Hybrids the good and the bad

A good site that hybrid buyers might want to checkout is http://www.greenhybrid.com as these provide rich discussions on most of the popular hybrids, and you can find some interesting issues.

While real life fuel efficiencies are definitely great in city driving conditions, the gains on open roads are less evident.  A common finding in UK is that the latest Turbo diesels return better or equal fuel efficiencies with less complexities than hybrids, however local taxes on diesels means we can’t import these great turbo diesels at low prices.

Some quick findings on hybrid batteries

  • Agent support seems very important, as unlike normal cars, these cars seem to need software upgrades, as this impact the battery usage efficiencies and the vehicle functionality as a hybrid
  • The battery depletion rate is impacted by the weather conditions, usage patterns.  Hotter weather conditions, regular idling seems to have impact on the battery life and efficiencies.
  • Battery efficiencies and lifetime is impacted by the batch and manufacture year.

More to come…


Hybrid cars in the Japanese market 2010

Hybrids are fast becoming popular solution, and the most awaited talked about in this market is the GM products that have taken so many years to get into production state. The first platform being the Chevrolet Volt, with Vauxhall have a re-badged version Ampera.  The key difference is unlike most hybrids where the electric motor is the secondary power source, the Volt/Ampera run purely on the electric motor, and the petrol engine does not power the car, but charges the battery.  Hence the car is actually marketed as an Electric car as opposed to an Hybrid. (Checkout – http://www.gm.com/vehicles/hybrids-and-electric/electric/)

However this car is planned for release in 2011, and possibly we might also see similar implementations from other vendors but considering the challenges GM faced in getting this implemented, its not going to happen soon.

So back to earth, what are the options that we have in the Japanese market since the Sri Lankan industry is driven by used cars coming out from that market.  The other new option that is starting to get popular is the new generation products from Hyundai/Kia.




3310 Sold in the US as the RX400H
Toyota SAI Sedan 2009 – current DAA-AZK10 2362 LEXUS HS250 with Toyota badging
Toyota PRIUS 3rd generation Hatchback 2009 – current DAA-ZVW30 1797
Toyota PRIUS 2nd generation Hatchback 2003 – 2009 / current DAA-NHW20 1496 Seems the production of this continues parallel to the newer model
TOYOTA ALPHARD HYBRID 4WD Minivan 2003 – 2008 DAA-ATH10W 2362
HONDA INSIGHT 2nd generation Hatchback 2009 – current DAA-ZE2 1,339
Honda CRZ 3dr Hatchback 2010 – current DAA-ZF1 1,496
HONDA CIVIC HYBRID Sedan 2005 – current DAA-FD3 1339
Honda FIT HYBRID Hatchback 2010 – current DAA-GP1 1339 Honda GE6 hybrid version

Taxes reduced further for car imports to Sri Lanka

Contradictory to all industry expectations, and comments made by members handling policies, the taxes have been revised further to the astonishment of many.  While definitely good for car buyers, i am sure many who brought cars recently, or were waiting to sell and buy new would be a bit disturbed by the massive changes.

The only link i have found for now is http://lbo.lk/fullstory.php?nid=349762860

Based on this the reduction in prices will come from

1. Reduction in VAT from 20% to 12%

2. Aging/depreciation percentages have been increased that means less tax.  E.g. 3-3.5 year was 75%, now its 55%, 2-3 years was 80%, now its 60%.

3. Social responsibility levy(SRL) of 2% has been removed

4. Nation building tax (NBT) reduced by 1%

5. Regional infrastructure development (RDL) of 5% removed

However excise duties have been increased, details of which have not been mentioned (one mention being that it had been doubled), would be nice to see as this might level out any benefits from the VAT and aging/depreciation.   In the case the excise duty has been doubled, then even with the VAT and aging, prices potentially could go up for some cars!

But the big saving comes for hybrids and electric cars where the following exceptions are given it seems,

1. No VAT, so that means compared to old taxes its a 20% decrease in taxes, and compared to other cars 12% less in the revised taxing

2. Excise duty is not null for all it seems.  Its null for some, and reduced depending on the category, precise impact maybe model based.  The drop categories stated say 30 to 15%, 15, 15 to 5% and 5 to 0%.  We will need to wait for a more definitive tables to see how this gets applicable.

