Sri Lanka Large Truck Sales Plunge…

Sri Lanka’s large truck and tractor new registrations have continued to fall in January 2014 amid weak economic conditions, an analysis of motor vehicle registry data by an equities research house shows.

An analysis by JB Stockbrokers showed that mini truck (less than one tonne) registrations were only 10 percent in January 2014 only 10 percent down from a year earlier at 1,305 units.
The sector was dominated by India’s Tata with a 49.7 percent share and Mahindra with a 48.8 percent share. Lite truck sales were down 37 percent from two years ago.

But lite trucks with a payload of up to two tonnes were down 66 percent to 149 units in January 2014 from a year earlier. The segment was down 49 percent from two years earlier.

Chinese brands such as Foton, DFSK and JAC dominated the market segment. New registrations of medium sized trucks (2-5 tonnes) were down 24 percent to 159 units in January 2014 from a year earlier. Two years ago 367 units were sold in January.

Heavy truck registrations were down 38 percent to 131 units. Registrations were down 82 percent from two year earlier when 760 units were sold in January 2012.

Two years ago a credit bubble broke with a balance of payments crisis and economic activity has slowed since then. Vehicle prices have gone up due to higher taxes, higher interest rates and currency depreciation.

JB Stockbrokers said the segment included dump trucks, asset class which was under stress with anecdotes of operators returning vehicles voluntarily to leasing companies before they were seized.

A senior leasing industry official said large trucks were accumulating in yards of some finance companies.

Large trucks were used in particularly in state construction projects, many of which are now ending. There have also been payment delays to contractors, industry sources say.

Small ‘hand’ tractor sales were also down 21 percent to 596 units in January 2014, from 763 a year earlier. In January 2012, 1,675 small tractors were registered. Large tractor sales were down 42 percent to 180 units in January 2014 from a year earlier. Two years ago in January 546 units were sold.

Tractors are sold in agricultural regions, which have seen droughts. JB Stockbrokers says tractors are also used for goods transport and the increasing availability of mini trucks may be displacing them.

However there has been some recovery in the passenger vehicles sector. Car registrations were up 35 percent to 1,949 in January 2014 from a year earlier, though down from the 5000 plus units a month seen in the pre-tax hike days.

Motor cycle sales also picked up 17 percent to 16,402 units in January 2014 from a year earlier though down from the 20,000 units plus a month seen in pre tax hike days.