CMTA raises concerns over used vehicle assembly proposal

The Ceylon Motor Traders Association (CMTA) says that it understands the Government’s decision to restrict vehicle imports in order to safeguard foreign exchange reserves and keep the currency stable in the wake of COVID-19 from early 2020.

However, the CMTA was disappointed to learn that a cabinet proposal to allow assembly of vehicles with used parts was being considered and if passed would be violating many laws and regulations for vehicle assembly. The CMTA has vehemently opposed this proposal, which raises many concerns over the safety standards, durability and reliability of vehicles assembled from used parts of questionable quality.

CMTA Chairman, Yasendra Amerasinghe said, “This proposal puts the potential owners of these vehicles, as well as the general public at grave risk, as there are no practical means to ensure that the parts being used are without defects that could lead to road accidents, or even vehicles catching fire. It also means that the Government will be defrauded of billions of tax revenue as this proposal will enable the assembler to pay only spare parts duty on the depreciated value of the used parts, which is only a small fraction of that of an imported car.”

Furthermore, the CMTA argues that it is extremely unfair to the motor industry to consider such a proposal while many LCs that had been opened before the import restrictions are still on hold by the Government. Moreover, in March 2021, the CMTA, at the request of Dr. P. B. Jayasundera, had submitted a proposal on a quota system for a minimum level of vehicle imports that would allow the industry to survive without needing to resort to further job cuts. The CMTA urges the government to prioritize and take necessary action regarding this critical issue faced by the entire motor industry, which is also affecting the general public who have been subjected to soaring vehicle prices due to the lack of supply of vehicles to the market.

Founded in 1920, the Ceylon Motor Traders Association (CMTA) is the only Ceylon Chamber of Commerce affiliated trade body that represents vehicle manufacturers through their locally appointed franchise holders (commonly called ‘agents’). It is the most senior automotive trade association in the region. The members of the CMTA collectively employ and train thousands of Sri Lankan citizens while bringing in international best practices in engineering and management, developing a talent pool that is trained and employable internationally. CMTA members are all audited by the manufacturers they represent, and the vehicles they import are shipped directly from the factory, designed to meet country specific requirements.