July vehicle registrations dive to lowest in 2016

Sri Lanka’s vehicle registrations in almost all categories except buses and heavy trucks have taken a dive in July, recording the lowest monthly figure for the year, a monthly vehicle registration tracker by a leading Colombo-based stock brokerage showed.

The total number of vehicles registered during July was down to 35,629 from 44,589 in June, yet the number still remains high due to the poor state of the country’s public transport system.

According to JB Securities (Pvt.) Limited, the motor car registrations have come down to 2,489 units in July from 3,026 units in June and significantly lowered from 9,736 units recorded in the same month last year. Last year’s vehicle registrations reached an all-time high as the policymakers who sought re-election gave fiscal and monetary stimulus to the public to spend lavishly in a myopic move,

destroying the currency and plunging the economy into a balance of payment crisis.

The country then had to be bailed out by the International Monetary Fund, which gave its first tranche in June of its US $ 1.5 billion three-year extended fund facility.

In 2015, the aspirational middle-income earning class imported whopping 658,241 vehicles, out of which 94,727 units composed of motorcars, partly due to the Rs.10,000 salary increment offered to the 1.4 million public sector employees.

During the first seven months of this year, 267,025 vehicles were imported, of which 21,890 were motorcars.

During July, there were 1,331 brand-new cars registered, of which half or 663 were Maruti Altos.

“Maruti that had a total dominant market in the less than 1,000 cc segment is seeing high competition from the relatively new arrivals backed by major brands Hyundai Eon and Renault Kwid,” said JB Securities Managing Director Murtaza Jafferjee.

Pre-owned cars had 1,158 units, led by Toyota Axio and Aqua, followed by Suzuki Wagon R and Honda Grace and Fit.

Premium brands were up from 64 units to 87 units in a month. There were 36 Mercedes, 15 BMWS and 14 units of Audi.

Electric car registrations, down from 71 units to 64 units, mainly consisted of 59 units of Nissan Leaf.

Sports utility vehicles (SUVS) were down to 414 units from 631 units in June.

Three-wheel registrations at last were down to 3,678 units from 6,995 units seen a month ago and 12,248 units a year ago.

Bajaj claimed a share of 87.1 percent, followed by TVS with 9.2 percent and Piaggio with 3.6 percent.

In 2015, 128,911 three-wheelers were registered while during the first seven months this year another 31,010 units were registered.

The three-wheel industry has been cited as one of the reasons for the country’s dearth of labour as less educated youth tend to get into easy three-wheel driving job to make a living by ripping off the commuter and develop no skill thereafter to become job ready.

Once they, in hundreds of thousand, move out of the labour force due to aging or a slowdown in the industry with the planned facelift in public transport, the country will face serious socioeconomic issues with no social security net in place.

The registration of two-wheelers was slightly down to 24,994 from 29,264 in June. “Bajaj has reclaimed market leadership recording a market share of 30.7 percent sans scooters closely followed by Honda with 29 percent, Hero recorded 15.2 percent steadily dropping share closely followed by TVS with 14.1 percent,” Jafferjee observed in his note.

There were 179 buses registered against 176 in June and 184 heavy trucks registered against 126 in June.

In the absence of an immediate remedy to curb vehicle imports for consumption purposes, Lankan roads are likely to become almost impassable, creating a loss of financial resources and manpower, which otherwise could be used for productive work.