‘Consistent tax policies vital for vibrant motor industry’ | Sunday Observer

‘Consistent tax policies vital for vibrant motor industry’

 Kia Motors (Lanka) Limited Managing Director Mahen Thambiah with the ‘Kia Niro’. Pic: Vipula Amerasinghe
Kia Motors (Lanka) Limited Managing Director Mahen Thambiah with the ‘Kia Niro’. Pic: Vipula Amerasinghe

Sri Lanka’s vehicle industry needs a consistent tax policy and environmental safety measures for a vibrant motor industry in the country, an essential comportment of the economy, said Kia Motors (Lanka) Limited Managing Director Mahen Thambiah at the launch of ‘Kia Niro’, a pure hybrid car to the local market last week.

He said vehicles sales had dropped by around 70 percent during the past one and half years to two years due to the shift from value based to unit based tax system.

“We did not introduced new models during this period due to the unfavourable tax system where the full impact of it could be seen after March next year up to which time the tax system will be in force,” Thambiah said adding that the company recorded sales of around 200 units last year and expects the same this year.

While recognising the need to harmonise environmental concerns with the motor trade he said priority should be given to minimise pollution through policy measures.

“Going in for electric vehicles is a good move to address environmental issues but Sri Lanka is not yet ready for it as the infrastructure is not in place to cater to the category of vehicles,” Thambiah said, adding that sooner or later the country must move into electric vehicles in line with the global trend.

He said the local motor industry still follows Euro 4 emission standards when other countries have moved in to Euro 6 and 7 standards.

“As a motor trader we have lobbied for better emission standards and pure hybrid vehicles that are conducive to the country,” Thambiah said.

However, motor traders are yet jittery over the exorbitantly high taxation that has made purchasing even a small vehicle unaffordable to many.

The import tax on small vehicles and a tax system for luxury vehicles were introduced in the 2019 Budget increasing the import tax of on petrol vehicles under 800 CC by Rs. 150,000 and petrol vehicles under 1000 CC by Rs. 175,000.

New vehicles registrations have been low in recent years due to the high taxes slapped across all categories of vehicles other than electric vehicles which the government has been promoting as an alternative to fuel powered vehicles to minimize pollution.

Named Green Car Journal’s 2018 ‘Green Car of the year’ the Kia Niro offers the practicality and curb –side appeal of a spacious SUV with high fuel efficiency of an advanced hybrid power train.

“Unlike the mild hybrids in the market, Kia Niro is a pure hybrid where its lithium ion polymer battery pack and 32KW electric motor propel the wheels through a six-speed double clutch gear box,” Thambiah said.

Niro is equipped with a specially designed innovative hybrid system to provide a more dynamic and engaging driving experience.

“The launch of Niro in Sri Lanka heralds an exciting new phase in Kia’s progress in the local market just as it has redefined the brand’s values in Europe and other global markets where performance must be delivered economically and sustainably,” he said.

- LF