Vehicle Import Restrictions to be Lifted!

kush · January 14

Even if the vehicle market is opened we need to make sure that LC payments should happen gradually not to shock the exchange market. When the bond restructure took place few months back some banks needed to buy dollars from the market and the rates went up by around Rs. 20. I don't have the exact figures but this would have been in millions. Moment this happened exporters kept their dollars expecting further depreciation that pushed the dollars more. CBSL at the moment does not have sufficient reserves to manage these shocks.

Just imagine if we open LCs to USD billions and when they come in within a period of few months.

Main reason for giving away of the restrictions is to satisfy the IMF and other donor agencies and to bring in taxes. So how the hell you are going to achieve that with lower taxes.

Vehicle importers are lobbing for older vehicles to maximize their profits. New cars have gone up in prices and as a result used prices too. Universally people are hanging on to their vehicles for a longer time.

In my view better to wait until this whole hulla balu is settled my be a year or so (we have already waited 5 years) until this whole thin is settled.

Once we have more stability in the economy there could always be possibilities in tax reductions or some kind of permit systems that would bring down the cost.

RWD · January 14

I see an influx of ads of people trying to sell their cars on social media. And so called "buyers" who are most likely brokers quoting rock bottom offers no doubt trying to take advantage of all the confusion to make a quick buck. Told a few people not to be so quick to dispose of their cars in this bloodbath but if they have the finances to go for a new one to go ahead. We have to start repaying our loans by 2028 and unless some serious reforms take place between now and then this vehicle importing window could be very short lived.

slingshot · January 14

Contacted few exporters in Japan and none of them are accepting LCs. Only 100% advance for any export to Sri Lanka.

Also, seeing a lot of new importers with new Facebook pages trying to take people for a spin with their whole new translations of auction sheets.

A lot are desperate to get their hands on a new vehicle, a lot will not get the best value for their money I feel.

Edited January 14 by slingshot

kush · January 14

Not even that i have seen few advertisements in FB market place with below market prices. However when inquired i get the feeling that they are not genuine sales. I believe there is a racket to bring the current market prices down by a certain segment.

In a country where majority do not pay or underpay their taxes there is no way the government can afford to reduce taxes on spending. This is the only way we can recover taxes. Only victims in this process is very few people who actually pay taxes majority being middle class salaried who end up paying taxes up to 36% on their salary and when they save that get taxed too.

If ever there is to be justice they should not allow anyone to bring down a vehicle who has not paid their taxes for the last five years. Better still may be imposed a license system based on taxes paid.

slingshot · January 14

Yes. There's definitely a racket - there are few dozens of posts being published on Facebook groups every day with fake profiles and as anonymous, all slandering used vehicles and prices.

Edited January 14 by slingshot

iRage · January 14

On 1/14/2025 at 5:45 AM, RWD said:

I see an influx of ads of people trying to sell their cars on social media. And so called "buyers" who are most likely brokers quoting rock bottom offers no doubt trying to take advantage of all the confusion to make a quick buck. Told a few people not to be so quick to dispose of their cars in this bloodbath but if they have the finances to go for a new one to go ahead. We have to start repaying our loans by 2028 and unless some serious reforms take place between now and then this vehicle importing window could be very short lived.

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That is the thing...if you have a decent car...it probably is best to hold on to it at this stage. There are way too many vultures simply waiting to exploit the situation by spreading fake news.

On 1/14/2025 at 6:57 AM, slingshot said:

Contacted few exporters in Japan and none of them are accepting LCs.

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A whole lot of Japanese owned exporters stopped exporting to Sri Lanka decades ago because of all the LC racketeering. Have you noticed that most of these "we are ready to import" adverts are either anonymous or some unknown entity who has "just entered the market"? The "veteran" importers (who are usually also exporters from Japan) seem to be more focussed on getting the government to extend the age limits.

On 1/14/2025 at 6:57 AM, slingshot said:

Also, seeing a lot of new importers with new Facebook pages trying to take people for a spin with their whole new translations of auction sheets.

