- Over 60% of vehicle dealerships closed
The Government will consider a relaxation of the vehicle import ban only if the general public takes to the streets in protest against vehicle import restrictions, according to Co-Cabinet Spokesman Minister Dr. Ramesh Pathirana.
“If the general public gets on the road, protesting for new vehicles to be imported, then we might think about it. But for now, our concern is protecting our reserves,” he said on Thursday (8).
The Minister added that even if the vehicle importers have run out unregistered stocks, they could still keep the businesses going in terms of the second-hand vehicle market.
He stated this responding to a query by The Sunday Morning Business about the stance of the Government on the fact that over 60% of vehicle dealerships have closed down their showrooms and there are only about 1,000 vehicles at showrooms islandwide at the moment.
These figures were revealed to us by Vehicle Importers’ Association Lanka (VIAL) President Indika Sampath Merenchige who charged that much of the industry has already gone out of business due to the prevailing stringent restrictions on vehicle imports. He added that the rest of the dealerships too will join the exit queue soon.
“Even though the Government said there is enough of a vehicle stock for more than two years, at the moment there are only about 1,000 vehicles at showrooms islandwide. After selling these vehicles, all vehicle dealerships have to shut down their business,” Merenchige stated.
The permanent closure of vehicle dealerships has been doubled within the past month, as in early September, the VIAL noted that only 25% of the vehicle dealerships closed down as they sold out their stocks.
However, Dr. Pathirana maintained that the Government does not see a dire need to import vehicles at the moment, as unregistered vehicles could be seen idling at dealerships.
“We understand the plight of vehicle importers, but these import restrictions are not only for them, it is for all importers in the country. Moreover, there are still enough vehicles at vehicle showrooms,” Dr. Pathirana added.
On a further note, he stated that even if vehicle importers have run out unregistered stocks, they could still keep the businesses going in terms of the second-hand vehicle market.
The Minister added that the Government is yet to look at an alternative option for vehicle importers.
Speaking to us in September, Merenchige expressed his dissatisfaction over the way the vehicle industry is being treated by the Government, despite the colossal sum of tax revenue the Government made through vehicle imports.
Debt moratoriums and financial relief packages that were announced following the Easter Sunday incident last year were not made available to the vehicle industry, even though the industry has been facing a financially tough period since late 2018.
Exacerbating the industry’s misery, the Government restricted imports following the local spread of Covid-19 in mid-March this year in order to avoid a possible foreign exchange crisis amidst a crippled global and national economy.
Even though the initial ban on vehicle imports was imposed only as a short-term measure, the Government later on announced that vehicle imports would be restricted for another two years. They also ruled out a possible vehicle shortage by stating that the country has enough vehicles in stock for the next two years.
In 2019, Sri Lanka spent about $ 815.7 million on vehicle imports, compared to $ 1.5 billion the previous year. In August, the Central Bank of Sri Lanka stated that expenditure on motor vehicle imports declined by 80.9% due to the import restriction measures taken by the Government and the Central Bank since March 2020.