Vehicle Import Restrictions to be Lifted!

[amsandun]

6 hours ago, matroska said:

So they want to pre-register without paying an advance - are they just checking the enthusiasm levels? What I can see if this goes ahead is the car-starved public will spend lavishly and we'll have another collapse? I'm not being philosophical because I already have a ride (my daily is 6 years old, it's not getting younger yes I'd like to upgrade)  - but the fact is, Sri Lanka didn't magically become an economic powerhouse did we? 

Having said that, even if this speculation drives the prices of used, abused, worn torn second hand cr@p that's still a welcome thing. I see absolute piles of garbage for sale demanding millions - it's just pathetic. 

I don't know about the prices in Japan but these prices before taxes are also feels ridiculous to me. A wigo for 6.9 Mil? Since we're comparing with before crisis (5 years apart), these prices maybe correct. My Vitz cost 3.7 mi with taxes back in 2018.

Ok the prices aside, what about the taxes? They only talk about 18% VAT. And if someone thinks that's it, they're gonna be surprised. Excise duty which was based on engine capacity (which also caused more under powered <1000cc cars to flood here), PAL, NBT, Luxury Tax will be included in my opinion unless there's a complete overhaul in tax structure. 

[Gummybr]

9 hours ago, amsandun said:

I don't know about the prices in Japan but these prices before taxes are also feels ridiculous to me. A wigo for 6.9 Mil? Since we're comparing with before crisis (5 years apart), these prices maybe correct. My Vitz cost 3.7 mi with taxes back in 2018.

Ok the prices aside, what about the taxes? They only talk about 18% VAT. And if someone thinks that's it, they're gonna be surprised. Excise duty which was based on engine capacity (which also caused more under powered <1000cc cars to flood here), PAL, NBT, Luxury Tax will be included in my opinion unless there's a complete overhaul in tax structure. 

The given prices does include the Excise duty, Luxury Tax and VAT paid at customs. The reason I believe they say +VAT is because of the uncertainty on how to charge the VAT on the sale as VAT has already been paid at customs and becomes taxed twice. In the era before the excise duty import VAT was less than the sales VAT and as such companies had to pay only the balance VAT to inland revenue department end of the month as they had already paid VAT at customs at a lower rate, so for anyone claiming VAT they got only the balance amount back not the full VAT. It all changed with the excise duty as VAT was deemed to be part of the excise duty when implemented.

[Ruslan]

My Thinkin is Gov should only allow Brand-new import through Agents and curtail importing Grey imports.. i know as Enthusiasts will go up in arms against it. but to curtail importing Garbage and exhausting reserves i don't see any other option. for the record I'm driving a 18 Year old barge. but I'm satisfied with it at least for now 😁

[Gummybr]

On 12/3/2024 at 9:09 AM, Ruslan said:

My Thinkin is Gov should only allow Brand-new import through Agents and curtail importing Grey imports.. i know as Enthusiasts will go up in arms against it. but to curtail importing Garbage and exhausting reserves i don't see any other option. for the record I'm driving a 18 Year old barge. but I'm satisfied with it at least for now 😁

The VIASL will be up in arms, they already said that there are over 600 importers in the country. The biggest problem they have is as to how they can get the bigger piece of the cake.

Let's see what happens, there is nothing concrete in saying the government has / will lift the import ban yet.

[iRage]

On 12/3/2024 at 12:39 PM, Ruslan said:

My Thinkin is Gov should only allow Brand-new import through Agents and curtail importing Grey imports.. i know as Enthusiasts will go up in arms against it. but to curtail importing Garbage and exhausting reserves i don't see any other option. for the record I'm driving a 18 Year old barge. but I'm satisfied with it at least for now 😁

Actually, I am for this. The whole 0 mileage gold badge imports are ridiculous. If the market actually wants JDM models then there are mechanisms for the agent to bring them down. Can't see why the agent can't offer franchises to 3rd parties later on as well. Even if we do allow complete independents then it has to be for proper registered dealers.

Same goes with parts. In every other country I have been to the sole importer of genuine parts is the actual agent. Local resellers simply order the parts from the agent. This helps the agent keep the parts down too because now they actually have enough volume. So that leaves only 3rd party parts that come in outside of the dealer network and presumably that comes through a local appointed formal distributor (i.e. someone who has an agency ship).

 

On 12/4/2024 at 4:00 PM, Gummybr said:

The VIASL will be up in arms, they already said that there are over 600 importers in the country. The biggest problem they have is as to how they can get the bigger piece of the cake.