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I like to troll those posts. Have received some nicely worded DMs too

On 1/14/2025 at 6:57 AM, slingshot said:

A lot are desperate to get their hands on a new vehicle, a lot will not get the best value for their money I fee

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Sad truth is Sri Lankans have not gotten their money's worth when it comes to cars for a long time. A majority coming in were junk cars and it is going to continue. But you are right...desperation of the buyers are most likely going to lead to these importers taking advantage of them even more.

On 1/14/2025 at 7:05 AM, kush said:

If ever there is to be justice they should not allow anyone to bring down a vehicle who has not paid their taxes for the last five years. Better still may be imposed a license system based on taxes paid.

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I actually like this idea. A good tax history should result in duty credits for a vehicle import. I believe a similar program was there a long time ago. My uncle got a Civic FD (when they were still brand new) through something like that.

slingshot · January 25

Guys, just a heads up, seeing a Facebook page called RMD Trading making rounds on FB claiming that they import and their cars are already reserved.

I checked in Makola and they don't seem to have an office even. Looks very shady.

sathyajithj99 · January 25

On 1/25/2025 at 5:12 AM, slingshot said:

Guys, just a heads up, seeing a Facebook page called RMD Trading making rounds on FB claiming that they import and their cars are already reserved.

I checked in Makola and they don't seem to have an office even. Looks very shady.

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And their prices are too good to be true.

Also many on fb have quoted their page to show the new imports are going to be cheap and 2nd hand vehicle market will fall.

Looks like someone is trying to make some bucks by buying 2nd hand ones for cheap.

Edited January 25 by sathyajithj99

iRage · January 27

On 1/25/2025 at 9:21 AM, sathyajithj99 said:

And their prices are too good to be true.

Also many on fb have quoted their page to show the new imports are going to be cheap and 2nd hand vehicle market will fall.

Looks like someone is trying to make some bucks by buying 2nd hand ones for cheap.

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Yeah...trolled their posts till they started to take them off They literally posted stocks belonging to Nissan and Toyota used car dealerships claiming to be their stock.
Then a few days later the same style of adverts started appearing under some other name.

Just don't believe any of the prices anyone claims. Nothing is known yet, so everyone is just grasping at straws.

iRage · January 28

Now, out of the blues, all these importers with plenty of stocks of normal cars suddenly have plenty of stocks of pickup trucks for immediate import

I don't even know what is going on...does the latest gazette only open up goods transport and mass public transport vehicles ?

Izza · January 28

On 1/28/2025 at 7:32 AM, iRage said:

Now, out of the blues, all these importers with plenty of stocks of normal cars suddenly have plenty of stocks of pickup trucks for immediate import

I don't even know what is going on...does the latest gazette only open up goods transport and mass public transport vehicles ?

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Looks like it: http://ads.newswire.lk/gazette/27-Jan-2025/Gazette_No_2421-04.pdf

Noobdriver · January 29

I guess there will be no personal vehicle imports... yet. xD Just public transport and commercial usage-based vehicles will be allowed for now.

iRage · January 29

On 1/29/2025 at 12:58 AM, Noobdriver said:

I guess there will be no personal vehicle imports... yet. xD Just public transport and commercial usage-based vehicles will be allowed for now.

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Not sure if this is true but I have heard from someone known to me over here in JPN that some Sri Lankan car exporters actually started collecting stocks of the tentatively popular models (Yaris, Raize, Corolla, etc..) are are feeling a bit screwed now.
Here is the hitch....because of Japan's own economic issues people are holding on to their cars longer or are simply not buying cars. So, the stock of 3 years or less cars that come up on auction are quite small compared to what it used to be. They can't even go order brand new cars from the dealerships because after covid there are long delivery times (6-7 months for a Corolla/Yaris compared to a month at most or a Premio/Aqua back in the day). So...they are stocking up.

