Vehicle Import Restrictions to be Lifted!

[Izza]

Last minute election promises maybe? But this provides a concrete timeline: https://pmd.gov.lk/news/import/

In a nutshell, the timelines are:

• Stage 1: The importation of public passenger transport vehicles, special purpose vehicles, and other non-motorized goods will be allowed starting October 1, 2024.
• Stage 2: The temporary suspension on the importation of commercial or goods transportation vehicles will be lifted on December 1, 2024.
• Stage 3: The importation of personal usage motor vehicles (including cars, vans, sports utility vehicles, pickups, etc.) will be permitted starting February 1, 2025.

Not a lot of details provided about a quota etc. I hope they won't just allow to import without any control. 

Edited September 14 by Izza

[Nuwan2806]

This is a pre election bait.

[amsandun]

හාවොන්ට චන්ද කැරට් අලයක් (Election Carrot) 😄 

the story have been around for a while now. There maybe some imports (Public transport/ Goods transport etc) as said but don't be fooled that they will allow personal imports as in old times.

[iRage]

True...this could be pre-election bait. Yes the plan for opening up imports (cars and many other things) have been in discussion for a while (IMF and other international agencies do urge the normalization of the markets).

I sincerely hope there is some sort of quota system so that we don't end up in the same predicament. Just because we increase our FOREX reserves by not paying our debtors does not mean we actually have money to "spend".

Then..no one is actually talking about the taxation of the imports as well. Do we still hold on to the existing structure ?

Finally, this is a huge question. Can people actually afford to buy new cars?

Granted most of our people will take out huge leases/loans and go buy it anyway...but that doesn't mean they can actually afford it. 

[Izza]

I agree with most of the comments - however, this is different from the previous story that has been around in the sense that actual dates are proposed. But yeah, right now it does seem like this is a pre-election BS as usual, albeit a bit scary unless its properly planned. 

3 hours ago, iRage said:

Just because we increase our FOREX reserves by not paying our debtors does not mean we actually have money to "spend".

Yup, exactly. 

3 hours ago, iRage said:

Finally, this is a huge question. Can people actually afford to buy new cars?

True. I know for sure that I cannot/won't. Also right now, I don't think SL as a country can afford too (I mean private use vehicles) - as a car enthusiast I would love to see some of the newer cars in SL, but definitely not at the cost of losing whatever the little FC reserves we have managed to collect in the last couple of years. 

[Gummybr]

On 9/14/2024 at 1:59 PM, Nuwan2806 said:

This is a pre election bait.

+1 on that

On 9/16/2024 at 9:13 AM, iRage said:

True...this could be pre-election bait. Yes the plan for opening up imports (cars and many other things) have been in discussion for a while (IMF and other international agencies do urge the normalization of the markets).

I sincerely hope there is some sort of quota system so that we don't end up in the same predicament. Just because we increase our FOREX reserves by not paying our debtors does not mean we actually have money to "spend".

Then..no one is actually talking about the taxation of the imports as well. Do we still hold on to the existing structure ?

Agreed, there has to be a mechanism to stop people importing massive numbers of vehicles. Even the migrant worker permit a lot of vehicles (close to 1500-2000) were imported. Some are still at car sales. Our unscrupulous car dealers are licking their lips waiting for this to happen to make money as if what they made in the last one and a half years is not enough.

With such imports our SLRs to Dollar will hit 400-450 easily. And then you go back to the old queue era where you wont have money to get petrol or diesel like in 2022. Inflation will go over the roof.

I believe more than tax strict regulations are needed for the automobile industry where there are controls on importers and correct taxing of the seller should be made possible before you start importing. The guys who imported the EV's wouldnt have paid the VAT for sure and would have bypassed that.

On 9/16/2024 at 9:13 AM, iRage said:

Finally, this is a huge question. Can people actually afford to buy new cars?

Granted most of our people will take out huge leases/loans and go buy it anyway...but that doesn't mean they can actually afford it. 

As it stands it will be difficult for people to buy given the country situation, but we have seen vehicles change hands at over 100mil which was a magic figure prior to 2021. Only a handful of vehicles (Bentleys and Rolls Royce and a few Maybachs) came at that price point.

The small cars will also go up in price and they will still sell if the second and market falls for them, if not people wont pay 10mil to buy brand new.

I have two questions on this lifting of import restrictions.

1. what happens to the people who started the  assembly projects? Will they stop manufacturing and start importing again?