Isn't it time that the country stops getting held hostage by and ultimately run by all these various groups? 
600 car importers? The bitter truth is most of them may have to close down or change their focus. The number of cars the government would allow to be imported may not be sufficient to be spread across 600 importers. They can't sell a dozen or two cars and sell it with a REASONABLE profit margin and still make it worth their while. So they are just going gorge up the price anyway....

Edited December 6 by iRage

[matroska]

On 12/2/2024 at 7:45 PM, matroska said:

Pretty soon the grey market crowd will start propagating the old myths - that the brand new versions are inferior than the used domestic versions. 

 

One thing the Govt can do but will be unpopular with the masses is to open up imports on the condition that the vehicles have to be brand new and only the authorized agents are allowed to import them. VIASL will be up in arms and start a second 'aragalaya' but if we open up for imports like this - 2022 will be back sooner than it left.  

 

On 12/3/2024 at 9:09 AM, Ruslan said:

My Thinkin is Gov should only allow Brand-new import through Agents and curtail importing Grey imports.. i know as Enthusiasts will go up in arms against it. but to curtail importing Garbage and exhausting reserves i don't see any other option. for the record I'm driving a 18 Year old barge. but I'm satisfied with it at least for now 😁

This echoes my thoughts - there's simply no other way. Remember, we have NOT recovered from the economic collapse. 

6 hours ago, Gummybr said:

The VIASL will be up in arms, they already said that there are over 600 importers in the country. The biggest problem they have is as to how they can get the bigger piece of the cake.

Let's see what happens, there is nothing concrete in saying the government has / will lift the import ban yet.

The VIASL, much like most organizations in this country are a mafia. As Gummy mentioned earlier, unless the agents disclose these prices they will be quoting much higher prices. 

At the same time, I have noticed that Buy-and-sell folks (The Buyya Brigade)  are already agitated by this. 

[kush]

I have a different view on this. From what I hear from the propaganda in the social media by the vehicle importers is they want to import used vehicles up to 7 years. Rational being that they will be still newer than what is available in the used market.

In the current system duty is based on the engine capacity. There is no luxury tax on CIF less than Rs. 3.5 Mn.

In the case of the government tax on a new Wagon R or a 7 year Wagon R will be the same. But CIF on a 2018 would be around Rs. 1.5 Mn. where as a a new would be nearly Rs. 3.0 Mn.

So landed cost will be around Rs. 4.5 Mn for the 2018 and Rs. 6.0 Mn. for the new. Knowing our market most of the people will opt for the clocked R grade instead of the new as it is lot less tan the current market price of a 2018 ignoring he fact that they can get a 2024/5 for Rs. 6.0 which is still cheaper than the current market price.

In this equation the vehicle importer and the government both wins as for  given amount of foreign exchange you can import more vehicles there by more profit for the importer and more tax for the government.

Besides this will enable the importation of Axio and the Allion/Premio that went out of production few years back.

And also the Corolla Sport and the CHR with 1.2L

 

[Gummybr]

2 hours ago, kush said:

I have a different view on this. From what I hear from the propaganda in the social media by the vehicle importers is they want to import used vehicles up to 7 years. Rational being that they will be still newer than what is available in the used market.

 

This is a wrong assumption, last we imported cars in 2020 March. So brand new and so called "new" were 2019/20 vehicles and used / recondition were 2018/19. So the 7 year story is not true.  

2 hours ago, kush said:

In the current system duty is based on the engine capacity. There is no luxury tax on CIF less than Rs. 3.5 Mn.

In the case of the government tax on a new Wagon R or a 7 year Wagon R will be the same. But CIF on a 2018 would be around Rs. 1.5 Mn. where as a a new would be nearly Rs. 3.0 Mn.

So landed cost will be around Rs. 4.5 Mn for the 2018 and Rs. 6.0 Mn. for the new. Knowing our market most of the people will opt for the clocked R grade instead of the new as it is lot less tan the current market price of a 2018 ignoring he fact that they can get a 2024/5 for Rs. 6.0 which is still cheaper than the current market price.

 

 

Correct on tax.

Look at it from this point of view. What is the main reason to open up for imports? Is it for the love of the people? The reason is one of the conditions of IMF is to increase revenue, so by bringing in very old vehicles will it let the govt hit the revenue targets? Highly unlikely.

Do you think the unscrupulous car sales people will sell 7 years old vehicles for less than what the market is selling, specially when they will be unregistered? Do we need more old cars coming in or newer models coming in? As a petrol head you might say yes we need a new car with newer technology. Or as the general public say we want cars cheaper than a used one and say F U to the car sales people. 

