Import Tax Slashed By 50%

isurujosh · June 20, 2010

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Edited June 20, 2010 by isurujosh

hakjay · June 20, 2010

May be this is old news but most car sale establishments work together. What I mean is on one sunday you will find the car in indra and the next may be at wheels lank.... . They rotate the cars!!!

kaushama · June 20, 2010

Yes. Car dealers in Japan are working as a clan to raise the prices in Japan by good few thousands of US$. Then the car dealers at home and brokers! They work collectively to rob our money. At the end of the day same old story. It is not the end user who benefits from the tax reduction. The people who suck blood and flesh of common people. There is mafia everywhere you go.

I think we should form a group here and try to get vehicles ourselves. Surely it should be non-profitable user group to see the back of these leeches, who wait to suck our hard earned money. I am sure we could do it as many people here are quite capable of doing it. I have seen in many foreign forums ( for example one HIFI equipment forum, of which I have been a pro member) have "group buy clans", who get together and bring gear for members themselves. By doing it as a group they reduce many overheads finally affecting the pricing.

Edited June 20, 2010 by kaushama

isurujosh · June 20, 2010

there are small timers who offer good value for money. but their effectiveness is marginalised because of the price manipulation in japan. i haven't seen many turn to markets other than japan as yet but i guess it's only a matter of time. manipulation can't go for ever. it's a simple fact of life.

Sri-Lak · June 20, 2010

The problem with importing private from europe is the shipping cost.

As far as I found it out, hardly any ship carries cars 'Roll on Roll'(RORO) to SL due to low volume and risk. So you have to order a dedicated 20ft container for the car, which can cost about 3000USD. When you add this to FOB value to get CIF and calculate TAX on top of that it amounts to about 4000USD only tax(on shipping).

So altogether you pay 7000USD(more than 7 lakhs) only for shipping! From Japan this should be less than 3000USD normally.(Shipping+TAX on shipping)

The solution I could think of at the moment is to order a 40ft container and pack 3-4 cars in it(depending on the size of the cars). You need experience for this.

Then again this is only useful if you import several cars.

there are small timers who offer good value for money. but their effectiveness is marginalised because of the price manipulation in japan. i haven't seen many turn to markets other than japan as yet but i guess it's only a matter of time. manipulation can't go for ever. it's a simple fact of life.

Edited June 20, 2010 by Sri-Lak

kaushama · June 20, 2010

Well There are few other problems in importing cars from European market. One is that if you want to bring the Japanese makes, the models in Europe are very different from ones you could see here. Secondly the CIF value of the many European cars are much higher than Japanese ones. Thirdly I do not think many European brands are cost effective options for local usage as the running cost is higher (Parts and FC) and the secondhand market is very dull. Shipping is another issue. I really explored this as I was eligible for a blue permit. But the car would have been "sada oba mage" considering all the costs involved.

Sri-Lak · June 20, 2010

Well There are few other problems in importing cars from European market. One is that if you want to bring the Japanese makes, the models in Europe are very different from ones you could see here. Secondly the CIF value of the many European cars are much higher than Japanese ones. Thirdly I do not think many European brands are cost effective options for local usage as the running cost is higher (Parts and FC) and the secondhand market is very dull. Shipping is another issue. I really explored this as I was eligible for a blue permit. But the car would have been "sada oba mage" considering all the costs involved.

Yes you are correct about european brands.

When I mentioned about shipping cost I was thinking about Japanese cars available in Europe which are also popular in Sri Lanka.

Becuase some members on the forum were questioning why we don't import directly from Europe instead of Japan to conuter price hike by car importers.

xXx · June 20, 2010

Guys,
There was an ad in one of the Automobile websites about a YARIS/BELTA. The car has not imported yet. The seller mentioned price is reduced under new tax.

I contacted him, he is not a car dealer but an individual who is doing some other job. But with help of some friends in Japan he is importing cars because of the tax reduction.

He said he can give the 1000cc car for 3 Mil and it was 4.4Mil previously !!!!

He further said car sales selling this at 3.3Mil or more....

I didnt want to talk further with him....

Let me get this straight, you found a good samaritan who would go through lot of hassle to help you buy a car and he keep '0' commission or profit????

