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Duty reduction on electric vehicles, a farce - VIAL


The duty reduction on electric vehicles in the last budget has not had any effect and up to now not a single high quality electric vehicle has been imported to the country.

2018-05-27


He said that this is because vehicle importers cannot afford the high price. “The duty reduction was first introduced only on brand new electric cars. Upon our request to extent that duty reduction on used electric vehicles the government amended the proposals to cover electric vehicle used up to one year. But this limit is not practical at all,”he said.

“We are now preparing after six months to gather all data with regard to electric vehicles imported to the country and convince the government that the budget proposals on electric vehicles has not been practical,”Merenchige said.

The 2018 Budget proposal to increase the leasing facility for electric and hybrid vehicles (Loan to Value Ratio (LTV) for hybrid vehicle financing from 50% to 70% and up to 90% for electric vehicles) too has had no impact yet. Because even though two months has lapsed since the presentation of the budget that concession has not been enforced yet.

“The reason for that is it has not been implemented from one place. The revised leasing facility only takes affect once it is notified to the Central Bank from the Finance Ministry and the Central Bank notifying the relevant financial institutions. The red tape and inefficiencies associated with those entities has delayed it.”

Merenchige also said that it’s a fact that people postponed their dream of purchasing a vehicle until the Budget was presented but today due to the extreme competition in the market, customers alleged that that many frauds take place at the point of sale of vehicles.

In general today there has not been a substantial change in vehicle sales to what it was in the past. But the pattern in vehicle sales has clearly changed with customers opting for vehicles of high quality imported from Japan.”

“Of course with tariff changes affected in the budget, the demand for vehicles such as the Wagon R which is under the 1,000 cc engine capacity has increased substantially.Similarly, the monopoly enjoyed by one company to import vehicles under the CC 1,000 engine capacity has now got disseminated among several vehicles trading organizations Island wide which is a very good trend. However the sales of over 1,500 cc hybrid vehicle which prices remain to be high has saw a steep decline,” Merenchige pointed out.