Noobdriver · January 29

On 1/29/2025 at 7:22 AM, iRage said:

Not sure if this is true but I have heard from someone known to me over here in JPN that some Sri Lankan car exporters actually started collecting stocks of the tentatively popular models (Yaris, Raize, Corolla, etc..) are are feeling a bit screwed now.
Here is the hitch....because of Japan's own economic issues people are holding on to their cars longer or are simply not buying cars. So, the stock of 3 years or less cars that come up on auction are quite small compared to what it used to be. They can't even go order brand new cars from the dealerships because after covid there are long delivery times (6-7 months for a Corolla/Yaris compared to a month at most or a Premio/Aqua back in the day). So...they are stocking up.

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Yeah, I'm assuming personal car imports will be opened up towards the 3rd or 4th quarter of this year. Didn't the CBSL Governor in an interview say that he wants to protect people who have paid exorbitant prices for cars, while at the same time, new cars shouldn't be at a price point where everyone wants a newer model?

Also, I noticed you mentioned that Sri Lankan importers mostly get cars from the junk section. Do we as consumers have the ability to determine the quality of the vehicle? Are auction sheets helpful or are they forged?

Edited January 29 by Noobdriver

kush · January 30

I remember in 2019 when they released the permits auction prices in Japan for Allion/ Premio, CRV went up. Currently only few vehicles will be tax efficient mosty less than 1000cc and 1.5 hybrids. Only few selected models like Yaris, Aqua, Yaris Cross, Vezel that come in to my mind. Even the Corolla and Corolla Cross will be expensive.

Given the low supply prices might moving up in the auctions. This may be the reason for vehicle importers to lobby in to this 7 year thing which will allow them to get Sri Lankan favourites like Vitz, Aqua, Axio and even Premio/ Allion if there are any.

iRage · January 30

On 1/29/2025 at 3:30 PM, Noobdriver said:

Didn't the CBSL Governor in an interview say that he wants to protect people who have paid exorbitant prices for cars, while at the same time, new cars shouldn't be at a price point where everyone wants a newer model?

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Makes sense. Sadly not the best news for the consumer. The thing is car prices are never going to come back down (at least for a generation or so). This is the sad outcome of not focusing on building wealth but focusing more on getting something for cheap.

On 1/29/2025 at 3:30 PM, Noobdriver said:

I noticed you mentioned that Sri Lankan importers mostly get cars from the junk section. Do we as consumers have the ability to determine the quality of the vehicle? Are auction sheets helpful or are they forged?

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Well not necessarily the junk section but also low auction grade cars. If you can gain access to the actual auction sheet, then for an average car like Aquas, Vitz, etc...then yes you can trust the auction sheet (there are way to cheat...see below). However, what happens most of the time is they forge the auction sheet post-shipment or depending on what was fixed pre-valuation inspection. There are services you can use to get the vehicle verified. Used to cost anything from 30 to 50 USD. I beleive even car checks recently started a service to verify car details in Japan, UK, Australia and Thailand.

How to cheat the auction: This happens quite a lot with high value cars like GT-Rs, Supras and even cars like Land Cruisers and HiAces (the latter during a period when there were cars in short supply and prices were going crazy). They buy the junk car. Fix it up. Then auction it again. Car gets a new inspection. The inspection system records that the vehicle was previously auctioned but it doesn't necessarily show up on the auction sheet itself. Especially if you go from one auction company to another. So...the auction sheet would just reflect the condition of the car as they see it. It also makes it easier now because there are a lot of foreigners working at these places who are "friendly" with the exporters. Also, the volume of cars being traded is so high that it is easy to pass of cars with a false inspection.

On 1/30/2025 at 3:10 AM, kush said:

remember in 2019 when they released the permits auction prices in Japan for Allion/ Premio, CRV went up

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The whole talk about people hoarding up cars came about because we were talking about auction prices of unexpected models seemingly going up in price.

On 1/30/2025 at 3:10 AM, kush said:

Even the Corolla and Corolla Cross will be expensive

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The Hybrids yes...well out of bounds. The petrol variants with the 1.5L engine would be the expensive options.

On 1/30/2025 at 3:10 AM, kush said:

Given the low supply prices might moving up in the auctions

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That is the thing. They were already "high" relative to what it used to be like. It has gotten higher over the last few weeks. That is why I kept saying that for the prices these car importers kept advertising all you could get were the bottom of the barrel cars.