Just like any other business people who bring down cars does it for a living they have to keep some profit inorder for their own survival. What's next? When the price of lentils go up next people in the neighbourhood get together and import a container of lentils???

Hold your horses wait for few months. The amount of cars on the way to SL simply outnumbers the demand. Specially if even by then people do not realize that their existing cars has depreciated a fair buck. There will be lot of good deals then, shop around.

In the mean time certain importers provide a similar service as the scenario quoted by you. Help you to import a car through their suppliers. You make all the payments at the appropriate time i.e. opening L/C, duty/tax payments etc. You have the advantage of having a direct link to the supplier through the importer. So if something is not right there’s someone in LS you can track down and beat up. PM me if you are interested

xXx · June 20, 2010

i think i saw only 2.2 mil quoted for 1.0 L belta!!!

machang did you actually see the car? has it landed is SL???? or is it similar to the prices quoted earlier that seems to come with a small print that more or less say the actual price will be higher.

On a sidenote how fuel efficient will the 1L Belta be? taking the size of the car into consideration wouldn't the engine be tad under powered?

Edited June 20, 2010 by xXx

xXx · June 20, 2010

The problem with importing private from europe is the shipping cost.
As far as I found it out, hardly any ship carries cars 'Roll on Roll'(RORO) to SL due to low volume and risk. So you have to order a dedicated 20ft container for the car, which can cost about 3000USD. When you add this to FOB value to get CIF and calculate TAX on top of that it amounts to about 4000USD only tax(on shipping).

So altogether you pay 7000USD(more than 7 lakhs) only for shipping! From Japan this should be less than 3000USD normally.(Shipping+TAX on shipping)

The solution I could think of at the moment is to order a 40ft container and pack 3-4 cars in it(depending on the size of the cars). You need experience for this.

Then again this is only useful if you import several cars.

Well There are few other problems in importing cars from European market. One is that if you want to bring the Japanese makes, the models in Europe are very different from ones you could see here. Secondly the CIF value of the many European cars are much higher than Japanese ones. Thirdly I do not think many European brands are cost effective options for local usage as the running cost is higher (Parts and FC) and the secondhand market is very dull. Shipping is another issue. I really explored this as I was eligible for a blue permit. But the car would have been "sada oba mage" considering all the costs involved.

Very good points guys. There's a logical reason why cars are only imported form SL and Singa. Yes these car sales importers may not have university degrees or even A/L's. But what they have is lot of street sense and years and years of experience.

Remember in early 2000 lot of European makes and models made their way to SL form UK. What happen to them? Luckily since the taxes kept going up they have market value. How many times in this forum people have suggest to buy a brand new import when hunting for a euro car. People who think they know how to beat the market by all means go ahead put your money where your mouth is. In couple of years we'll see if you actually managed to beat the system.

xXx · June 20, 2010

ZUL did you sell your W220? This definitely is the right time to hunt down a CLS (if i rememebr right that is what you are after right?).

D*MO is taking orders for W212, cost in the 15mill region not too long ago they were quoting 28mil. Similar pricing for the E60. If you want a more jap option L200 (YOM 08) will be in the same region if not slightly cheaper.

Gummy any ideas how much a Disco 3/4, L322 will be sold for?

L board · June 21, 2010

I can see that some people are of the theory that the second hand market of vehicles will not go down specially in the Rs 2M bracket because there are no vehicles you can import for that price. Would one of you holding this theory explain how the second hand market goes up when the taxes are increased? For example the price of an eg8 was between 500k-600k in 1999/2000 and each time there was a tax increase the prices of these went up and ended up near 1M range. Similarly KE72s which fetched only Rs200k-Rs250k ended up Rs400k+. Would one of you experts explain how that happened? Was import tax imposed on the second hand market too for the prices to go up?

Also for those who say they will cling on to their old vehicles without selling them at a lost (and think because of that the second hand market will not drop), best of luck! So now people have stopped selling second hand vehicles ya? Buyers are now unable to find second hand vehicles?? Please help me to stop laughing

For example, the sellers who still quote 3.5M for their 9 year old Corolla 121 can cling on to them for ever while we import Axio 141s for the same price

L board · June 21, 2010

there are maruti's, yes lots of them but most personal buyers do prefer pay over 1.0 million and buy an AE100 than going for brand new maruti with warranty. Still the majority wants to stay away from maruti's, i mean not companies, rent-a-car fleets but personal buyers.

