25 June 2024 09:01 am Views - 565
As the vehicle sales segment is expected to become active once again, paving the way for the commencement of
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Ranjith Pandithage |
another cycle, Diesel & Motor Engineering PLC (DIMO) asserted it is “very important” that the country regulates the import of vehicles well.
While revenue must be protected, there should be strict controls on allowing old vehicles into the market, said DIMO Chairman Ranjith Pandithage in the entity’s latest annual report.
Reason being, old vehicles will become a burden on the country, in terms of subsequent demand for spare part imports and emissions.
“This is a great opportunity to bring healthy new regulations for vehicle imports,” he said.
Pandithage also said the vehicle leasing industry too needs to consider reducing the initial contribution required by the lessor, provided it is consistent with the country’s monetary regulations.
The vehicle import ban, which is in place for the fourth consecutive year, severely impacted the revenue stream of the importers. For DIMO, vehicles have historically been a cash-cow.
As part of its expansion strategy and to mitigate the impact of local economic fluctuations, DIMO has pursued business growth beyond Sri Lanka. It has laid the groundwork to launch a business to export locally assembled recreational vehicles to Australia.
DIMO ended its financial year (2023/2024) with its profit before tax reducing to Rs.183 million, due to partially having taken the burden in the interest cost relating to borrowings for recent investments, some of which did not provide returns as anticipated.
The retail segment too performed below expectations whilst it awaits a gradual opening of vehicle imports.
However, DIMO saw positive contributions from its agriculture and automotive engineering solutions segments, which provided some respite from the difficulties in other segments.