Vehicle market

[Nipun Edirisinghe]

What will happen to the second hand vehicle market once the import ban is lifted?

[Gummybr]

I am no astrologer but I can say that price would remain more or less the same, reason being that if you are to import a vehicle your exchange rate will be higher and also the new vehicles will come with the luxury tax so the new pricing would be around the same meaning that there wont be much of a change in terms of pricing, but the supply demand theory will come into effect. 

Other factor that will change all this would be how the car sales guys adjust, and price the vehicles. Will be interesting.

[caesarprime]

I had the same doubt and as far as I can predict, the government would have to increase the taxes to balance the course. Even that won't be successful as the affordability would decrease by a huge margin (Even taking into the fact that the dollar too would get increased). So this would happen by around 1 year of time since the tourism industry recovers (Just my opinion) and won't be that much of a tax increment. The only concern is about when this would happen and I expect it to be in around 2-3 years of time.

But even in that case there is a strong possibility that the current vehicle prices would get reduced by around 1-3% of price. This is because of the fact that though the taxes are imposed the market vehicle cap would too get increased, which would allow the existing owners to migrate to a newer car.

[iRage]

and history shows that @Gummybr and @ceasarprime are right. In the past vehicle prices have had sudden spikes due to taxes, currency issues, import regulation changes, national policy changes, etc...but even after these policies are riverted back or contributing factors stabilise, the prices have not come back down (at least not by that much). Even when the opposite happens (i.e. a sudden dip) like when Hybrid and EVs were given high preferential tac treatment, the market sprung up the prices of gasoline/normal vehicles even before the policies caught up and were changed.

So do not expect the prices to drop down to pre-C19 era prices. Even if the Ruppee appreciates and Lanka land magically goes to everything being rosy and economically booming and becomes a super power...prices will not go down (at least not in our prime).