Lets face it if someone wants a new vehicle there is no option but to get from an agent or a 2 year old vehicle as per current regulations.

Solution is for people to understand the hard reality that the Maruti wont come at 2mil and an Aqua for 4mil as per previous duty and exchange rates. I know not everyone will be able to afford a new vehicle in this scenario but there will be people to purchase brand new. I am talking about the ones who are paying 7-8m for a 2016/17 Vitz can buy a new Wigo or a Celerio, anyone paying 18m for a used Premio can still pay 20m for a new car. Anyone paying 60m for a 2018 Prado will buy the new one for 61m. Certain vehicles are still moving in the market, its just that sadly some people have been waiting to purchase a new vehicle at old prices will complain.

 

IMO its time Sri Lanka reset their car market and bought in regulations that is beneficial to the end users and ensure fair competition, whilst you pay the government the correct duties at customs and relevant IRD taxes. Also there should be regulations to make sure that used vehicle market also stick to one policy and sold at fair prices. It is time that consumers are protected by law from all these unscrupulous vehicle dealers.

[kush]

Not to argue on your point or I'm not a proponent of the car mafia. Personally I have always bought brand new from agent exception being the Corolla Sport (1 year used ) and a FIT GP5 (zero mileage) both of which was not offered by the agent.

If 7 years is allowed it will be 2018 upwards.

Government has a Rs. 800 Bn. revenue target. In order to achieve this  they need to bring down 150-200k vehicles if they are looking at small vehicles. That would cost approximately 3-4 Bn. USD which the country cant afford.

So the suggestion of the vehicle importers is to increase the age threshold which will bring down the exchange out flow whilst retaining the revenue target.

Personally I would bring get a brand new or stick with what i have until things settle may be a year or two.

In any case there may be restrictions in the numbers allowed. How this is going to be achieved is still unknown.

[Gummybr]

50 minutes ago, kush said:

 

Government has a Rs. 800 Bn. revenue target. In order to achieve this  they need to bring down 150-200k vehicles if they are looking at small vehicles. That would cost approximately 3-4 Bn. USD which the country cant afford.

So the suggestion of the vehicle importers is to increase the age threshold which will bring down the exchange out flow whilst retaining the revenue target.

Yes it is indeed very difficult to hit the revenue target. 

Three things affect the revenue here 1. the excise duty (charged in engine capacity / motor power on EV) 2. Luxury tax 3. VAT paid at customs

Barring the first tax the other two are calculated on the value of the vehicle CIF.

VAT could be a significant tax in most cases.

So in bringing a 7 year used car you lose out on the luxury tax as well as earnings on the VAT.

Again I will ask do we need a 7 year old vehicle when there are vehicles less than 4-5 years old in Sri Lanka?

It will have to a balancing act by the government to make sure that they don't exhaust the foreign reserves whilst increasing revenue. After all this is what the IMF said, open imports but keep an eye on your reserves.

I don't fault you for anything and I respect your opinion, it's a dilemma that the government is facing, but what I feel is the used car dealers will get their way we will probably end up in the same hole unless govt sits down and do the calculations and work out a long term plan. That is why I said the below in my previous post.

22 hours ago, Gummybr said:

 

IMO its time Sri Lanka reset their car market and bought in regulations that is beneficial to the end users and ensure fair competition, whilst you pay the government the correct duties at customs and relevant IRD taxes. Also there should be regulations to make sure that used vehicle market also stick to one policy and sold at fair prices. It is time that consumers are protected by law from all these unscrupulous vehicle dealers.

To be honest this month will be the last month that I stay in the Automobile industry, and here on I don't care what happens whether you open imports or not. But I do care for Sri Lanka and I don't want Sri Lanka to be where we were in 2022.

[iRage]

On 12/5/2024 at 10:18 AM, kush said:

they want to import used vehicles up to 7 years

Here is the issue...the 3 year limit was imposed because these very same groups started bringing in junk. Countries from Kenya to Tanzania all the way to SL had this issue and SL was the first to enact this as an anti-dumping policy.

You would think that with a 5 or even 7-year age limit, they would bring the actual high auction-grade cars as is. But no. They brought in the cheap junk. On the plus side these cars were just mechanically junk and not welded up death traps. Extending the age restriction would bring benefits you have stated if and only if we have strict import and registration inspections. Which we don't and have not been able to establish for 4 decades. 

