Quota for vehicle imports, key to regulate market - Past CMTA chairman | Sunday Observer

Quota for vehicle imports, key to regulate market - Past CMTA chairman

20 September, 2020

A quota for vehicle imports is the best way to control the number of vehicles flooding the local market creating a host of issues to the economy, said  Ceylon Motor Traders Association (CMTA), Past Chairman  Tilak Gunasekera.

He said the quota system permitting a limited number of vehicles to be imported by franchise holders and recon importers had been proposed to the authorities on many occasions in the past but to no avail. The Government imposed an import control of vehicles and other non essential goods this year to limit the outflow of foreign currency.

“Imposing a licence fee for vehicle importers has twin benefits enabling the government to curb imports and increase income tax revenue,” Gunasekera said. The number of vehicles imported each year far exceeds the number the country could accommodate while contributing to poor air quality. “Even a small sales yard has around 200-300 vehicles.

If this amount is multiplied by the number of importers one could guess the quantity of vehicles imported to the country,” Gunasekera said. The value of the rupee plummeted to over Rs. 200 against the Greenback last year and continues to hover around Rs. 185 per US Dollar. The gross foreign reserves crossed USD 7 billion by the end of July this year. However, the CMTA, a trade association that represents automotive manufacturers through their local importers, called upon the Government recently to provide a clear direction on the period of the vehicle import suspension and emphasised the need to regulate automotive imports to legitimate importers that have been vetted by the Government. The Association noted that the vehicle import ban had adversely affected thousands of Sri Lankans and it is the responsibility of the authorities to communicate as to when the ban would be lifted so that businesses and citizens can plan ahead. The CMTA suggests that the Government implement a scheme to screen and register vehicle importers to control the quality and quantity of imports of vehicles. This is a practice that is employed by almost all countries and will provide assurance to consumers as they are buying a vehicle from a credible corporate entity and not unscrupulous operators. Only about 30% of vehicle imports are through manufacturer authorised importers.