President Anura Kumara Dissanayake said yesterday that although prices rose after the resumption of vehicle imports in February after a five-year hiatus, prices will gradually decrease depending on market behavior.
Taking part in a television program last night, he said that vehicle prices will initially rise to manage high demand in the first few months. But over time, the government plans to gradually ease this pressure.
“In 2018 and 2019, vehicles with a value of between US$ 1 and 2 billion were imported annually. Specifically, vehicles with a value of nearly US$ 2 billion were imported in 2018, and vehicles with a value of US$ 1.4 billion were imported in 2019. “The decision to reopen car imports was made not to strengthen dollar reserves, but as a step to reopen the car market and advance the country’s economy,” the president said.
“When the dollar rate was Rs 190, the existing vehicle market consisted mostly of imported vehicles. Now, when the dollar rate is Rs 300, new vehicle prices have increased by 40% in line with the higher exchange rate.
“However, due to the suspension of imports, a used vehicle market has emerged and many vehicles have been purchased under leasing facilities at high prices. Steps should be taken to avoid conflicts between prices in the used and brand new vehicle markets,” the President said. .
“If prices of used and brand new vehicles coincide, there will be a conflict. Therefore, brand new vehicle prices should be slightly higher than used vehicle prices to avoid a crisis for leasing companies and banks,” he said.
“The government plans to import vehicles worth US$1.2 billion from February 1, and imports will continue throughout the year. However, the government does not intend to open the market for all vehicle imports at once in February.
“About 20,000 vehicle licenses have been issued so far, but these license holders are currently not being facilitated. The government is currently discussing alternative arrangements for these license holders. In 2018, US$1.9 billion was allocated for vehicle licences. ,” he added.