I strongly believe that these guys are pushing for older cars just so that they can keep a higher margin for themselves. They are not going to buy the 1.6mil Allion/Premio. They are going to buy the 700k ones from the damage/parts car corner and sell it for the same price as the 1.6mil. <Sorry...after being here I have lost all respect for Sri Lankan car exporters>. True....forex leaving the country will be less as the exporters pay peanuts for these cars...but they are not saying anything about the masses paying actual lower purchase prices. All the manufacturers have Used Car dealerships. 

Also..hate to break it to you but you don't get that many 5- to 7-year-old Premios and Allions anymore in Japan, and the numbers are dwindling by the month. Almost all of them are gone/going to countries in Africa, Bangaladesh, etc.. Right now there are 37 Premios for sale in the whole of Japan within this age range. Also, it is about 1.6mil on average at auction (there are a few hundred newer vehicles..mostly rentals or fleet cars, it seems, and those are a bit more expensive). In contrast, a 3-5-year-old Corolla sedan 1.8 Hybrid or a slightly newer 1.2L petrol WxB and the 1.2L hatchback are the same price. So, you really are not saving that much money by going for an older Premio/Allion in good condition. You might as well buy the newer Corolla. There are models where the price between a 3-5 year old car is quite high compared to a 7 year old car...those are either large cars like the RAV4 (attracting higher import taxes) or cars like Vitzes. So we are looking again at the usual cars we have...Vitzes, Axios, etc... Which is exactly what I believe these guys are targeting anyway (you can literally buy a 7-year-old Vitz/Aqua for about 300,000 yen). Now..considering that it was these same guys who bought these cars during the early days of the ban and jacked up the prices...do you really think they are going to drastically reduce the prices (also....they are probably out of stock of used cars as well)?

On the plus side, you do still get the Axio and Fielder used or brand new. Toyota has been trying to kill the model, but it keeps on selling like crazy both domestically (because that is the only remaining narrow-body sedan/wagon) and for export (the waiting list for a brand new Axio/Fielder is 6 to 8 months).  

The bitter truth that is hard to swallow is that cars like the Civic and Corolla have moved on and are no longer the reasonably priced entry-level cars they used to be. The segment is now taken over by cars like the Yaris,Fit, etc...

[Gummybr]

Very well explained @iRage, you simply said what I wanted to say previously.

[kush]

My sentiments too

But given the gullible nature of our car buyers and vehicle importers I would not be surprised if this scheme does not come in to fruit.

If you see the number of lobbing social media posts this is exactly what they are lobbing for.

In my view this whole duty structure need to be revamped in order to get a decent car for the lower middle and middle class.

Other fact of the matter is most of the vehicles in the past came under different concessionary schemes and at a significantly less tariffs.

If you are smart you really can get a good vehicle at less tax hence there were whole heap of 1.0 Audis, 1.2L Pugs and 1.5 L CRVs and C200s and of cause the Vitz, Allions, Axios.

I was going through the web for JDMs and unfortunately majority does not come within this sweet tax brackets anymore.

As they are not going to have any concessionary schemes we may all end up with Chinese and Indian crap.

I was at the Colombo Motor Show and majority of the vehicles they show cased had very poor material quality and did not give much confidence that they will last. Apart from the couple of Korean built.

Personally at those prices you will be better off keeping your current wheels.

 

 

[iRage]

On 12/7/2024 at 11:17 AM, kush said:

I was at the Colombo Motor Show and majority of the vehicles they show cased had very poor material quality and did not give much confidence that they will last. Apart from the couple of Korean built.

I was there today (Sunday)....yes...kids asked me if it was a Chinese Car Convention. Then wifey asked if Japanese cars were banned. It was a bitter day realising that the cars that can be even remotely considered to be good were the Mahindras, the few Hyundais and the couple of classic Mercs.

Yes...the country needs a complete revamp of the tax structure. But at the heart of it is not the tax structure. It is the wealth of our masses. Sri Lankans simply do not have the financial means to buy a decent car...period. Even if it was zero tax...how many Lankans can afford to buy a 3 year old or less Corolla without sacrificing a large part of their income ? Most of us do not have and residual/excess/disposable funds/savings to put into an average car. Anything you do with taxes is simply going to be a band-aid solution. 

[Noobdriver]

What's everyone's thoughts about the recent announcement of confirmed imports and the different companies releasing pricing on any fairly OK vehicle over 15-20 mil.

[iRage]

18 hours ago, Noobdriver said:

What's everyone's thoughts about the recent announcement of confirmed imports and the different companies releasing pricing on any fairly OK vehicle over 15-20 mil.