2. What about the permits given to the tourism industry? What happens to people who went through hell to get permits (1000) when they can just buy next year rather than using their own dollar earnings.

The assembly projects have been producing over 3000 vehicles per year, so do we need more? We have already sent $$ for these vehicles.

[iRage]

15 hours ago, Gummybr said:

As it stands it will be difficult for people to buy given the country situation, but we have seen vehicles change hands at over 100mil which was a magic figure prior to 2021. Only a handful of vehicles (Bentleys and Rolls Royce and a few Maybachs) came at that price point.

This is more beneficial to the ultra-rich and politicians than the average person in Sri Lanka. What we are going to see is the politicians bringing in their LC300s and RRs and stuff along with high-end cars. 

It would be ultra irresponsible of them to just open up imports without some sort of quotas that takes in to domestic assemblies as well. But then our royal families are never known to be the responsible kind.

15 hours ago, Gummybr said:

1. what happens to the people who started the  assembly projects? Will they stop manufacturing and start importing again?

2. What about the permits given to the tourism industry? What happens to people who went through hell to get permits (1000) when they can just buy next year rather than using their own dollar earnings.

Well you should not be surprised if they do not have answers to these questions as valid as they maybe.

One would think that the new taxation frameworks would place protectionist tax rates making fully assembled vehicle imports more expensive than the local assembled vehicles. But we hadn't done that in the past, so I doubt it. 

As for the permits issued to the tourism industry after all their work...well...perhaps tax credit might be appreciated. If not they can just continue to exist with a taste of getting used in their mouths.

[Gummybr]

15 minutes ago, iRage said:

Well you should not be surprised if they do not have answers to these questions as valid as they maybe.

 

I dont expect them to have answers for these questions simply because we have seen the cabinets (I dont point fingers to one cabinet but to all) working on their whims and giving no consideration to the issues their actions might cause, hence the reason we are all in this soup. Long term planning is not something we like to think about, only the "eda wela tours".

18 minutes ago, iRage said:

One would think that the new taxation frameworks would place protectionist tax rates making fully assembled vehicle imports more expensive than the local assembled vehicles. But we hadn't done that in the past, so I doubt it. 

As for the permits issued to the tourism industry after all their work...well...perhaps tax credit might be appreciated. If not they can just continue to exist with a taste of getting used in their mouths.

Problem with the so called assemblies are that they are not proper assemblies carried out by the manufacturer, its all local companies who have set up plants and bring down (ehem) vehicles and fit a few local stuff and parade as made in Sri Lanka. So they only get a 30% rebate on the full duty for the local value addition. Its time that the law makers push for proper manufacturers to come into the market injecting much needed foreign investment. I have seen so many missed opportunities because of greediness.

As for the tourism industry I feel very sorry for them, ultimately what have they got from the government? Fellows are crying without tourists after the visa fiasco.

Well that is it, no point ranting here as none of the donkeys will visit this forum.

I hope people will vote intelligently not just at the PE but at any forthcoming elections and send proper educated and far thinking practical people into the parliament.

[iRage]

True..no point ranting it here. I seriously doubt things will change for the better. In fact as recent history has taught us, we are likely to change for the worst.

2 hours ago, Gummybr said:

Problem with the so called assemblies are that they are not proper assemblies carried out by the manufacturer, its all local companies who have set up plants and bring down (ehem) vehicles and fit a few local stuff and parade as made in Sri Lanka. So they only get a 30% rebate on the full duty for the local value addition. Its time that the law makers push for proper manufacturers to come into the market injecting much needed foreign investment. I have seen so many missed opportunities because of greediness.

That is very true. Also, wasn't the government (all of them) harping about going green and pushing EVs (even their recent permits signal that). However, they start assembling cars that are counter opposite to that.

As I have said before....we should just simply give up on trying to build/assemble our own cars. We should be attracting investment on components. 
 

[Gummybr]

1 hour ago, iRage said:

That is very true. Also, wasn't the government (all of them) harping about going green and pushing EVs (even their recent permits signal that). However, they start assembling cars that are counter opposite to that.

 

It was mentioned in the budget speech of late Mangala Samaraweera that we will go full electric by 2025 and the govt sector would only purchase Hybrid and Electric in the future. The permit scheme was a short term get rich scheme for those who were involved.

Double standards I say, this is why a long term plan and strategy should be in place.

[iRage]

19 hours ago, Gummybr said:

The permit scheme was a short term get rich scheme for those who were involved.

