Vehicle numbers

ONE easy way to assess lopsided development is to note the numbers of vehicle sales in Sri Lanka. Recent numbers have shown that while most people dream of owning a vehicle, repeated tax increases by the Government and a biased permit system leave the middle and low income classes in the cold.  

Sri Lanka’s motor car registrations fell 75 per cent to 1,072 in September 2012 from a year earlier, while total registrations had fallen 45 per cent to 24,478 data analysed by JB Securities, a stock brokerage, has shown.

An analysis of data from Sri Lanka’s motor vehicle registry had shown that brand new cars were 75.4% to 643 and used or reconditioned cars were down 75.3 percent to 429 in September. However, luxury Mercedes, BMW, and Audi cars rose 7% to 88 units in September 2012 from a year earlier.

Evidence of this can be seen plying the streets of Colombo and many of these and SUVs are bought on permits that deny average consumers the chance to own their own vehicles and also open room for massive corruption and loss of tax revenue to the country.  

Some car importers had sought permission from the State to export vehicles already bought into the country and the industry is trying to break into the Myanmar market in an effort to keep their heads above water. In a country that has 20 million people, it is unfortunate that the Government prefers to give politicians and public workers preferential treatment while essentially freezing out the chance for lower income groups to own a mode of conveyance.

Total new vehicle registrations, which include motorcycles, three-wheelers, and trucks, fell 45.3% to 24,478, while cheaper used vehicle sales fell at a faster 56.8% to 1,928. These are mostly used as income earners by low or average income households and there is clearly grave need to come up with a formula to assist these people.

Registrations of Maruti Alto, a small Indian made car and Sri Lanka’s best-selling model, at one time fell 94 per cent to just 45 units from 804 a year earlier. Registrations of motor cycles fell 51 per cent to 11,922 in September, and biggest fall seen in absolute terms was in the smallest motorcycles used by the least well-off people.

Motorcycles of engine capacity of 100 cubic centimetres or below fell by 7,541 units to 5,347. The taxes by midnight gazette in April came just as female citizens were starting to buy small scooters, improving their mobility and freedom.

Analysts have pointed out that import duties, including nationalist taxes to protect big businessmen and producers close to the ruling elite, work by hurting the poorest sections of citizenry most. Vehicle industry representatives recently appealed to Treasury Secretary Dr. P.B. Jayasundera to include a fair mechanism in the upcoming Budget to provide more equitable access of vehicle to the population. Yet it is unlikely that this appeal will have any positive results.  

The permit system was seen to create a lopsided playing field, with the rich and politically connected using them to buy luxury vehicles, while the average person has to pay through their nose for even a basic car. The Finance Ministry released millions in funds for public departments to purchase vehicles using public funds, but does little to assist the masses. With comfort in public transport being almost nonexistent, the unfair system will continue to be a bane for a long time to come.