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Vehicle prices surge by over 50%

15 Aug 2021

By Dinitha Rathnayake The prices of reconditioned vehicles have increased substantially – in some cases by over 50% – according to the Vehicle Importers’ Association of Sri Lanka (VIASL). Speaking to The Morning, VIASL President Indika Sampath Merenchige confirmed a massive rise in the prices of reconditioned vehicles. “Maruti Suzuki Wagon R prices in 2018 were around Rs. 3.5 million; the current market price is Rs. 6 million. Jeep models are in the price range of Rs. 15-20 million. All non-popular vehicle prices have increased by 25%”. He added that this price increase affects the economy adversely. “The Government should hold a discussion with the relevant stakeholders before making a decision. This rapid increase of vehicle prices has a bad impact on the economy as well. 75% of the vehicle dealers have closed down, and most sales are now done by third parties who do buying and selling.” As per Gazette Extraordinary Notification No. 2176/19, dated 22 May 2020, which was published to amend the regulations that was stipulated by Gazette Extraordinary Notification No. 2171/5, dated 16 April 2020, strict restrictions were placed on vehicle imports, in a bid to curb foreign exchange outflows amidst the Covid-19 pandemic. Following the ban on vehicle imports, the VIASL was asked to draft a plan that would not put pressure on the currency and safeguard foreign exchange reserves in the event of the importation of vehicles. The VIASL then requested the Government to allow it a certain quota of vehicle imports per annum as a compromise, with the aim of not driving importers out of business, while also not completely draining the Government’s coffers of valuable foreign exchange. However, this is yet to be met with a positive response. Meanwhile, it was reported that the Government has decided to continue its ban on imports of vehicles for the next year as well, and has issued strict guidelines to all ministries on the preparation of their allocations for the 2022 Budget to be presented in November.  


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