Car imports over the recent past has shown how vast the gap between the privileged few and the average person.

[tiv]

Looking at the way car prices are shooting up these few days, the public has no faith in "opening imports story"

Kinda funny, is it out of panic or they expect the new regime to make things even more stringent?

[iRage]

45 minutes ago, tiv said:

is it out of panic or they expect the new regime to make things even more stringent?

With our countrymen you never know.

It could also be because they are trying to spike the priceup to make a quick buck before imports open up and prices come crashing down (the crashing down is going to be wishful thinking on their part).

[Noobdriver]

I guess we'll never see the days of buying a decent Toyota Sedan for 5M and newer decent sedans will always go for 12.5M+.

That being said, I want the new Corolla Sport, it's such a good leaking beast. That shit will probably cost as much as a house I'm assuming xD.

--

My idea of opening up imports would be to allow more budget-friendly cars like the family hatches and sedans falling under $15,000-$20,000 USD and for the love of God make 1.3L cars a little affordable. 1L cars are just undrivable even though I find 1.3L cars super lacking as well.

At the same time, have higher-end cars not available at all for imports so that people will hold on to their luxurious cars longer and we only import what he hopefully need.

Afterall, a Corolla is a need (I know there's cheaper cars, but come on, a little bit of comfort is all we ask for) and a BMW is want (I really want a BMW.......)

Edited September 30 by Noobdriver

[Gummybr]

1 hour ago, Noobdriver said:

My idea of opening up imports would be to allow more budget-friendly cars like the family hatches and sedans falling under $15,000-$20,000 USD and for the love of God make 1.3L cars a little affordable. 1L cars are just undrivable even though I find 1.3L cars super lacking as well.

At the same time, have higher-end cars not available at all for imports so that people will hold on to their luxurious cars longer and we only import what he hopefully need.

Afterall, a Corolla is a need (I know there's cheaper cars, but come on, a little bit of comfort is all we ask for) and a BMW is want (I really want a BMW.......)

Hope the policy makers understand your point of view on the forex matter.

Looks as if the government will look at efficient vehicle imports from the way things are going, so 1000cc or below maybe taken into account. Problem is how to curb excessive imports since most brand new agents will not get 1000cc and below vehicles nowadays due to restrictions in export, hope they come up with a plan.

[iRage]

2 hours ago, Noobdriver said:

, I want the new Corolla Sport, it's such a good leaking beast. That shit will probably cost as much as a house I'm assuming xD.

A few months ago there were two that came up for sale...they were 19mil and above..one was nearly 21.

So....we brought down our Corolla Touring. Customs took the Japanese market value for the CIF value which was 2.4mil yen...based on that valuation, customs calculated the total value of the vehilce including import duties to be 17.5mil (the car was brought in duty free for my wife whose job gives her a duty free allowance for one car import during her assignment in whatever country she is working in).

People say Premios, Corolla Sports, etc...go for such high prices because of the LKR devaluation and that the dollar amount will be lesser than what it was when new. In reality, not the case. People are still making a good amount of money with it.

[iRage]

2 hours ago, Noobdriver said:

My idea of opening up imports would be to allow more budget-friendly cars like the family hatches and sedans falling under $15,000-$20,000 USD and for the love of God make 1.3L cars a little affordable.

That reduces the possibilities immenseley. You are not going to find any Japanese market sedans or wagons that are 1.3L. So you are looking at foreing market Japanese vehicles like the Ativ, Mirage, etc...or JDM hatchbacks. Even the Axio hasn't had a 1.3L for quite sometime (the Axio still can be bought brand new but only in business grades)

2 hours ago, Noobdriver said:

Afterall, a Corolla is a need (I know there's cheaper cars, but come on, a little bit of comfort is all we ask for)

For the budget range you are talking about you are restricted to 1.2L Corollas (which stopped in 2022) or 1.5L petrol Corollas that are exaclty 3 years old. Right now the market price for one of those in Japan is about 17,000USD for a good one and whenyou add Freigh and Insurance you are cutting it really close to the cutoff. Nevertheless....prices are going to be quite high.

But yes..the Corolla Touring and Sport (they are not actually sporty at all but actually the body style is being called sport like with the Axela and other large hatchbacks) are quite common over here. Sadly not the sedan for obvious reasons. It is the defactor base small family car followed on by the Corolla Cross. They are dime a dozen over here but such a rarity in SL. Which is sad because just until about 15 years ago the Corolla was the base car for Sri Lankans. Now it is only a dream.

