Motor car registrations surge in March

„March pre-owned car registrations only second to record set in September 2015 „Kei cars lead the pack; March sees registration of 41,824 vehicles

Sri Lanka’s motor car registrations in March rose sharply with pre-owned or reconditioned cars hitting a record since September 2015 when the vehicle imports reached an alltime high after the Central Bank printed money to keep bank credit cheaper, so that everyone could have a vehicle of their own.

According to the vehicle registrations data compiled by JB Securities, Sri Lanka has registered 5,968 motor cars in March, a significant increase from 4, 799 units in February and doubling the 2,879 units recorded 12 months ago.

Out of the total motor cars, 4,917 units were pre-owned car registrations, up from 4, 029 units in February and much higher than the 1,943 units 12 months ago.

“Last month’s registrations were second to the record set in September 2015 of 5,117 units on pre-owned cars. Suzuki recorded 2,835 units – mainly Wagon R— distantly followed by Toyota recording 1,314 units – mainly Vitz”, said JB Securities Managing Director Murtaza Jafferjee.

Meanwhile, March saw 1,051 brand new car registrations, significantly up from 770 units in February and slightly up from 936 units 12 months ago.

Again Wagon Rs with a 660 CC hybrid engine led the pack with 418 units while there were only 17 Maruti Altos.

“…as a point of reference in September 2015, there were 7,556 units registered – another case of how government policy can tilt the playing field so precipitously”, Jafferjee noted.

Under the unit method of duty, the taxes on a 660 cc hybrid engine found on most Japanese small cars is Rs. 825,000 while the tax on a 800 cc Alto is Rs.1.4 million, although the landed price of the former is probably 50 percent less, he added.

Sri Lanka brought in a raft of measures from higher interest rates, loan-to-value ratios and higher duties when the country’s economy buckled due to a combination of narrow-minded monetary and fiscal policies instituted by the coalition regime in 2015.

Cheap credit flew into importing vehicles which flooded the already congested roads creating a multitude of socio-economic problems for the country, which is already grappling with issues such as higher fuel import bills and lower productivity.

Though Central Bank Governor Dr. Indrajit Coomaraswamy put the brakes on the excessive monetary expansion from mid 2016 through higher rates and macro-prudential measures, those actions have had limited impact on vehicle registrations, albeit it has slowed down imports significantly from the 2015 peak.

In total, Sri Lanka registered 41,824 vehicles in March, up from 38,003 vehicles in February and 39, 257 units 12 months ago.

The current pace of monthly vehicle registrations is unsustainable for Sri Lanka—a country with a limited road network and a net importer of oil.

Already the road accidents and casualties have reached a record high.

Singapore government in February cut the annual growth rate for cars and motorcycles to zero from 0.25 percent in view of land constraints for further expansion of the road network.

Meanwhile, there were 249 premium branded vehicles registered in March, significantly up from 188 units in February and almost four times the growth from 66 units 12 months ago.

Sports Utility Vehicles (SUVS) recorded 470 units in March, marginally up from 464 units in February and down from 504 units 12 months ago. Toyota was the segment leader accounting for 222 units comprising of 151 of C-HR units.

Electric cars recorded 14 units in March significantly down from 27 units in February and 31 units 12 months ago. Of the 14 units, Nissan Leaf accounted for 13 of them – all of them were the first generation models.

Meanwhile, three-wheelers recorded 1,525 units in March marginally up from 1,471 units in February and an increase from 1,299 units 12 months ago.

“Nevertheless, this number is significantly lower than the normal 6, 000-10,000 units recorded prior to the directive on loan to value ratio and higher tariffs. Bajaj yet retains its absolute dominance of the segment with a 91.7 percent share”, said Jafferjee.

The two-wheelers recorded 29,957 units in March, up from 27,428 units in February but down from 31, 029 units 12 months ago.

“Scooters drove the increase recording 18,128 units and a segment share of 60.5 percent”, he added.

Honda claimed a 57.6 percent share in scooters followed by Yamaha with 20.1 percent, TVS was a distant third with 11.8 percent followed by Hero with a 9.4 percent share.

However, in the overall two-wheel category Honda claimed a share of 38.8 percent, Yamaha with a share of 19.7 percent has unseated Bajaj (16.9 percent) for the second place.