Import Tax Slashed By 50%

SeanD · June 21, 2010

If the car market doesn't pick up with the current tax reduction (and 1600 new Marutis on the road doesn't constitute a "pick up" I think) then may be we can expect a further tax reduction to 2003/2004 levels

xXx · June 21, 2010

checked with the agents - the L200 Sportero is down from 10.5 million to 7 Million!

sorry mate meant to say LC200. How much are they quoting for B/N V93????

Monty V93 and LC120 (YOM 2008) meant to hover in the 10mil range

L board · June 22, 2010

Wanna know my opinion? When the tax increases the price of a unregistered or brand new vehicle, the segment of the market who cant afford to reach the new price (and this is a very large segment) are compelled to look for a cheaper variant of the vehicle or a second hand vehicle. Demand for the second hand vehicle increases and price increases as a result.

Yes agreed

In this case with the price of a new vehicle will come in to the range of a considerable segment BUT not as large as you would think. Believe it or not; not everybody can stretch their budgets from 1.6 to 2.6. But the chances of them stretching it from 2.6 to 3 mn are quite higher. And that is why I believe that the cars at the two extremes are going to be hit the worst. Cars in the middle should not be effected as much IMHO. Now I'm not sure of the exact effect of the tax on the price of a new FB 15. (maybe you with your direct line to A*W can advise me) but will it come down to the 1.5 mn for the 1999-2000 FB 15? I don't think so. So for a person who can afford only 1.5 and wants to buy a Sunny then he can scream all he wants about the tax reduction but....

I don't have a direct line to A*W. I just took my vehicle for a service to A*W Peliyagoda last Friday and then I asked about the new demand. Well about the FB15 price, we have different opinions here. I think FB15 should fall well below 1.5M. Must wait and see....

Likewise we can assume that the person who can afford to buy a Maruti brand new now will do so as the difference between the BN and the second hand is not as challenging to bridge hence the expected drop in that part of the market.

Agreed

And you might want to look at the previous posts. Most of us think there will be an effect of a moderate reduction in prices of the cars in the middle of the spectrum . A crash is not the reduction of 400k to 500k mate its alot more.

Rather than absolute figures, a drop of more than 15% can be considered a crash I believe. My guess in this case would be a 30-40% drop in 2-3 months. We have to wait till the new vehicles come to the market such as the Axio, Premio, Belta, Sunny, Civic, Elantra etc. Will wait and see.

Having said all that the most expected reason for a mass drop in prices is if panic mongers keep spreading the "market is gonna crash so sell soon" mantra. Most Sri Lankas are easily persuaded so lets wait and see what happens. If your right then great! I can buy a new car!

I believe our community is more intelligent to assign a value to a vehicle rather than going by speculation. So depending on the prices of new unreg and BN prices, people would value the second hand vehciles. For example, when an unreg Axio is available for 3.5M, I dont think our buyers will value a 2001 121 for 3.5M. It would be below 2.5M for sure. Now this doesnt mean all our 121 sellers are now going to sell their vehciles for that price. It takes time for the market to stabilize at the new equilibrium point.

PS Today a friend told me that De Silva motors had valued a 2006 Vios at 1.8 MN! And that constitutes a market crash!!!

Phew I wonder how they did that.

LOL so we are told,
Let us know when you find the 'one'

Time will tell.

Elvis_Pil · June 22, 2010

Anyone saw the full page ad in today's papers for the new 5 series? 15.9mil all inclusive

VVTi · June 22, 2010

Sri Lanka car tax cut sends market into a spin
June 22, 2010 (LBO) - A steep tax cut on vehicle imports in Sri Lanka has injected life into the almost comatose car trade, but some dealers are stubbornly holding onto high prices hoping that the lower tax regime will not last too long.

They are appealing to the fear and greed of buyers. While some may not trust the government to maintain a pragmatic tax structure, others want to have the satisfaction of beating the system before taxes are put up again.

But with an International Monetary Fund deal keeping dollar shortage phobias at bay, and the government's comfortable foreign reserve stock, the tax cut may be expected to last at least as long as the IMF calls the shots.

Despite the heavy advertising of vehicles at "new duty rates", "prices slashed," "lowest price in town," many appear to be reluctant to part with fleets imported at higher rates.

A dealer at Bambalapitiya offers a 2006 Toyota Belta (1000cc) at 3.6 million, when his list price for a newer 2007 Toyota Belta (1300cc) car is 3.2 million rupees. Hard to imagine the nutter who will pay 400,000 rupees more for an older and less powerful car.