I think people are blinded with excitement and still haven't been hit with the financial implications.  Many seem to believe that once new cars start coming in the prices of used cars will significantly plummet (almost to pre-covid prices) and everything will be honky dory again. I believe the hyped inflation part will drop but the price increase affected by demand-supply dynamics will still keep the prices relatively high. I think it is obvious that the biggest changes in prices will be amongst the entry level cars (kei cars, entry level Vitz, Raize, all those mini Suzuki and Honda MPVs, etc...) Cars like the Axio and Aqua will be interesting to watch because on one hand the Aqua has become a bit more premium than the previous model (because the Aqua and the Yaris share the same platform). The Axio is still sold in Japan brand new but only as a business model. So the nicer WxB variant is simply not there. 

Still I beleive for normal cars (full-size Corollas, Priuses, new Vezel, Corolla Cross and even maybe the Yaris Cross) it will still be a lot of money. So I doubt cars like the Allion/Premio will go down by that much. Look at the numbers...

A 1.6L Corolla Sedan is 270mil and Prius is 371 as quoted by the agents. The equivalent to a Premio/Allion now in the Japanese market is Corolla (not the Axio) sedan. Our Corolla Touring, based on the customs estimates would have been 20.2mil LKR and that is without any importer profit margins. So a Corolla Sedan, Sports and Cross are going to be around that price mark. It can change by a few 100Ks depending on the age and condition. Now, the Corolla Touring and Sedan do have 1.5L gasoline variants, which would make it about 15-18mil (?), but they do feel very budget.  I don't believe the Allion/Premio crowd will like the new Corolla, especially the gasoline one. The ride is firmer and sportier and doesn't have that beige cloudy feel inside (the gasoline variant has torsion beam rear suspension, unlike the Hybrid with IRS, which makes it quite buoyant) .  @Noobdriver..sadly, from October 2022, Toyota Japan only offered the Corolla Sport in 1.8L Hybrid or 2.0L gasoline variants. So it is going to be pricey.

Cars like the Prado/LC 250 are going to be interesting as well. The LC 250 cannot be ordered at Toyota dealerships (waiting list is about 4 years and right now only sold through lottery..so you may get it within 3 to 4 years or have to wait for after that). Only option is to buy it through a 3rd party dealer and those come at nearly 50% markups. As a result even the 150 Prados are still as expensive as they were when they were new (FOB price of a LC250 at Toy#ta L#nka is actually cheaper than what you can get at a 3rd party car seller in Japan). So again...150 Prados and LC200s may not significantly drop in price due to supply issues. (also...the fanboys will get all excited with the LC250..but the true enthusiasts and those actually using it will realize the LC250 is not that great when it comes to the engine)

We don't know how many cars will still be imported into the country (especially considering the cost people may not have money...or the government might curb the number of imports to slow down FOREX drainage). Secondly, if the number of cars being imported are lesser and considering the penalties the importers can potentially face, they are very likely to go for larger profit margins.

Pre-covid prices are gone. Also, apart from the GOSL stating that lifting of restrictions is in line with IMF requirements and that the government needs the tax revenue, we still have not heard anything about how the government plans to manage and balance all this (apart from statements saying the rupee will not devalue and forex will be balanced). So once the flood gates are open there might be ducts built up to restrict outflow. No idea if it is true, but foreign media are reporting that forieng investers are pulling back some of their investment because there is uncertainty of what will happen to the ruppee once restrictions are lifted.

Edited December 20 by iRage

[Noobdriver]

On 12/20/2024 at 3:39 PM, iRage said:

I think people are blinded with excitement and still haven't been hit with the financial implications.  Many seem to believe that once new cars start coming in the prices of used cars will significantly plummet (almost to pre-covid prices) and everything will be honky dory again. I believe the hyped inflation part will drop but the price increase affected by demand-supply dynamics will still keep the prices relatively high. I think it is obvious that the biggest changes in prices will be amongst the entry level cars (kei cars, entry level Vitz, Raize, all those mini Suzuki and Honda MPVs, etc...) Cars like the Axio and Aqua will be interesting to watch because on one hand the Aqua has become a bit more premium than the previous model (because the Aqua and the Yaris share the same platform). The Axio is still sold in Japan brand new but only as a business model. So the nicer WxB variant is simply not there. 

Still I beleive for normal cars (full-size Corollas, Priuses, new Vezel, Corolla Cross and even maybe the Yaris Cross) it will still be a lot of money. So I doubt cars like the Allion/Premio will go down by that much. Look at the numbers...

