The Vehicle Importers Association of Sri Lanka is urging the Government to formulate an annual import plan for the industry after the country is open for business following the Covid 19 pandemic.
According to the President of the Association, Indika Sampath Merenchige vehicle imports will have to eventually re-commence as almost 80 percent of the imported vehicles in the country will be sold out within the next three months. “Already the popular vehicle models have been sold out,” he said. But Merenchige said the Government should introduce regulations, licensing and policies to regulate vehicle imports to the country after the limitations on imports are lifted. Unregulated vehicle imports have resulted in the reduction of the country’s foreign reserves according to economic experts. “Therefore, this is how the economy and the industry can be developed,” he said, adding that the import plan should be formulated in consultation with importers and Customs officials.
While the Government has temporarily halted the import of vehicles to halt the outflow of foreign exchange, the vehicle import industry has taken a severe hit. According to Merenchige, the industry, like it or not, must accept the decision of the Government due to the current situation. He said that despite the hardship, this is an opportunity for the country to go towards a manufacturing economy. He said that for example, manufacturing vehicles for local use alone will not be practical. Merenchige suggested that setting up a vehicle assembly plant for export will be beneficial to Sri Lanka. “Our industry can also purchase these vehicles to be sold locally,” he said which will in turn further help to reduce imports. Admitting that the industry has taken a severe hit due to Covid-9, Merenchige said as a short term plan for survival many importers are attempting to sell all the vehicles that have been imported. With no long term plan formulated for the industry yet, he said it will have to be revived. “Perhaps our international connections can be used to help us to move to different types of imports,” he said. According to Merenchige, 750 importers, 4,000 people working as vehicle sellers and others connected to the industry now face severe hardships. “Nearly 25,000 persons involved in the industry directly and indirectly are at risk,” he said. Issuing a statement last week, the Ceylon Motor Traders Association (CMTA) also urged the Government to provide a clear direction on the period of the import suspension and emphasised the need to regulate automotive imports to legitimate importers who have been vetted by the Government.
Chairman of the CMTA, Yasendra Amerasinghe said the vehicle import ban has adversely impacted thousands of Sri Lankans and it is the responsibility of the Government to communicate clearly as to when it will be lifted so that businesses and citizens can plan ahead. “In addition to the lifting of the ban, the other key issue is for the Government to introduce proper regulations to take the industry to the next level,” Amerasinghe said.
He reiterated that the complete suspension of all vehicle imports has caused great hardship to the entire industry. The Association has called on the Government to provide support to the industry so that it can sustain its employees and overheads as importers will soon have no stocks and no income from vehicle sales.
The CMTA said understanding the challenges faced by the country’s economy and foreign reserves its members are trying their best to minimise salary reductions and job cuts. “But the member companies and their dealers will have no option but to take drastic action to survive as there is no clear direction to plan otherwise,” the release noted.