Total motor vehicle registrations of 2020, hit the lowest for the last decade and even lower than the registrations recorded in 2009 when the world experienced the global financial crisis, a new report highlighted.
Motor Vehicle Industry Report released by the Economic Intelligence Unit of the Ceylon Chamber of Commerce covering key trends in 2019 and 2020, further shows that due to the fall in imports, there was a 45% drop in motor vehicle new registrations.
The report highlights that both 2019 and 2020 were challenging years for Sri Lanka’s motor vehicle industry due to import restrictions. Imports of motor vehicles recorded a notable decline during the last two years, after experiencing significant growth in 2018.
Since the importation of motor vehicles into Sri Lanka takes a significant portion of the total import bill of the country (3% in 2020), the reduction in motor vehicle imports contributed largely to the narrowing of the trade deficit.
Accordingly, the trade deficit contracted notably by around USD 2 Bn in 2020 and this contraction was significantly contributed by the lowered motor vehicle imports during the year.
The decline in motor vehicle imports, however, resulted in a loss of revenue to the government mainly due to the fall in the collection of excise duty and luxury tax.
The report features the latest information on the economic contribution of the industry, motor vehicle registration, ownership transfers, population, imports of motor vehicles (a detailed analysis by vehicle category and HS code), issuance of driving licenses, recent regulatory developments, the way forward and global motor vehicle industry.