At Kohuwela, a dealer offers a 2-wheel drive Navara smart cab at 4.2 million rupees. Drive a little further away to Mount Lavinia and the identical Nissan is offered at 4.9 million rupees and the person who buys it must have a place reserved at Angoda.

An ambitious young man advertised his registered 121 Toyota Corolla (2006) at 4.5 million rupees when the better and newer unregistered Toyota Corolla 141 (2007 manufacture) could be had for 3.5 million rupees.

The man's explanation for holding out: "The 121 is a better car than the 141." By his logic, the 1984 Toyota DX 72 wagon or the 1972 Corolla KE20 must be worth a fortune.

Then there is the owner of a 2006 Maruti Alto who advertised in a Sinhala language paper asking for 1.35 million for his well maintained car when the same model brand-new car can now be had for 50,000 rupees less.

When the new price was pointed out, the man broke down and said he would never sell his car.

Many rushed to buy the so called "smart cab" because it was imported as a "lorry" and attracted a modest 10 percent duty rate. But with the new duty structure the smart cab is no longer a smart option.

Toyota has slashed the price of 4-wheel drive double cab by more than four million rupees. The 10.5 million rupee 4WD Hiluxe Toyota is now a more attractive six million. Only just over a million more than a smart cab.

The previous duty structure did not encourage the import of diesel-powered dual purpose vehicles.

That is why we have an ageing fleet of vans and double cabs as well as a large number of illegally assembled (erroneously called body-permitted) jeeps.

The new duty will encourage the import of second-hand diesel cabs and vans from Japan as well as South East Asia which should further depress prices. How smart would it be to drive a smart cab then?

With fleets of cars being unloaded at the Colombo port and labourers working overtime to clear space at the harbour to accommodate the flood of vehicles, the market can only slip further with competition getting stiffer.

If you are selling, do it fast. If you want to buy, don't rush.

VVTi · June 22, 2010

Anyone saw the full page ad in today's papers for the new 5 series? 15.9mil all inclusive

I took mine yesterday for a check on a small issue, it seems more than 15 are already pre-sold.

Ripper · June 22, 2010

Wanna know my opinion? When the tax increases the price of a unregistered or brand new vehicle, the segment of the market who cant afford to reach the new price (and this is a very large segment) are compelled to look for a cheaper variant of the vehicle or a second hand vehicle. Demand for the second hand vehicle increases and price increases as a result.
In this case with the price of a new vehicle will come in to the range of a considerable segment BUT not as large as you would think. Believe it or not; not everybody can stretch their budgets from 1.6 to 2.6. But the chances of them stretching it from 2.6 to 3 mn are quite higher. And that is why I believe that the cars at the two extremes are going to be hit the worst. Cars in the middle should not be effected as much IMHO. Now I'm not sure of the exact effect of the tax on the price of a new FB 15. (maybe you with your direct line to A*W can advise me) but will it come down to the 1.5 mn for the 1999-2000 FB 15? I don't think so. So for a person who can afford only 1.5 and wants to buy a Sunny then he can scream all he wants about the tax reduction but....

Likewise we can assume that the person who can afford to buy a Maruti brand new now will do so as the difference between the BN and the second hand is not as challenging to bridge hence the expected drop in that part of the market.

And you might want to look at the previous posts. Most of us think there will be an effect of a moderate reduction in prices of the cars in the middle of the spectrum . A crash is not the reduction of 400k to 500k mate its alot more.

Having said all that the most expected reason for a mass drop in prices is if panic mongers keep spreading the "market is gonna crash so sell soon" mantra. Most Sri Lankas are easily persuaded so lets wait and see what happens. If your right then great! I can buy a new car!

PS Today a friend told me that De Silva motors had valued a 2006 Vios at 1.8 MN! And that constitutes a market crash!!!

LOL so we are told,

Let us know when you find the 'one'

right or wrong....i too am on the same opinion!

Elvis_Pil · June 22, 2010

Interesting read on LBO:http://www.lbo.lk/fullstory.php?nid=1875951084

Sri Lanka car tax cut sends market into a spin

June 22, 2010 (LBO) - A steep tax cut on vehicle imports in Sri Lanka has injected life into the almost comatose car trade, but some dealers are stubbornly holding onto high prices hoping that the lower tax regime will not last too long.

