Import duty hike in Sri Lanka might badly affect Bajaj Auto

Indian biggie, Bajaj Auto is facing some serious difficulties now in one of its global market, Sri Lanka. The duty rise which is been introduced in Sri Lanka is going to affect really badly for the Bajaj company.


Sri Lanka has raised the import duty on petrol powered three wheeler from 51% to 100% and diesel powered three wheelers from 61% to 100%effective from 1st April 2012. This could impact a lot Bajaj Auto since Sri Lanaka accounts for around 10% of Bajaj's sales and about 12 -13% of EBITDA.



The Sri Lankan Treasury said the decision was taken in view of the increasing number of vehicles populating the island's roads since 2009. Vehicle imports have gone up significantly from the year 2009.

Sri Lanka is a market where Bajaj Auto Rickshaws used for personal use as a car. It is the only reason why Bajaj Auto wants to launch RE60 (A four wheeler auto rickshaw) in the Sri Lankan market before launching in India.

Hence, this duty hike will surely affect the Bajaj company.