On 1/30/2025 at 3:10 AM, kush said:

This may be the reason for vehicle importers to lobby in to this 7 year thing which will allow them to get Sri Lankan favourites like Vitz, Aqua, Axio and even Premio/ Allion if there are any.

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Yes it is. Some have outwardly said it. Makes sense too. Only hitch is you cannot trust these guys to not start bringing in older junk.

Gummybr · February 1

So the government lifted restrictions on the importation of motor vehicles, what do we know so far?

1. EV taxes increased

2. Luxury Tax Threshold increased

3. Customs duty of 30% applicable on motor vehicles

4. Three year limit is still in effect.

As I once said the reason for removing restrictions are not for the love of the people but to earn more revenue to increase govt employee salaries, for subsidies and above all to stop the leasing companies and banks going bankrupt (by their own fault for taking inflated values for vehicles and finding ways to give above 50% of the value on lease, they have dug their own grave and there is no way for them to come out if people stop paying).

The double cab guys were shouting the whole of last week, wonder what happens now? Will they ditch the double cabs and start talking of cars again?

Forgot to ad, the dollar has been creeping up since 2 weeks ago, so you can expect the prices to go even higher.

On a side note I had my stop gap Alto for sale, the first week there was hardly any calls just people calling and offering ridiculous low prices (and here I was expecting to get rid of it fast, unlike my previous vehicles which were not easy to sell), when the import dealers started saying taxes will go up suddenly there was a spike in inquiries and the second guy who came to have a look bought it very close to my asking price ever since people are calling and asking if the car is there and what price I sold it for.

Edited February 1 by Gummybr

iRage · February 1

On 2/1/2025 at 5:58 AM, Gummybr said:

So the government lifted restrictions on the importation of motor vehicles, what do we know so far?

1. EV taxes increased

2. Luxury Tax Threshold increased

3. Customs duty of 30% applicable on motor vehicles

4. Three year limit is still in effect.

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A lot of people don't seem to realise that even though the LT thresholds were increased, the increase on the other taxes does not make it cheaper. Seriously. Aren't we teaching basic arithmetic at schools anymore?

Also..thr whole definition of the Year of Manufacture is quite confusing. All this time what was taken into account was the Year of First registration. That is what all the documents state. Finding the actual year of manufacture (and the month) is quite hard and does not really make sense when you consider how manufacturers stock vehicles based on production volume, allocation, etc... Then with the definition of Year of Manufacture and the resolution when the Year of Manufacture is not attainable you pretty much end up with a year less than what the limit is. So for used cars it ends up being 2 years, used vans 3 years, etc... Even if the vehicle is brand new the agent will have to make sure that the vehicle is fresh off the production line and not from ex-stock (which may not work properly considering how allocation might work).

Opening up imports has never been about giving people vehicles. That was just the facade to garner votes. Isn't it funny that all the 101 million car importers claiming ridiculously low prices have simply disappeared?

Anyway...cars are an unattainable commodity in Sri Lanka. These prices are not going to come down for a generation at least unless you simply make people lose money and collapse the financing system.

Edited February 1 by iRage

Noobdriver · February 1

On 2/1/2025 at 11:18 AM, iRage said:

A lot of people don't seem to realise that even though the LT thresholds were increased, the increase on the other taxes does not make it cheaper. Seriously. Aren't we teaching basic arithmetic at schools anymore?

Also..thr whole definition of the Year of Manufacture is quite confusing. All this time what was taken into account was the Year of First registration. That is what all the documents state. Finding the actual year of manufacture (and the month) is quite hard and does not really make sense when you consider how manufacturers stock vehicles based on production volume, allocation, etc... Then with the definition of Year of Manufacture and the resolution when the Year of Manufacture is not attainable you pretty much end up with a year less than what the limit is. So for used cars it ends up being 2 years, used vans 3 years, etc... Even if the vehicle is brand new the agent will have to make sure that the vehicle is fresh off the production line and not from ex-stock (which may not work properly considering how allocation might work).