A 1.6L Corolla Sedan is 270mil and Prius is 371 as quoted by the agents. The equivalent to a Premio/Allion now in the Japanese market is Corolla (not the Axio) sedan. Our Corolla Touring, based on the customs estimates would have been 20.2mil LKR and that is without any importer profit margins. So a Corolla Sedan, Sports and Cross are going to be around that price mark. It can change by a few 100Ks depending on the age and condition. Now, the Corolla Touring and Sedan do have 1.5L gasoline variants, which would make it about 15-18mil (?), but they do feel very budget.  I don't believe the Allion/Premio crowd will like the new Corolla, especially the gasoline one. The ride is firmer and sportier and doesn't have that beige cloudy feel inside (the gasoline variant has torsion beam rear suspension, unlike the Hybrid with IRS, which makes it quite buoyant) .  @Noobdriver..sadly, from October 2022, Toyota Japan only offered the Corolla Sport in 1.8L Hybrid or 2.0L gasoline variants. So it is going to be pricey.

Cars like the Prado/LC 250 are going to be interesting as well. The LC 250 cannot be ordered at Toyota dealerships (waiting list is about 4 years and right now only sold through lottery..so you may get it within 3 to 4 years or have to wait for after that). Only option is to buy it through a 3rd party dealer and those come at nearly 50% markups. As a result even the 150 Prados are still as expensive as they were when they were new (FOB price of a LC250 at Toy#ta L#nka is actually cheaper than what you can get at a 3rd party car seller in Japan). So again...150 Prados and LC200s may not significantly drop in price due to supply issues. (also...the fanboys will get all excited with the LC250..but the true enthusiasts and those actually using it will realize the LC250 is not that great when it comes to the engine)

We don't know how many cars will still be imported into the country (especially considering the cost people may not have money...or the government might curb the number of imports to slow down FOREX drainage). Secondly, if the number of cars being imported are lesser and considering the penalties the importers can potentially face, they are very likely to go for larger profit margins.

Pre-covid prices are gone. Also, apart from the GOSL stating that lifting of restrictions is in line with IMF requirements and that the government needs the tax revenue, we still have not heard anything about how the government plans to manage and balance all this (apart from statements saying the rupee will not devalue and forex will be balanced). So once the flood gates are open there might be ducts built up to restrict outflow. No idea if it is true, but foreign media are reporting that forieng investers are pulling back some of their investment because there is uncertainty of what will happen to the ruppee once restrictions are lifted.

Oh damn, the Corolla Sport only comes in the 1.8L variant now? I really wanted to buy that car.. I guess not now

Also as a side note. I have a slightly different opinion to yours.

I feel like cars like GP1, Vitz will not take a big hit. Instead, inflated cars like Swift (Almost 9 million) and GP5 (About 8 million) will take decent hits. Also, cars like Axio (10-15 mil), Premio (About 20 mil), Allion (About 18 mil), Vezel (10-15 mil) will take massive hits as the second-hand reconditioned cars will be on par with those prices and so provide less incentive to buy an older car for that price.

But I agree, overly inflated Kei Cars such as Wagon R, Spacia and the likes will take a strong beating in terms of pricing as well. At their market price, brand new 1L options would be way more superior than their 660cc engines lol.

In the end, the middle class dream of owning a car (Not a decent car, just owning a car) will not be an easy feat despite the imports I guess.

Edited December 21 by Noobdriver

[sathyajithj99]

 

 

 

Edited December 22 by sathyajithj99

[iRage]

On 12/21/2024 at 9:58 PM, Noobdriver said:

cars like Axio (10-15 mil)

Axio..yes...because a new one can be had for about the same price but not in high trim levels though. So while the typical uber trim Axious would go down the WxB trim level might be held up high by the oober-fan-boys and brokers. The alternative for the Axio WxB might be the 1,5L normal Corolla.

On 12/21/2024 at 9:58 PM, Noobdriver said:

Premio (About 20 mil), Allion (About 18 mil), Vezel (10-15 mil) will take massive hits as the second-hand reconditioned cars will be on par with those prices

Firstly, while Premios are advertised at 20 million, those I know who’ve purchased them seem to have paid between 16 to 18 million. So the actual trade prices maybe lower than what is advertised. Especially, when buying from an actual owner.

The challenge is that there are no "Lankan" replacements for models like the Vezel, Premio, and Allion.

