Car spare parts stores in Colombo, Sri Lanka’s capital, are receiving a continuous stream of customers asking for side mirrors for Suzuki’s tiny Wagon R, which are quickly becoming a sought-after commodity in the island nation, said a report from the news agency Reuters
As imports fall, foreign exchange reserves fall, and a potential national default looms, the hunt for the modest product illustrates mounting economic problems for the South Asian country.
Due to its low operating expenses, Suzuki’s boxy five-seater car is extremely popular in Sri Lanka. Replacement side mirrors are frequently sought in the spare parts stores dotted around the Nugegoda suburb, with 30,000 automobiles sold in the last four years in a country with relatively high road crash rates.
“Everyone is seeking for Wagon R components,” said Supun Deshak, a salesman at one of the district’s stores where refurbished spare parts are heaped high.
The problem is that importers are having difficulties locating car parts because they are considered non-essential imports under government guidelines enacted in response to the coronavirus pandemic’s impact on the country’s diminishing foreign exchange reserves.
Reserves have dropped from $7.5 billion in January 2020 to $2.36 billion. Simultaneously, the government confronts a $4 billion debt requirement this year, and local banks are frequently unable to deliver the currency that importers want.
“The biggest concern right now is the difficulty in importing spare parts for maintaining the existing fleet of vehicles,” said Yasendra Amerasinghe, chairman of the Ceylon Motor Traders Association (CMTA), which represents the country’s major vehicle importers.
The CMTA anticipates that imports of car spare parts will drop by roughly 30% in value this fiscal year compared to pre-pandemic levels, owing mostly to recent foreign exchange shortages.
Many replacement parts are already in limited supply, according to five Colombo car dealers, with barely a trickle of fresh stock arriving from outside, driving up local costs.
Thieves wanting to earn fast cash by stealing side mirrors off popular models like the Wagon R and selling them on the black market are exacerbating the situation, according to the dealers.
The cost of refurbished Wagon R mirrors has risen by more than 35 percent since the outbreak, to at least 30,000 Sri Lankan rupees ($148.5) each piece, according to retailers.
The country’s economic crisis, which is the worst in a decade, has sparked an increase in second-hand vehicle costs.
As part of the government’s effort to deal with the financial crisis, almost all car imports were banned in March 2020, followed by a ban on non-essential products like as air conditioners, refrigerators, and video game consoles.
According to the CMTA, this has increased the cost of certain used vehicles by more than 100 per cent. There are no mass-produced cars in Sri Lanka.
According to CMTA Vice Chairman Virann De Zoysa, a used Wagon R costs roughly 5 million rupees ($24,752), far more than the 2.8 million rupees a brand new vehicle costs in 2018.
This has put even more pressure on the spares market, as many car owners try to profit from the price increase by replacing parts, according to Musthaq Nazeer of Azka Auto Supply, a modest business stocked with car mirrors and lights.
The CMTA has asked the government to categorize car spare parts as an essential commodity, along with some food and medication, to increase imports, as global automotive supply chain disruptions add another layer to the problem.
“Every distributor’s out of many, many key parts,” De Zoysa said. “We’re turning away customers on a daily basis.”
(Adapted from Reuters.com)