around 100,000 direct and indirect employees will have to be made redundant if the ban is to continue further, the Association said.

This would mean around 350,000-400,000 dependents of these employees would be facing severe financial difficulties threatening survival, they added.

http://www.dailymirror.lk/breaking_news/Reconsider-the-ban-on-vehicle-imports-VIASL-urges-Govt/108-200337

[Gummybr]

2 hours ago, Skyonline said:

“If the ban is to continue further, they will be forced to close down their business and make all their employees redundant. As per the calculation carried out by VIASL, around 100,000 direct and indirect employees will have to be made redundant if the ban is to continue further, the Association said.

This would mean around 350,000-400,000 dependents of these employees would be facing severe financial difficulties threatening survival, they added.

http://www.dailymirror.lk/breaking_news/Reconsider-the-ban-on-vehicle-imports-VIASL-urges-Govt/108-200337

Dont think they will close shop that easily, and on the high prices a very good customer of mine said that the car dealers quote these high prices and dont come down on price when you and me goes, but if its a known party they just sell it at original cost, however if an idiot comes and pays the ridiculous price they will sell it off and make a quick buck.

Every industry is evolving according to the times, the most important thing is not to pressure the government to open up, but make sure that regulations are bought in properly so that you have a future for the industry. What kills an industry is adhoc policies like what we have gone through. Like in other countries if we have a policy that doesnt change it would be the most ideal. 

Admins maybe you can merge this with the previous thread on the automobile imports ban.

[ajm]

Good lesson for the Mafia that ripped off customers for decades. Hope they all go bankrupt.

[Skyonline]

1 hour ago, ajm said:

Good lesson for the Mafia that ripped off customers for decades. Hope they all go bankrupt.

If someone comes tomorrow and cuts the need for your job to exist and says for years we are going to make your job usless so you can't make money out of it but it will save the economy. Hope you will have the same mentality then...

[gayanath]

18 minutes ago, Skyonline said:

If someone comes tomorrow and cuts the need for your job to exist and says for years we are going to make your job usless so you can't make money out of it but it will save the economy. 

This is happening to everyone some day (consciously or unconsciously). The only difference is that no one comes and tells you in advance.

The economy of the country is for everyone and not just for the survival of the car dealers.

[priyanka]

I don't think the government can do that even if they wish... due to present economic crisis 

 

And mind you... 225 highly influential fellows plus a large number of government officers are waiting to utilise their permit... but keep thief mouth shut.. because they know the situation 

[ajm]

5 hours ago, Skyonline said:

If someone comes tomorrow and cuts the need for your job to exist and says for years we are going to make your job usless so you can't make money out of it but it will save the economy. Hope you will have the same mentality then..

Skills? What skills to these car sales con artists have apart from ripping off poor customers with lies and tricks? Those who have real skills like the mechanics and service staff will always have plenty of work as long as people keep driving 😃

[iRage]

6 hours ago, ajm said:

Skills? What skills to these car sales con artists have apart from ripping off poor customers with lies and tricks? Those who have real skills like the mechanics and service staff will always have plenty of work as long as people keep driving 😃

Well....yes..you are right...but then so is @Skyonline.....if one was to have skills and they invested their time and energy building that skill..then osing that and not having a skill that supported their lives is a huge issue. Countries like Malaysia, Singapore, US,UK and Japan; even Vietnam, had (and are having) the same issue with the likes of Uber/Grab coming up. Cabbies had to invest such a lot in training themselves and then getting regulation specific taxi cars and then over a matter of days a smuck with any running car can start taking their hires...so..yes....Skilled peole will have issues with this.

However, where the car sales men are concerned....the issue is, like @ajm says, they built their livelihood on not a proper skill but more on lies and cons. You can be a car salesmen with skill...but these guys are not...they know nothing of the product...they have no idea of the pros and cons of the car..nor the technology. It is all myths and lies...I beleive the skilled marketers are finding ways to actually re-invent themselves (which to be honest is something we are all doing and should with the change of times).

I am not sure I mentioned it here or somewhere else, but the issue that most of these car sales are facing is that a lot of them have dead stock stuck in Japan (and perhaps other countries too). Some of them are slowly unloading it to other markets but it is quite difficult (Africans have a strong hold on car exports to those regions, UK/Aus are quite strict and the cars our guys have in stock do not appeal to them...then car sales are pretty much down, etc..). So...yeah....on one hand I suppose most of this stock is stuck on borrowed money, which keeps accumulating interest; and foreign exchange against a Rupee that has slid downward. Not that I care about 90% of these guys...but what they have done and the predicament they are in effects the economy of the country.

[AVANTE]

On 9/23/2020 at 9:58 PM, kush said:

 

I hardly see buses on the Bus lane. Put good buses that you  can sit and travel in comfort that goes on schedule  I would be the first to keep the car at home.

Couldn't agree more. 

[Kavvz]

 

Quote

....this stock is stuck on borrowed money, which keeps accumulating interest; and foreign exchange against a Rupee that has slid downward. 

Interesting point.

(I never considered that angle. I was wondering why the car sale buggers were making all this fuss; as local inventory prices have appreciated, and anyone selling a car now would make good profits. But to your point: Right! Any inventory purchased in Japan etc that is waiting to be shipped is a huge liability. Especially if they bought their usual, slighty body damaged stock to be touched up in SL, that can't be resold easily back into that market...)

Edited November 22, 2020 by Kavvz

[ajm]

11 hours ago, Kavvz said:

 

Interesting point.

(I never considered that angle. I was wondering why the car sale buggers were making all this fuss; as local inventory prices have appreciated, and anyone selling a car now would make good profits. But to your point: Right! Any inventory purchased in Japan etc that is waiting to be shipped is a huge liability. Especially if they bought their usual, slighty body damaged stock to be touched up in SL, that can't be resold easily back into that market...)

Well they decided to build their livelihoods on a toxic industry based on lies and broken promises, instead of bothering to learn a real profession or skill.  How many people who believed their lies and bought  vehicles lost millions due to vehicles being not suitable for SL? So called seller warranties are useless against manufacturing weaknesses, and most of the time even a seller warranty is not given leaving the buyer all by himself. Now they can't blame others when karma hits them back 😂

Edited November 22, 2020 by ajm

[Kavvz]

1 hour ago, ajm said:

Well they decided to build their livelihoods on a toxic industry based on lies and broken promises, instead of bothering to learn a real profession or skill.  How many people who believed their lies and bought  vehicles lost millions due to vehicles being not suitable for SL? So called seller warranties are useless against manufacturing weaknesses, and most of the time even a seller warranty is not given leaving the buyer all by himself. Now they can't blame others when karma hits them back 😂

True, but there are some good sellers / sales guys around and it sucks for them to be branded as not 'bothering to learn a real profession or skill'. 

(I do agree though about the  'seller warranties' though. Most of them aren't worth the paper they are written on, and its disgusting how sales guys and car-sale owners pray on the customer by selling them a false sense of security, when they well know that the warranty is completely useless and the chances the customer will be able to use it as intended are almost zero.)

Edited November 22, 2020 by Kavvz