[amsandun]

Carefully looking at the current economic situation in SL, fully lifting the ban on vehicle imports would be a far fetched idea. No matter the economy, our people will bring down whatever car they can afford. There's some story spreading that up to 7 years old vehicles will be allowed to import but personally I don't believe it at the moment.

IDK what the new government's policy on this matter. But there maybe some kind of a life on importing vehicles where they may allow certain domain/category to be brought down like public transport etc. Personal vehicles just as old times? In near future? I'm not sure but there was the headline about EVs everywhere.

I see many EVs from brands like Mustang, Porsche, Peugeot etc. Where/what is the future for them in Sri Lanka? Could they all end up like Nissan Leafs?

[Gummybr]

44 minutes ago, amsandun said:

I see many EVs from brands like Mustang, Porsche, Peugeot etc. Where/what is the future for them in Sri Lanka? Could they all end up like Nissan Leafs?

Without proper infrastructure they will end up like the Leaf.

I wouldnt touch anything without an agent warranty specially with regard to the battery. Something goes wrong you are in trouble unless you have very deep pockets otherwise your car will become a very expensive display ornament. 

This simple thing people dont understand, I think we imported close to 2000 EV's in the last two years, and most have already changed hands a few times and some are now stuck with car sales.

[amsandun]

52 minutes ago, Gummybr said:

Without proper infrastructure they will end up like the Leaf.

My point too...

52 minutes ago, Gummybr said:

I think we imported close to 2000 EV's in the last two years, and most have already changed hands a few times and some are now stuck with car sales.

True this. If you drive through kohuwala road, many latest EVs are in show cases. Some MG's has come recently and now there's a big hype for BYD. There's a separate showroom too in ibbanwala junction. Going towards EV's are good but without the required facilities I'd be much worried to buy one.

[Gummybr]

39 minutes ago, amsandun said:

True this. If you drive through kohuwala road, many latest EVs are in show cases. Some MG's has come recently and now there's a big hype for BYD. There's a separate showroom too in ibbanwala junction. Going towards EV's are good but without the required facilities I'd be much worried to buy one.

BYD was never a new model to Sri Lanka, you would have seen the old Kangaroo cab BYD's on the road previously. Well the new agent seems to be confident that they can bring down vehicles in February and have taken over 500 orders so far. Its just that people didnt have access to new vehicles for such a long time and they are queueing to get whatever they can get regardless of other issues.

JKH says that they will put up charging points at all Keells outlets, but will it be enough is the question.

[amsandun]

58 minutes ago, Gummybr said:

JKH says that they will put up charging points at all Keells outlets, but will it be enough is the question.

Yes, it's somewhat known that most people who get an EV tends to get Solar in their homes too 🙃

[Gummybr]

14 hours ago, amsandun said:

Yes, it's somewhat known that most people who get an EV tends to get Solar in their homes too 🙃

Having Solar will not be the solution for EV's. Its the size of the battery and how long it takes to charge that is most important. Most roof top solar system will be giving around 4-5kWh, this is not sufficient for quickly charging an EV. I will open a new thread to talk about all these to give knowledge to the community here.

[Gummybr]

On the imports you have to read this article. - https://www.ft.lk/columns/Lifting-import-ban-on-automobiles-Sri-Lanka-sleepwalks-into-disaster/4-769115

[matroska]

49 minutes ago, Gummybr said:

On the imports you have to read this article. - https://www.ft.lk/columns/Lifting-import-ban-on-automobiles-Sri-Lanka-sleepwalks-into-disaster/4-769115

I read this yesterday. Eye-opening stat "Back then, they advocated for reducing our “unbearably large car fleet” which even now consumes 24% of total import expenses "

The IMF does want us to downsize our spending on vehicles. At the same time the IMF of course will not as a principle support import restrictions on any goods. I think Sri Lanka might want to explore other ways to control - including taxes, maybe a system like they have in Singapore etc. Of course the 'proper' way to reduce this is by having a better public transport infrastructure, which will take time to properly implement. As someone who personally tried my level best to utilize public transport for several years (I tried different options to commute to work including using the railway, which was extremely unreliable, park-and-ride : drop my car at the city entrance and then use those big red buses by micro) found out, the public transport here is terribly terribly crappy. After half-a-dozen years of trying I eventually gave up. 

Having said that, Sri Lankans as a people, have an American-like obsession with personal vehicles. So I doubt that even (hypothetically) better  public transport availability will discourage more vehicle imports.