Opening up imports has never been about giving people vehicles. That was just the facade to garner votes. Isn't it funny that all the 101 million car importers claiming ridiculously low prices have simply disappeared?

Anyway...cars are an unattainable commodity in Sri Lanka. These prices are not going to come down for a generation at least unless you simply make people lose money and collapse the financing system.

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A newer car for a budget buyer like myself looking to upgrade from a 2011 Vitz, I basically have to shell out ~10M to get a new Yaris with the same exact engine in my car right now or significantly more. This is crazy.

kush · February 2

This is what I have been predicting. International agencies wanted import restriction lifted, we need to hit IMF revenue targets so be it.

In a country where people do not pay their direct taxes what option does a government have but to tax consumption. Victims of this unfortunately is the middle class salaried guy who pays their due to the govt and also end up having to pay exorbitant taxes to buy a vehicle be it new or used. No government did anything to correct this injustice and even if this govt takes steps it will take couple of years hence these duties will go on for at least till next budget in 2026.

Secondly country simply cant afford imports at his time as we still have not got our revenues in place. Imports other than vehicles are also increasing. The amount of Double cabs orders from vehicle importers are unbelievable. Sometimes I wonder that we might bust the entire USD 1 Bn. on cabs.

Looking at the current duty structure cabs seems to be more tax efficient where the taxes as a % looks like 100-150% (I stand to be corrected on this). If this is the case people will start buying cabs instead of cars which are inefficient and will start clogging our roads due their sheer size.

In my view these high taxes should not continue as they will have longer term social repercussions. This was one of the reasons for the brain drain when a young guy start working their first dream is a car and when you have to pay USD 100-200K for a car that can be brought for USD 20-30K in Australia or Canada. A senior private executive could afford a C class Mercedes in 2018 now even the for the CEO this has become a dream.

Other issue is when the value of the vehicles go up your insurance premiums go up my insurance cost has been increasing over the last 5-6 years.

I'm hope and pray that some kind of adjustment will come in to this madness at least within next couple of years for all our sake.

slingshot · February 2

On 2/2/2025 at 3:13 AM, kush said:

Secondly country simply cant afford imports at his time as we still have not got our revenues in place. Imports other than vehicles are also increasing. The amount of Double cabs orders from vehicle importers are unbelievable. Sometimes I wonder that we might bust the entire USD 1 Bn. on cabs.

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Think this is pretty much accurate since cabs seem like the best bang for buck at the moment. For example, highest grade Honda Vezel and entry grade Hilux are pretty much the same price. If I was to select, I know what I will go ahead with.

Gummybr · February 2

On 2/2/2025 at 3:13 AM, kush said:

This is what I have been predicting. International agencies wanted import restriction lifted, we need to hit IMF revenue targets so be it.

In a country where people do not pay their direct taxes what option does a government have but to tax consumption. Victims of this unfortunately is the middle class salaried guy who pays their due to the govt and also end up having to pay exorbitant taxes to buy a vehicle be it new or used. No government did anything to correct this injustice and even if this govt takes steps it will take couple of years hence these duties will go on for at least till next budget in 2026.

Secondly country simply cant afford imports at his time as we still have not got our revenues in place. Imports other than vehicles are also increasing. The amount of Double cabs orders from vehicle importers are unbelievable. Sometimes I wonder that we might bust the entire USD 1 Bn. on cabs.

Looking at the current duty structure cabs seems to be more tax efficient where the taxes as a % looks like 100-150% (I stand to be corrected on this). If this is the case people will start buying cabs instead of cars which are inefficient and will start clogging our roads due their sheer size.

In my view these high taxes should not continue as they will have longer term social repercussions. This was one of the reasons for the brain drain when a young guy start working their first dream is a car and when you have to pay USD 100-200K for a car that can be brought for USD 20-30K in Australia or Canada. A senior private executive could afford a C class Mercedes in 2018 now even the for the CEO this has become a dream.

Other issue is when the value of the vehicles go up your insurance premiums go up my insurance cost has been increasing over the last 5-6 years.

