Sri Lanka vehicle registrations down in June 2019

Jul 22, 2019 (LBO) - Sri Lanka's vehicle registrations across most categories have declined in June relative to May, a new report shows.

Data compiled by JB Securities equities research shows a drop in 2-wheeler registrations have driven down the total to 26,201 the lowest on record over the past 36 months.

The slowdown and specifically the sharp decline in 2-wheeler and mini truck segments are probably due to the following:

• Resale of repossessed registered vehicles emanating from rising NPLs crowding out the unregistered market.
• Focus of credit providers in collections rather than extending new credits.
• Low consumer and business confidence due to the fallout of the Easter Sunday bombings and subsequent communal unrest.

In most categories there is a lag of around 30 days between the date of imports and registration. The budget estimate is for LKR 240 bn in taxes from this sector, if the current run rate continues the treasury will struggle to even get 60% of this figure, i.e. a miss of LKR 96 bn.

• Total car registrations recorded 1,580 units in June down from 1,816 units in May and significantly down from 6,819 units 12 months ago.
• Brand new cars recorded 222 units in June down from 291 units in May and 992 units 12 months ago. Small cars accounted for bulk of them recording 185 units (83%). Imports from India and Japan accounted for 45% and 41% of units, respectively. Financing share was 50% in line with the normal monthly average.
• Preowned cars recorded 1,358 units in June down from 1,525 units in May and significantly down from 5,827 units 12 months ago. Small cars accounted for bulk of them recording 1,303 units (96%). Toyota was the segment leader accounting for 832 units (61%) – Vitz 734 units followed by Suzuki with 324 units (24%) – Wagon R 180 units. Imports from Japan account for 99% of volumes. Financing share was 55% in line with the normal monthly average.
• Premium brands recorded 66 units in June down from 93 units in May and significantly down from 227 units 12 months ago. New cars accounted for 66 units – Mercedes Benz recorded 28 units – C class 23 units. Preowned cars recorded 35 units – Mercedes Benz 7 units – C class 6, BMW 6 units – 3-series 4 units and Audi 22 units – A1 16 units, A3 5 units.

Under notable premium car registrations there is a Lamborghini Avantandor SV – it may have been imported into the country sometime back and only registered recently.

• Electric cars recorded 7 units in June up from 6 units in May but marginally down from 10 units 12 months ago. Nissan Leaf accounted for 6 of these units.
• SUV registrations recorded 289 units in June down from 303 units in May and significantly down from 637 units 12 months ago. Brand new accounted for 160 units and the balance 129 units were preowned. Small crossovers (engine < 1,500cc) accounted for 266 units (92% share). MG which is a crossover and an affordable vehicle accounted for 84 units followed by Toyota with 38, Mitsubishi with 31 units and Honda with 28 units. In the premium SUV segment Range Rover accounted for 12 units – Sports 9, Audi 26 – Q2 23 and BMW 5 units. Financing share was 52.6% higher than the normal monthly average.
• Hybrids recorded 340 units in June down from 458 units in May and significantly down from 3,638 units 12 months ago. Motor cars accounted for 328 units down from 431 units the previous month. Suzuki accounted for the bulk of them recording 284 units (86.5%). SUVs recorded 11 units and Vans 1 unit.
• Van registrations recorded 480 units in June marginally up from 464 units in May and significantly down from 665 units 12 months ago. Mini vans accounted for 419 units and the balance 61 units were mid-size vans. Preowned units dominate this category accounting for 99% of units. Suzuki claims a category share of 56%. Imports from Japan account for almost 100% of units. Financing share was 68% in line with the normal monthly average.
• 3-wheeler registrations recorded 821 units in June marginally down from 892 units in May and significantly down from 2,050 units 12 months ago. Bajaj maintained its category leadership with a 93% share. Financing share was 70% in line with the normal monthly average.
• 2-wheeler registrations posted a record low of 21,416 units in June relative to 27,508 units in May and 26,175 units 12 months ago. One must go back 58 months to August 2014 to get a comparative monthly figure indicative of the extreme slowdown. Scooters accounted for 14,395 units down from 18,244 units the previous month – they accounted for 67% of total volumes. Honda remained the segment leader with a reduced share of 47.5% followed by Yamaha with 12.4% and TVS with 10.5%. In the overall category share Honda leads with 44% followed by Yamaha with 19.7%, TVS with 13% and Bajaj with 11.7%. Financing share was 74.2% in line with the normal monthly average.
• Pickup trucks recorded 53 units in June marginally down from 58 units in May and significantly down from 171 units 12 months ago. Tata is the category leader with a 53% share. Financing share was 73.5% above the normal monthly average that is between 50-60%.
• Mini trucks recorded 99 units in June down from 136 units in May and significantly down from 394 units 12 months ago. Tata maintained its dominance with an 81% share. Imports from India accounted for 85% of units. Financing share at 78% is slightly down from the normal monthly average of 82%.

This segment is predominantly dominated by the ubiquitous Tata Ace mini truck also known as the Dimo batta – it is the workhorse of the farming, fishing, tradesman, small shop owner and mobile retailer community. As a point of reference, the registrations in this segment in Nov 2016 were 1,520, its down to 99 units last month.

• Light trucks recorded 156 units in June down from 205 units in May and significantly down from 298 units 12 months ago. Mahindra maintained its dominant leadership of the segment with a 79% share. Imports from India accounted for 79% of units Financing share was 85.3% in line with the normal monthly average.
• Medium trucks recorded 168 units in June up from 139 units in May and 300 units 12 months ago. Brand new units recorded 63 units and the balance 105 units were pre-owned. Tippers accounted for 12 units. Isuzu continued to be the segment leader with a 60% share. Imports from Japan accounted for 77% of units. Financing share was 78% in line with the normal monthly average.
• Heavy truck registrations recorded 81 units in June down from 105 units in May and 248 units 12 months ago. Tippers recorded 30 units in June down from 41 units the previous month. The segment leader continued to be Tata with a 54% share.
• Bus registrations recorded 40 units in June down from 66 units in May and significantly down from 177 units 12 months ago. As a point of reference in the 2H of 2017 bus registrations were around 300 units a month. Imports from India accounted for 83% of units. Financing share was 82.5% in line with the normal monthly average.
• Hand tractor registrations recorded 134 units in June down from 159 units the previous month and 186 units 12 months ago. Thailand accounted for 57% in terms of country of origin. Financing share was 83% in line with the normal monthly average.
• Large tractor registrations recorded 182 units in June significantly down from 310 units in May and 387 units 12 months ago. Tafe continued to be the market leader with a 38% share. India accounted for 90% in terms of country of origin. Financing share was 83% in line with the normal monthly average.