The Ceylon Motor Traders Association (CMTA) is to formulate a future mobility plan for Sri Lanka with the assistance of the Ceylon Chamber of Commerce, World Bank, Asian Development Bank (ADB) and a few internationally-renowned research agencies to develop a sustainable automotive industry in Sri Lanka.
“If we can get the government to accept this plan, it can be a means to hold them accountable to work within a framework created by the industry and industry experts,” CMTA Chairman Sheran Fernando told the 99th Annual General Meeting of the Association in Colombo recently.
CMTA has already initiated discussions with industry groups, the World Bank, the ADB, research agencies and government authorities seeking assistance and input to carry out this task.
“We will be working with the Ceylon Chamber of Commerce and approach international donors to obtain funding for an international consultant who is familiar with future mobility technology, to study the Sri Lankan requirement and make recommendations on how future mobility technology could be adopted,” he said, adding that we are looking to these agencies for financial assistance for the consultancy elements of the plan.
The CMTA is a private sector organisation and we plan to develop our strategy and present it to the government. As the automotive industry faces inevitable disruption stemming from international developments such as ride sharing and driverless cars, he stressed that Sri Lanka cannot lag behind and hence said CMTA decided to initiate the discussions to formulate a long-term mobility plan for the country cementing its role as the voice of the country’s automotive sector.
“For example, when you are talking about driverless cars, there are many elements in the country that need to get in place in order to be ready for the change that is imminent. Speaking of electric cars, we have to set-up charging centres and consider what the regulations are going to be on these charging stations,” he said.
Sri Lanka is facing severe traffic congestion. Public transport has failed to solve the transportation needs of the people and commuters are looking for other modes of transport, such as bikes, trishaws and small cars. Exhaust gas emission is also a challenge. New technology such as shared mobility, driverless electric vehicles could be used as solutions to the public transport problem. Transport is also a capital good that often impacts the efficiency of a manufactured product. Greater transport efficiency will have a wider impact on enhancing the efficiency within the economy.
Fernando urged CMTA membership to get prepared for the looming disruptions which would require re-evaluating their existing business models.
He noted that the end user may not be necessarily their customer moving forward.
Further, it is also anticipated that the disruption would have a noticeable impact on the after sales revenue of CMTA members.
“The state is set for disruptions, you may not like it, but it’s inevitable,” he insisted.
Despite traffic congestion has been identified as a key issue by the government, Fernando lamented that the country’s road network has not expanded during past two-three years with infrastructure projects being postponed.
However, the projects funded by the World Bank, ADB and the Millennium Challenge Corporation (MCC) are expected to reduce traffic congestion while expanding the road network.
“The ADB is funding the building of roads and development of public transport. The MCC is putting US $200 million into traffic management which should begin this year. The World Bank is very much interested in the activation of automotive space; they are looking at public-private partnerships with focus very much on public transport,” he said.
The CMTA expects that this initiative will create the much-needed alignment among international developments, government policies, and increased duties on vehicle imports and unpredictable regulatory environment.
CMTA has predicted a bleak outlook for vehicle imports during next two years, driven mainly by an economic slowdown.
Amidst sluggish economic outlook, Fernando expects the government to limit foreign exchange used to import vehicles.
“Probably for next two years, the government is not going to have too much funds to support the import of cars. It’s a sad reality and it’s a reality that we have contended with for the past 15 years. It’s going to be another difficult period,” he stressed. The industry has already been impacted by tepid consumer demand due to the economic slowdown.
Fernando noted that 2018/2019 has been a very challenging period compared to previous years and the prevalent political uncertainty further worsens market sentiments.