Hashana I checked with A*W on last Friday and they said that since the tax reduction was declared, they have got 1600 orders for Marutis. The buyers also have to wait in a long waiting list. You may check with them. I am telling this because you at least understood what I was talking about (not to say Maruti is better or worse than X, Y or Z) and you answered very professionally while there were some other jokers who went completely out of context.

Edited June 21, 2010 by L board

charitha19 · June 21, 2010

I can see that some people are of the theory that the second hand market of vehicles will not go down specially in the Rs 2M bracket because there are no vehicles you can import for that price. Would one of you holding this theory explain how the second hand market goes up when the taxes are increased? For example the price of an eg8 was between 500k-600k in 1999/2000 and each time there was a tax increase the prices of these went up and ended up near 1M range. Similarly KE72s which fetched only Rs200k-Rs250k ended up Rs400k+. Would one of you experts explain how that happened? Was import tax imposed on the second hand market too for the prices to go up?
Also for those who say they will cling on to their old vehicles without selling them at a lost (and think because of that the second hand market will not drop), best of luck! So now people have stopped selling second hand vehicles ya? Buyers are now unable to find second hand vehicles?? Please help me to stop laughing

For example, the sellers who still quote 3.5M for their 9 year old Corolla 121 can cling on to them for ever while we import Axio 141s for the same price

very valid point. but for people like us. even with a lease i would still have to settle for a registred vehicle. thats the reality.. none of these price cuts are going to bring an unregitered car below 2M unless i go for a maruti or something.. i dont think so....

but as i said the newer 121's and others will get a massive hit.. and those owners will defa have to settle for a very low price if they are adamant about selling thier car.

as for the 2nd had market increasing when new taxes are added. is becuase the owners know with the gap increasing between the registered and unregistered market. they can also increase thier margins.

Edited June 21, 2010 by charitha19

L board · June 21, 2010

very valid point. but for people like us. even with a lease i would still have to settle for a registred vehicle. thats the reality.. none of these price cuts are going to bring an unregitered car below 2M unless i go for a maruti or something.. i dont think so....
but as i said the newer 121's and others will get a massive hit.. and those owners will defa have to settle for a very low price if they are adamant about selling thier car.

Yes so the 121 sellers will have to sell them between 1.8-2.2M for buyers to see it as an attractive option (Dont forget the Belta is there too and we are yet to see the Nissan Sunnys and other options such as the beautiful Elantra). When 121 goes for that price the AE110 would only fetch 1.1M-1.4M and then the AE100 will also be hit accordingly. So you know what I mean? This tax cut has a "Knock on" or "Ripple" effect across the market. That is how the entire second hand market will come down. Similarly, it goes up with tax increases. (NOTE: For all the readers the above figures were given only to illustrate the point. Now please don't start to argue that 121 will be more than 2.2M and such).

lasi · June 21, 2010

Yes so the 121 sellers will have to sell them between 1.8-2.2M for buyers to see it as an attractive option (Dont forget the Belta is there too and we are yet to see the Nissan Sunnys and other options such as the beautiful Elantra). When 121 goes for that price the AE110 would only fetch 1.1M-1.4M and then the AE100 will also be hit accordingly. So you know what I mean? This tax cut has a "Knock on" or "Ripple" effect across the market. That is how the entire second hand market will come down. Similarly, it goes up with tax increases. (NOTE: For all the readers the above figures were given only to illustrate the point. Now please don't start to argue that 121 will be more than 2.2M and such).

+1 There can not be any reason to prevents the principle that applies when tax increase to act vice-versa. (Yes. people are reluctent to reduce their price. Thats a different story) unreg - reg gap will also be affected as same as it happens when tax increased.

L board · June 21, 2010

+1 There can not be any reason to prevents the principle that applies when tax increase to act vice-versa. (Yes. people are reluctent to reduce their price. Thats a different story) unreg - reg gap will also be affected as same as it happens when tax increased.