The Vezel, now positioned as a more upscale option, costs about 400,000 yen more than the previous model when new and is reflected in the used car market as well. While the gasoline version is cheaper when new, it’s rarely available at auctions or elsewhere. When it does appear, intense bidding often drives its price up to match that of a low-end Hybrid (gasoline variants also tend to be more popular in African and other South Asian markets).

As for the Premio and Allion, I don’t see their audience embracing the Corolla as a replacement. While Toyota aimed the higher trim levels of the Corolla to match the A/P, it simply misses the mark. Despite having similar or even larger external dimensions, the Corolla feels more compact and smaller inside. For the A/P crowd, the ride quality—especially in the gasoline variant—falls short. Unless it’s the WxB grade, most Corolla trims come across as "budget" or cheapish.

The Corolla might see some initial popularity, but I feel many will grow to dislike it as an A/P replacement with time, particularly with the gasoline variant and its basic suspension setup. While the lower and mid-level gasoline trims of the Corolla might serve as a replacement for the high-trim Axios, they wouldn’t meet the expectations of A/P owners. Also, the Corolla is a Corolla. The Premio and Allion were associated to the likes of the Corona and Carina which were more premium cars than the Corolla back in the day.

Adding to the challenge, there are virtually no other sedan options in Japan. The Mazda3 sedan is a rare sight, and the Civic sedan was quietly discontinued due to poor sales, leaving only the hatchback.

Ultimately, the type of car doesn’t matter—it all comes down to supply. Currently, there seems to be an assumption that lifting the ban will allow unlimited car imports as long as there are buyers. I hope this won’t be the case. Just because the country might need, say, 20,000 cars a year doesn’t mean it can afford to import that many annually. It would be a shame if the government just opened the floodgates. We have an opportunity to have a proper controlled system ensuring vehicles in good condition are brought in.

Looking at the pre-order lists circulating, it seems there might be limits to the available numbers, and everyone is scrambling to secure their share of the pie. As for the prices these sellers advertise, it’s clear they’re quoting entry-level models (judging by current prices in Japan) without any markup. Many high-trim levels may only be upscaled locally—similar to how we got our G Supiri Premiors.

It’s amusing to see one group of sellers trying to convince people that prices will drop while another insists they’ll rise. It’s their usual tactic of creating confusion for their own benefit, even before imports have started. Adding to the irony, they’re circulating a copy of the gazette, but the cars they’re heavily advertising aren’t even listed among those allowed under the lifted ban. Classic dirty tricks at play!

On 12/21/2024 at 9:58 PM, Noobdriver said:

Corolla Sport only comes in the 1.8L variant now?

1.8L HYBRID and 2.0L gasoline

[amsandun]

On 12/6/2024 at 6:30 AM, kush said:

If 7 years is allowed it will be 2018 upwards.

It won't be the case always. Earlier, up to 3 years meant not from the year of manufacture but from the date of first registration. You could bring down a vehicle up to 3 years from the date of first registration and cancellation certificate of this first registration was a must to include in the documents to import and produce to Customs. So even this 7 year thing too would mean slightly older vehicles than 2018 will be brought down if above documents can be submitted.

On 12/3/2024 at 8:05 AM, Gummybr said:

The given prices does include the Excise duty, Luxury Tax and VAT paid at customs

Excise duty, Luxury Tax maybe correct but VAT... VAT was not a component included in the motor vehicles tariff when we last imported vehicles. VAT was not paid, only Excise, Luxury (where applicable) and a VEL (Vehicle Entitlement Levy) of 15,000/- per vehicle. 

We were using the right side of above equation for Excise Tax. Taking a Vitz as an example in 2018, excise duty = 996 x 1750 (1,743,000/-) this was what I paid in 2018 for my car. But now that 1750/- per cm3 is 2300/- in current tariff.

So there's no VAT paid earlier at the time of importation. But, if VAT becomes payable now, it's a whole different story.

VAT base is so ridiculous that it takes excise tax (e) in it too. VAT base would be much higher than the CIF and think of 18% of that base.

I think (just my opinion) that all those quoted prices may have been calculated using above Excise tax equation approximately (CIF + Excise Duty + Luxury Tax + VEL ) and because of uncertainty of VAT, they just say +VAT in advertisements. There will be a budget early next year and if they plan to go forward importing vehicles, there'd surely be revisions to current motor vehicles tariff. Then we can know for sure how they're gonna impose taxes on vehicles this time.

 

 

[iRage]

6 hours ago, amsandun said:

Earlier, up to 3 years meant not from the year of manufacture but from the date of first registration.

Exactly...and in most countries there really isn't a year of manufacture, it is the year of first registration, because of stock transfers and ex-stock. In Japan year of manufacture is year of first registration. None of the official documents say what the year of manufacture is.

