News

Recon vehicle prices to soar 

  • VIASL bemoans lack of budgetary lifeline 

BY Dinitha Rathnayake 

The prices of reconditioned vehicles would increase in the coming weeks due to the latest budget proposals, according to the Vehicle Importers’ Association of Sri Lanka (VIASL).

Speaking to The Morning, VIASL President Indika Sampath Merenchige said that vehicle importers were looking for a lifeline from the 2022 Budget. “It is a fact that vehicle prices have drastically increased over the last few months. Although the VIASL believed that this is mainly due to the economics of demand and supply, it is evident that individuals from various other industries have entered the market of buying and selling used vehicles. The 2022 Budget did not add any value in our favour. We would face the same problems as we did earlier. The prices of vehicles would be decided on supply and demand. We don’t know about the economic situation of the public,” Merenchige added.

The prices of reconditioned vehicles increased substantially in some cases by over 50% recently. “The Maruti Suzuki Wagon R price in 2018 was around Rs. 3.5 million but recently the market price was Rs. 6 million. Jeep models were at a price range of Rs. 15 million to Rs. 20 million. All non-popular vehicle prices increased by 25%”.

He added at the time that while this price increase affects the economy adversely, since the prices are however now settled, this would be the best time to buy a vehicle.

“The rapid increase of vehicle prices had a bad impact on our economy as well because 75% of the vehicle dealers have closed down, and most sales are now done by third parties who are buying and selling.”

Meanwhile, according to Finance Minister Basil Rajapaksa, Sri Lanka will release around 700 vehicles which have been seized by Customs after the applicable taxes are paid. “They have been stuck over several years,” Rajapaksa told the Parliament. “Some of them are rotting away. There are about 700 such vehicles.” Rajapaksa said that Customs had seized them for the non-payment of taxes as well as for other reasons.

Sri Lanka has banned vehicle imports due to a foreign exchange crisis and second-hand car prices have soared amidst low interest rates.