They are appealing to the fear and greed of buyers. While some may not trust the government to maintain a pragmatic tax structure, others want to have the satisfaction of beating the system before taxes are put up again.

But with an International Monetary Fund deal keeping dollar shortage phobias at bay, and the government's comfortable foreign reserve stock, the tax cut may be expected to last at least as long as the IMF calls the shots.

Despite the heavy advertising of vehicles at "new duty rates", "prices slashed," "lowest price in town," many appear to be reluctant to part with fleets imported at higher rates.

A dealer at Bambalapitiya offers a 2006 Toyota Belta (1000cc) at 3.6 million, when his list price for a newer 2007 Toyota Belta (1300cc) car is 3.2 million rupees. Hard to imagine the nutter who will pay 400,000 rupees more for an older and less powerful car.

At Kohuwela, a dealer offers a 2-wheel drive Navara smart cab at 4.2 million rupees. Drive a little further away to Mount Lavinia and the identical Nissan is offered at 4.9 million rupees and the person who buys it must have a place reserved at Angoda.

An ambitious young man advertised his registered 121 Toyota Corolla (2006) at 4.5 million rupees when the better and newer unregistered Toyota Corolla 141 (2007 manufacture) could be had for 3.5 million rupees.

The man's explanation for holding out: "The 121 is a better car than the 141." By his logic, the 1984 Toyota DX 72 wagon or the 1972 Corolla KE20 must be worth a fortune.

Then there is the owner of a 2006 Maruti Alto who advertised in a Sinhala language paper asking for 1.35 million for his well maintained car when the same model brand-new car can now be had for 50,000 rupees less.

When the new price was pointed out, the man broke down and said he would never sell his car.

Many rushed to buy the so called "smart cab" because it was imported as a "lorry" and attracted a modest 10 percent duty rate. But with the new duty structure the smart cab is no longer a smart option.

Toyota has slashed the price of 4-wheel drive double cab by more than four million rupees. The 10.5 million rupee 4WD Hiluxe Toyota is now a more attractive six million. Only just over a million more than a smart cab.

The previous duty structure did not encourage the import of diesel-powered dual purpose vehicles.

That is why we have an ageing fleet of vans and double cabs as well as a large number of illegally assembled (erroneously called body-permitted) jeeps.

The new duty will encourage the import of second-hand diesel cabs and vans from Japan as well as South East Asia which should further depress prices. How smart would it be to drive a smart cab then?

With fleets of cars being unloaded at the Colombo port and labourers working overtime to clear space at the harbour to accommodate the flood of vehicles, the market can only slip further with competition getting stiffer.

If you are selling, do it fast. If you want to buy, don't rush.

saraprobe · June 22, 2010

I was about to post this, any way I love this remark,

"With fleets of cars being unloaded at the Colombo port and labourers working overtime to clear space at the harbour to accommodate the flood of vehicles, the market can only slip further with competition getting stiffer.

If you are selling, do it fast. If you want to buy, don't rush."

Edited June 22, 2010 by saraprobe

Elvis_Pil · June 22, 2010

So how much was the rate when you purchased it?

I took mine yesterday for a check on a small issue, it seems more than 15 are already pre-sold.

mistaken_ID · June 22, 2010

http://www.autolanka.com/ad.asp?ID=29147

1.25 million for a 1995 basic FB14, and how on earth it can do 16 Litres per KM? this guy must be Dr Nihal!

VVTi · June 22, 2010

So how much was the rate when you purchased it?

Mine's not a 5...

Its a 1997 E36. They said '15 BMWs'. Was not model specific.

Muditha420 · June 22, 2010

Guys, sad thing is went around calling few places the prices of smart cabs 4.2mil... won't these come down anytime soon. wonder how much a recon 4door hilux would be coz no point asking Toyota they don't bring those....

by the way these vigos, are they still under lorry license or have they changed? then won't they get affected by the price reduction?

saraprobe · June 22, 2010

http://www.autolanka.com/ad.asp?ID=29147
1.25 million for a 1995 basic FB14, and how on earth it can do 16 Litres per KM? this guy must be Dr Nihal!

Why most people in sri lanka put as used by a doctor, amusing, is he or she superman? if that's used in here people would say get f**k**ed! :rolleyes:

Edited June 22, 2010 by saraprobe

lasi · June 22, 2010

PS Today a friend told me that De Silva motors had valued a 2006 Vios at 1.8 MN! And that constitutes a market crash!!!

