Sri Lanka 2021. Government bans motorcycles import killing the industry

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Sri Lanka Motorcycles

Sri Lanka Motorcycles Market killed by the government decision to ban all vehicles import. The decision, taken temporarily in March 2020, has now been extended for the entire 2021, leaving hundred thousand people working in the industry without a job

The two-wheeler industry is reflecting the not easy economic momentum of Sri Lanka and the domestic sales are declining progressively, with 2019 figures down for the fourth year in a row, with the market ranking as the 18th in the World.

Indeed, after hitting the record in the 2015 when sales achieved the milestone of half million sales in a calendar year, the fall of the domestic economy had reduced the purchasing spending and the sector – primary in the transportation industry – felt down.

The 2019 total sales (including moped, motorcycles and tricycles) have been just over the 300k, losing 14.4% from the previous year.

The market is dominated by imported vehicles from India and Japan.

In the 2020, when the pandemic crisis arrived on top of the already hard economic situation, the government has taken a tough and controversial decision to temporary ban import of all vehicles. The decision was supported by the need to reduce currency deep deficit related for the most for the import of cars, hundred thousand already pre-owned, from Japan. 

However, and albeit the entire sector claims, the ban involved the motorcycles and tricycles vehicles as well.

As a result, after the lockdown taken in April, May, when showroom reopened they immediately went short of new motorcycles and sales dramatically dropped down, while the demand was potentially boosted by new customers in search of a safety individual mobility devise. 

The full year sales dropped at 268.000 units (-30.6%).

Unfortunately this sad story is not over. The Government in February 2021 decided to extend the ban for the entire 2021 (at least) projecting the motorcycles market to collapse.

Market Heritage

“The first motorcycle arrived in the island on January 20, 1903. Mr. C. Hahn of Messrs Bohirnger & Co. was the first person to introduce the motor cycle to Ceylon. These early motorcycles were belt-driven from the engine to the rear wheel and had only one speed and pedals were used to start it. The first motorcycle ride to Kandy and back was undertaken by Mr. Fred Nell, the founder of Colonial Motors on a ‘Noble’ machine. His trip from Colombo to Kandy and back in one day was a great achievement”.

English manufactured motorcycles were very popular and were imported by Sri Lanka users in the 1960’s too. English makes namely Norton, BSA, Royal Enfield and Triumph motorcycles were very popular here till the 1960’s. These English motorcycles had gear shifting lever located in the right side of the engine. They had choke and half compression facility for easy kick-start. Some models had gear levers that were operated by hand.

Later Japanese made Honda motorcycles were introduced in Sri Lanka by 1970’s. At first the small Honda motorcycles with less sound and gear changing levers on the left side didn’t attract much attention against the British models. Later when the Government allowed importing of used motorcycles from Japan, the Honda’s 90cc motorcycles (Super Cub and Postman Bikes) became a hit in Sri Lanka. People were looking for less priced motorbikes from Japan with different engine capacities. After this, Yamaha, Kawasaki, Suzuki and other companies started to open their marketing expansion here in Sri Lanka.

Competitive Landscape

Honda took the lead in the market in the seventies and reinforced it with the partnership with the Indian Hero. In more recent years Japanese brands have left space to Indians and the market become a feud of Bajaj Auto, which in the 2014 hit an impressive record of 80% market share, actually declined at some more than 60%.

Others Indian brands are on top of sales, like TVS (with the Apache very popular), Hero, Mahindra (actually declined) and Royal Enfield. All Japanese are represented while KTM – thanks to the partnership with Bajaj and with vehicles arriving from India – is the leader among the premium brands. BMW was able to supply local police department in a country were the cc limit for road use is 250cc.