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Sri Lanka, main destination for used cars from Japan

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Jan 25, 2016 (LBO) – Sri Lanka has set a record as the number one destination for used car exports from Japan in terms of value last year, JB Securities said in a research note.
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“The main reason for the heightened demand for this category of vehicles was aggressive credit extension from commercial banks,” JB Securities said.
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The research firm explained that financing rates came down to around Rs 19,000/month/Rs 1 million from around Rs 25,000/month/Rs 1 million – this increased affordability coupled with an overvalued exchange rate till Sep fuelled a massive increase in demand. “Inclusive of the profit multiplier on excise duty of 15%, total tariffs on petrol cars was 172% and on hybrids was 92%, this was a 80% difference, the CIF value of a hybrid car is only 15% more than a petrol one so there is a net advantage of 65%,” “Hybrid excise rates were increased from 80% to 90% so this advantage comes down to 55% going forward.” JB Securities said.
Country Value (Yen million) Number of Units Unit Value (Yen Million)
Sri Lanka 84,547 48,402 1.75
Malaysia 49,994 19,409 2.58
New Zealand 47,280 102,487 0.46
Kenya 45,751 63,647 0.72
Pakistan 38,396 37,585 1.02
Note – Jan to Nov 2015 Stats Vehicle imports have also set a new record in terms of revenue collection for the treasury. “As per media reports the customs have recorded LKR 229 billion in tax collections in 2015 surpassing the previous record set in 2011 of approximately LKR 134 billion,” JB Securities said. “The amount collected in 2015 is perhaps double that collected in 2014. The treasury is projecting to collect LKR 280 billion in 2016 which is a 22% increase over 2015 and a 140% increase over 2014.”
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