Pericles · June 22, 2010

http://www.autolanka.com/ad.asp?ID=29147
1.25 million for a 1995 basic FB14, and how on earth it can do 16 Litres per KM? this guy must be Dr Nihal!

I'm guessing you missed this post?

Guys can you please stop dissing peoples adverts on the forum? The ad revenue is what allows this site to run, and no one wants to advertise in a place where people are pointing them out and mocking them. Trading is a market process, the trade happens when, both parties, buyer AND seller agree on a price, but in the meantime, the quote can be anything.
Also, ppl don't sell their cars coz they have suddenly stopped working. If no one is buying your car at the price you wanna sell, you can keep using your car. Unless you need to get rid of it coz your migrating or something, you can still keep it and run it. In the second hand market, the buyer can quote taxes, market price, his opinion, anything he wants until he is blue in the face, but if the seller doesn't want to give at that price, then the buyer aint getting that car. Its really bloody simple.

So again, stop dissing the adverts. By all means, discuss what you think the prices should be for certain models, but stop dissing selected adverts.

mistaken_ID · June 22, 2010

I'm guessing you missed this post?

yup! sorry I didn't see that!

saraprobe · June 22, 2010

Where is that place? I mean De Silva motors ? is that the one in Kirulapana?

L board · June 22, 2010

Where is that place? I mean De Silva motors ? is that the one in Kirulapana?

Yes that is the one. They are more closer to Nugegoda now on railway avenue when I went there last year.

Z.u.L · June 22, 2010

I'm after a skyline too. Got all the tax, agent price worked out. But the seller in Jap is not willing to do LC. Let me know if you decide the skyine and let me know if your seller okay with LC.

i dont have a seller machan, i personally import my vehicles. i have my cuz in japan, he fetches the car there and sends it.

LaZyBoY · June 22, 2010

Interesting read on LBO:http://www.lbo.lk/fullstory.php?nid=1875951084
Sri Lanka car tax cut sends market into a spin

..Many rushed to buy the so called "smart cab" because it was imported as a "lorry" and attracted a modest 10 percent duty rate. But with the new duty structure the smart cab is no longer a smart option.

Toyota has slashed the price of 4-wheel drive double cab by more than four million rupees. The 10.5 million rupee 4WD Hiluxe Toyota is now a more attractive six million. Only just over a million more than a smart cab.

The previous duty structure did not encourage the import of diesel-powered dual purpose vehicles.

That is why we have an ageing fleet of vans and double cabs as well as a large number of illegally assembled (erroneously called body-permitted) jeeps.

The new duty will encourage the import of second-hand diesel cabs and vans from Japan as well as South East Asia which should further depress prices. How smart would it be to drive a smart cab then?

That's not quite right, is it? The drop in duty hasn't had any real impact on the import cost of Smart cabs, only the price of double cabs (which was ridiculously high) has dropped significantly. That said, brand new ones will still set you back 6.5mil, which is a fair bit more than a Smart can be had (~4.5mil mark). Also the D-cabs are 2500cc non i/c while the smarts (G-grade) are 3L I/C turbo. These comments (the whole piece for that matter) smacks of heavy cynicism :rolleyes:

saraprobe · June 22, 2010

A dealer at Bambalapitiya offers a 2006 Toyota Belta (1000cc) at 3.6 million, when his list price for a newer 2007 Toyota Belta (1300cc) car is 3.2 million rupees. Hard to imagine the nutter who will pay 400,000 rupees more for an older and less powerful car.

:rolleyes:

hyacc · June 22, 2010

Toyota has slashed the price of 4-wheel drive double cab by more than four million rupees. The 10.5 million rupee 4WD Hiluxe Toyota is now a more attractive six million. Only just over a million more than a smart cab.

When I checked from Toyota Lanka last week price was 6.7m for a double cab. Today I bought a BN 2.5L 4WD I/C turbo smart cab with Carryboy G3 canopy + DVD for a 4.15m from U# sale.

Edited June 22, 2010 by hyacc

xXx · June 22, 2010

Where is that place? I mean De Silva motors ? is that the one in Kirulapana?

De Silva Motor Engineers (i think thats' what they are called don't sell cars they only provide valuations for cars. It can be safely said there's no way a 08 Vios can be brought down to SL bellow 2 mil. Let me know if anyone find one.

May be someone wanted a lower valuation for insurance purposes. Normally its the other way arround people want higher valuations to pocket some of the loan/lease money.