I'm hope and pray that some kind of adjustment will come in to this madness at least within next couple of years for all our sake.

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There some common sense. If only the rest of the country understand the situation they won't be crying on social media about prices. If the people pay the correct taxes I am sure the duties can come down in the future, but problem will be how do you keep the banks afloat as they leant based on high values?

iRage · February 2

On 2/2/2025 at 3:13 AM, kush said:

This is what I have been predicting. International agencies wanted import restriction lifted, we need to hit IMF revenue targets so be it.

In a country where people do not pay their direct taxes what option does a government have but to tax consumption. Victims of this unfortunately is the middle class salaried guy who pays their due to the govt and also end up having to pay exorbitant taxes to buy a vehicle be it new or used. No government did anything to correct this injustice and even if this govt takes steps it will take couple of years hence these duties will go on for at least till next budget in 2026.

Secondly country simply cant afford imports at his time as we still have not got our revenues in place. Imports other than vehicles are also increasing. The amount of Double cabs orders from vehicle importers are unbelievable. Sometimes I wonder that we might bust the entire USD 1 Bn. on cabs.

Looking at the current duty structure cabs seems to be more tax efficient where the taxes as a % looks like 100-150% (I stand to be corrected on this). If this is the case people will start buying cabs instead of cars which are inefficient and will start clogging our roads due their sheer size.

In my view these high taxes should not continue as they will have longer term social repercussions. This was one of the reasons for the brain drain when a young guy start working their first dream is a car and when you have to pay USD 100-200K for a car that can be brought for USD 20-30K in Australia or Canada. A senior private executive could afford a C class Mercedes in 2018 now even the for the CEO this has become a dream.

Other issue is when the value of the vehicles go up your insurance premiums go up my insurance cost has been increasing over the last 5-6 years.

I'm hope and pray that some kind of adjustment will come in to this madness at least within next couple of years for all our sake.

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Yes..but sadly, we as a country simply do not have any common sense.
So far people are shouting about the price of the car. No one seems to care about the cost of financing or ownership costs like insurance. I thought that at the current interest rate of 11% financing cost alone for a 10mil LKR car is high. Also...these importers advertise prices for cars, and the breakdowns show CIF value and taxes, but their profit margins are still not stated anywhere.

Sadly, these prices simply cannot come down even after next year's budget. We will have to wait a long time until cars that were financed at hyper-inflated prices actually gradually depreciate to a point that the consumer and the lending agencies can actually handle it.

The worry I have had forever is (and why I simply gave up trying to move back to Sri Lanka in 2015)...what is the plan for Sri Lanka? What are we actually doing to improve the income of the country as a whole? What are we doing to grow and modernize our industries? Our exports are not very promising, and there seems to be no proper future-readiness/plan for us. We need to grow our export portfolio. Coming up with alternatives for consumption and hoping to reduce our import costs simply is not a sustainable solution. All I seem to hear is tourist this, tea that, assemble a car here, milk a cow instead of squeeze a coconut.

iRage · February 2

On 2/1/2025 at 11:36 PM, Noobdriver said:

A newer car for a budget buyer like myself looking to upgrade from a 2011 Vitz, I basically have to shell out ~10M to get a new Yaris with the same exact engine in my car right now or significantly more. This is crazy.

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Sadly yes Which would be okay if you actually make or has the potential to make a good income. Sadly, 99.9% of the time I don't see that happening no matter how talented they are or how hard they work.

amsandun · February 3

On 2/2/2025 at 3:13 AM, kush said:

The amount of Double cabs orders from vehicle importers are unbelievable. Sometimes I wonder that we might bust the entire USD 1 Bn. on cabs.

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The irony of people not understanding the meaning of "Dual purpose" and what their actual purposes are. It's crazy if people go in the queues to get cabs because they must have any possible new vehicle be it a tipper truck even and double cabs has best bang for buck at the moment. Soon when the insurance, fuel cost and maintenance comes, who knows they're not gonna hate the car, let it waste and pass on to another after a while?