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Luxury Car Sales Shoot Up

Jun 19, 2010 3:01:46 PM - thesundayleader.lk

By Indi Samarajiva

Local agent for Mercedes Benz in Sri Lanka, DIMO reported selling 15 new sedans in the last week. Salesman Shanil Jayamanne said the company confirmed the sale of over 60 vehicles in the same time. Last year he reported selling two new cars, total. This sudden jump in sales is due to the government cutting excise duty by almost half. With the jump in sales, however, they look set to make more revenue than before.

As reported in The Sunday Leader last week, only around 300 brand new vehicles and under 500 used vehicles were imported to Sri Lanka. As is evident from DIMO sales, the sales under the new tax scheme will be much higher. The stock market was also quick to buy and DIMO shares jumped around Rs.200 in two days.

Other car suppliers like Toyota and even local manufacturer/importer Micro also reported an increase in orders. “In general terms, the saving is approximately Rs.6 million for Land Cruiser type petrol vehicles,” said Toyota’s Janath Badugama. “For passenger vehicles, more than a million.”

These savings have spurred pent-up demand from years under a nearly 300% tax scheme. The reduction to something like a 150% tax scheme has led to a dramatic increase in sales.