Sri Lanka Autos Report - Business Monitor International - Industry Reports

Sri Lanka Autos Report

Sri Lanka Autos Report - Business Monitor International - Industry Reports
Sri Lanka Autos Report
Published Sep 03, 2016
34 pages — Published Sep 03, 2016
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Abstract:

Although the government has pledged no further changes to import tariffs or taxation levels over the short term, the damage has already been done to both the new and used car sales markets for ----. Consequently, we adopt a negative near-term stance, with the likelihood of further monetary tightening by the CBSL (which hiked the benchmark Standing Lending Facility Rate to -.- in July ----) acting as a further disincentive to those local consumers reliant on auto financing to buy a new vehicle. ...Although the government has pledged no further changes to import tariffs or taxation levels over the short term, the damage has already been done to both the new and used car sales markets for ----. Consequently, we adopt a negative near-term stance, with the likelihood of further monetary tightening by the CBSL (which hiked the benchmark Standing Lending Facility Rate to -.- in July ----) acting as a further disincentive to those local consumers reliant on auto financing to buy a new vehicle. Beyond the current year, we retain an optimistic medium-term view on the Sri Lankan auto sector. ...Beyond the current year therefore, we are targeting steady sales growth across our forecast period to ----. We expect stronger growth in commercial vehicle sales than in passenger car sales, although passenger cars will still account for the majority of all vehicles sold in Sri Lanka by ----.

...We are now much more bearish on the short-term outlook for the Sri Lankan new vehicle sales market, given higher import and other taxes, alongside a weak rupee. In ----, we expect commercial vehicle sales to fall by a smaller amount than passenger car sales, as businesses take advantage of a growing economy to invest more in fleet renewal. ...We are now much more bearish on the short-term outlook for the Sri Lankan new vehicle sales market, given higher import and other taxes, alongside a weak rupee. In ----, we expect commercial vehicle sales to fall by a smaller amount than passenger car sales, as businesses take advantage of a growing economy to invest more in fleet renewal. Higher numbers of inbound tourists should boost demand for rental cars and minibuses/buses, lending support to new vehicle sales as we move into ----. ...The establishment of a more substantial local production base could prove transformative in terms of boosting domestic sales and developing a wider supplier segment. Given the rising import taxes being imposed on new vehicles by the Sri Lankan government at present, we believe that it would make sense for Maruti to set up a local production facility, especially with demand for new cars set to remain strong over the long term.

...In what could prove a transformative step for Sri Lankan auto production, it was reported in August ---- that German automaker Volkswagen (VW) had signed an agreement with Sri Lanka s Board of Investment to build an assembly plant on a -- acre site near the town of Kuliyapitiya. Construction of the USD--.-mn plant will be completed within two years, with reports in April ---- that a suitable site had now been located in the Kuliyapitiya area. ...

  
Source:
Document ID
2058-654X
Country
Industry
Format:
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Business Monitor International - Industry Reports—Established in 1984, Business Monitor International is a leading online publisher of specialist business information on global emerging markets. Business Monitor's range of quarterly services covers political risk, finance, macroeconomic performance, outlook and forecast, industry sectors and the business operating environment. Each Industry Report has been researched at source, and features latest-available data covering production, sales, imports and exports; 5-year industry forecasts through end-2012; company rankings and competitive landscapes for multinational and local manufacturers and suppliers; and analysis of latest industry developments, trends and regulatory changes.

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MLA:
Business Monitor International - Industry Reports. "Sri Lanka Autos Report" Sep 03, 2016. Alacra Store. Dec 05, 2016. <http://www.alacrastore.com/storecontent/Business-Monitor-International-Industry-Reports/Sri-Lanka-Autos-Report-2026-1741>
  
APA:
Business Monitor International - Industry Reports. (2016). Sri Lanka Autos Report Sep 03, 2016. New York, NY: Alacra Store. Retrieved Dec 05, 2016 from <http://www.alacrastore.com/storecontent/Business-Monitor-International-Industry-Reports/Sri-Lanka-Autos-Report-2026-1741>
  
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