6 hours ago, amsandun said:

So there's no VAT paid earlier at the time of importation. But, if VAT becomes payable now, it's a whole different story.

Here is the tax estimation done by the customs department for our Corolla. This was done in June of this year. They calculate VAT very well at customs. Don't know if this would be changed for vehicle importers. But if cars come in as direct imports via 3rd party importers, VAT may be charged at customs. The LKR valuation of the car was a bit less than 5.4mil (the yen was 1.96 LKR at the time, since this was our family car we didn't have purchase invoices from the time of import, so they took the brand-new value of the car and depreciated it to 85% (as the car was 1.5 years old at the time of landing). Same thing was done to one of my wife's colleagues last month. So for now they are still using the same approach as before.

 

About the published prices by all those 3rd party importers...for many cars they have used the lowest auction-priced cars for the oldest entry-level grades (and in cases like the Corolla there is no way they can provide a none junk unit for advertised prices even if it is the lowest grade and LT is included). They also seem to have left out any profit margin for themselves (maybe they are willing to keep whatever bit they can make from the auction...doubt it though). Even the agent prices, what they have quoted, are base values for entry-level trims, so they are not revealing a lot either. So, in reality, you might end up paying through the roof just for having basics such as window visors and carpets  . 

So yeah...the hyped up price increment which the brokers and the likes are peddling will come down. I doubt we will see the likes of 5-6-year-old Vezels going down to like 4 to 5 mil price tags we saw before the pandemic. 

What seriously worries me is this....at auction you can buy a 3 year old Corolla for even 1mil yen. The thing is...you don't want those cars. A lot of the cars imported in the past are rental cars in Japan which get sold off in 3-4 years but have nearly 150,000+ kms the least. But the rental cars bought down to SL barely have 50,000km on them.

 

Edited Monday at 07:25 PM by iRage

[amsandun]

On 12/23/2024 at 9:25 PM, iRage said:

Here is the tax estimation done by the customs department for our Corolla. This was done in June of this year. They calculate VAT very well at customs. Don't know if this would be changed for vehicle importers. But if cars come in as direct imports via 3rd party importers, VAT may be charged at customs.

According to this tax breakdown it seems the VAT is now payable at the time of importation. Did you bring the car under some concessionary terms like some permit? 
I think vehicle importers or individuals, both will have to pay 18% VAT according to current regulations and tariff (and your case described above).

[iRage]

On 12/25/2024 at 2:31 AM, amsandun said:

According to this tax breakdown it seems the VAT is now payable at the time of importation. Did you bring the car under some concessionary terms like some permit? 

It was brought in under an expat's duty-free entitlement (my wife gets to bring down a duty free car during her posting in SL). 

It is quite likely that it is paid at the time of import to customs. It would avoid a whole lot of black-marketing stuff that was happening so the government could secure the VAT component. From the consumer's point of view, it could minimize the snowballing of the VAT component (getting added on at each buying-selling cycle) and the taxation could happen on just the gain recorded.

 

Edited Wednesday at 06:45 PM by iRage

[sathyajithj99]

If the current tax system is going to be implemented for vehicle imports there will be an influx of 1L hatchbacks like Yaris,  subcompact crossovers like Yaris Cross, Raize and 1.5L hybrid compact crossovers like Vezel, Yaris Cross hybrid(sub compact). Also 1.5L hybrid mid size crossovers like Nissan Xtrail has a chance to reach the sores compared to gasoline 1.5L ones like Honda CRV, ZRV or Toyota Harrier which is 2L due to taxation based on cc value

Edited yesterday at 01:16 AM by sathyajithj99

[Gummybr]

13 hours ago, sathyajithj99 said:

If the current tax system is going to be implemented for vehicle imports there will be an influx of 1L hatchbacks like Yaris,  subcompact crossovers like Yaris Cross, Raize and 1.5L hybrid compact crossovers like Vezel, Yaris Cross hybrid(sub compact). Also 1.5L hybrid mid size crossovers like Nissan Xtrail has a chance to reach the sores compared to gasoline 1.5L ones like Honda CRV, ZRV or Toyota Harrier which is 2L due to taxation based on cc value

Luxury tax calculation is wrong. For petrol anything above 4 mil is calculated at 100% for hybrid anything above 3.5m calculated at 90%.

Electric anything above 6m is calculated at 60%. The 12m was only for the migrant worker permit.

 

Also I think the 1000cc category is wrong need to check.