I am so glad to see that at least there are a few who are at the same wave length :alc:

harshansenadhir · June 21, 2010

Hashana I checked with A*W on last Friday and they said that since the tax reduction was declared, they have got 1600 orders for Marutis. The buyers also have to wait in a long waiting list. You may check with them. I am telling this because you at least understood what I was talking about (not to say Maruti is better or worse than X, Y or Z) and you answered very professionally while there were some other jokers who went completely out of context.

thanks for the update and yes, as I heard the time lines are now dragged to November if you want to buy a one from A*W. Further, I perfectly understood your reasoning but this pathetic artificially bloated second hand market will resist to this change, and as you pointed out in your previous point, if taxes go up no sooner second hand market will jump up. Also to add further, my neighbour sold his 15 sri KE72 for 525/- on yesterday the very first day it was advertised.

Ripper · June 21, 2010

my neighbour sold his 15 sri KE72 for 525/- on yesterday the very first day it was advertised.

i thought the 2nd hand market crashed?

Z.u.L · June 21, 2010

ZUL did you sell your W220? This definitely is the right time to hunt down a CLS (if i rememebr right that is what you are after right?).
D*MO is taking orders for W212, cost in the 15mill region not too long ago they were quoting 28mil. Similar pricing for the E60. If you want a more jap option L200 (YOM 08) will be in the same region if not slightly cheaper.

Gummy any ideas how much a Disco 3/4, L322 will be sold for?

yep, sold the s320 and yes i sold it some time back before the tax went down so got a good deal on it. yes i am hoping on gettin down a cls, i have to visit the agent to get some info on it, not pretty sure how much it cost now. im thinking about gettin one down my self from uk if the agent is quoting too much.

gettin down some jap vehicles also for daily use. sold all the vehicles except for my 121 corolla diesel, most probably the list would be a mazda axela (mazda 3) 2010 or a 1.8 civic 2008 or 2009 and a luxury car which i still not decided ( mark x, skyline or an accord).

hakjay · June 21, 2010

+1 There can not be any reason to prevents the principle that applies when tax increase to act vice-versa. (Yes. people are reluctent to reduce their price. Thats a different story) unreg - reg gap will also be affected as same as it happens when tax increased.

The correct price for the AE100 should be around 650K max!!!

nissmoz · June 21, 2010

yep, sold the s320 and yes i sold it some time back before the tax went down so got a good deal on it. yes i am hoping on gettin down a cls, i have to visit the agent to get some info on it, not pretty sure how much it cost now. im thinking about gettin one down my self from uk if the agent is quoting too much.
gettin down some jap vehicles also for daily use. sold all the vehicles except for my 121 corolla diesel, most probably the list would be a mazda axela (mazda 3) 2010 or a 1.8 civic 2008 or 2009 and a luxury car which i still not decided ( mark x, skyline or an accord).

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.

Rebel · June 21, 2010

I can see that some people are of the theory that the second hand market of vehicles will not go down specially in the Rs 2M bracket because there are no vehicles you can import for that price. Would one of you holding this theory explain how the second hand market goes up when the taxes are increased? For example the price of an eg8 was between 500k-600k in 1999/2000 and each time there was a tax increase the prices of these went up and ended up near 1M range. Similarly KE72s which fetched only Rs200k-Rs250k ended up Rs400k+. Would one of you experts explain how that happened? Was import tax imposed on the second hand market too for the prices to go up?
Also for those who say they will cling on to their old vehicles without selling them at a lost (and think because of that the second hand market will not drop), best of luck! So now people have stopped selling second hand vehicles ya? Buyers are now unable to find second hand vehicles?? Please help me to stop laughing

For example, the sellers who still quote 3.5M for their 9 year old Corolla 121 can cling on to them for ever while we import Axio 141s for the same price

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!!!

i thought the 2nd hand market crashed?

LOL so we are told,

The correct price for the AE100 should be around 650K max!!!

Let us know when you find the 'one'

Edited June 21, 2010 by Rebel

Devinda_Z · June 21, 2010

ZUL did you sell your W220? This definitely is the right time to hunt down a CLS (if i rememebr right that is what you are after right?).
D*MO is taking orders for W212, cost in the 15mill region not too long ago they were quoting 28mil. Similar pricing for the E60. If you want a more jap option L200 (YOM 08) will be in the same region if not slightly cheaper.

Gummy any ideas how much a Disco 3/4, L322 will be sold for?

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