So looks like hybrid cars such as Honda Civic Hybrid, Toyota Prius, Toyota Harrier Hybrid, Honda Fit Hybrid etc are going to be hot cars.

A brief guide on importing a car to Sri Lanka

Seems this topic has suddenly become a popular forum discussion point, and decided to give some personal experiences. Please note these are experiences I faced, or my friends phased during the period Aug – Nov 2010, and things may have changed if you are reading it later.  Do not take this contents are pure standard, and check with the documents and authorities as things change, use this just as good reading!

A work in progress as I fill in the details (some I have just left xxx to get the precise name as it alludes me right now).

The basic steps are pretty simple,

  1. You find a dealer in Japan who can buy the car for you and ship it, or find a dealer locally who has contacts in Japan who can buy the car for you at an auction.
  2. The dealers quote two prices
    1. FOB price which is the auction price, Japanese taxes and any local transportation.
    2. CIF price, the dealer will then add his markup (profit), the cost of JAAI (or equivalent certification) and the shipping and insurance costs.
  3. The dealer will then ask you to raise a LC with the bank for the CIF value.
    1. The banks will lock 10% more than the CIF value to cover any changes in currency rates.  So make sure you have 10% more than the CIF value in your bank to raise the LC.
    2. The bank will lock the value using the current exchange rate, but this is not your final cost.  The actual amount will be based on the currency rate on the day you get the papers from the dealer just a few days back.
    3. Another thing important is that you make sure the invoice sent by the dealer for you raise the LC has your name spelt correctly as in your tax file / identity card, and the address is the same.  If not you are going to have a big problem when clearing the car.
  4. Once the LC has been raised the dealer in japan will start the shipping process, and will inform you a tentative date that the ship will leave the country.
    1. The month (And in some cases the date) the ship leaves the country is important, as the tax bracket the vehicle will fall under is decided this milestone.  So work that calculations carefully and make sure the car is not over 3.5 years older as such vehicles are not allowed (usually the dealers know this and will advise you)
    2. You then test your patience, as the likely hood of the estimated shipping time and actual may vary not due to the ship getting late, but the dealers have a history of telling you a date, and actually shipping it later as they try increase their profits by bulk shipping.  You may ask why is he not giving me the benefit of the shipping savings, since you will notice it in the invoice.  But the standard policy is that they quote a value less than the actual to ensure you taxation locally remains below the agent market value.
  5. A few days before the ship comes into Sri Lankan ports, the dealer will send your papers to the bank. The bank will then call you and inform about the receipt of the document, and the moment you sign and confirm on the papers at the bank is when you are actually charged for the LC value and any excess from the 10% the bank retained over the standard value is released back into your account.
  6. Once you have the documents you can then start the customs clearance process.  You will first need to either visit the Inland Revenue to get the TIN/VAT documents, or have an agent who handles tax work help you out.  Using an agent is the best approach as they seem to be able to get the documents within a day.  In case you don’t have a tax file, a new tax file is created for you 🙂
  7. You will also have to get the XXX document.  Some clearance agents won’t get you this and you then need to go and get this.  However most good clearance agents will do this and save you the trouble.
  8. Once you have the TIN/VAT documents, you then need to contact your clearance agent before you go and handover the documents to the customs (you need to do this personally or provide a letter that the person is handing on your behalf).  The queue is minimal and you should be done with the handing over in less than 15mins at MOST!
  9. The clearance agent will then start the clearance process and inform you of the total tax and accessories price you need to raise the PO from a bank.  You then hand over the PO to the clearance agent to complete the clearance.
  10. The clearance agent will clear the vehicle and inform you, or tell you to be there at the customs gate to pick the car.

Some questions and watch outs

Direct Japanese dealer or Local dealer who works with a Japanese dealer

The best option it seems is to go with a local dealer who has his own company in Japan or a contact that he works in partnership. This way you don’t end up paying a markup for the local dealer.

If you go with a local dealer who has connections in Japan, he will also only charge a down payment for you until the vehicle is purchased in the auction, and once you raise the LC will refund you the down payment.

Can I trust the amount the Japanese dealer quotes

Well this is a tough one.  Dealer in the early days seems to have been a lot more customer oriented, but seems the approach now is you tell me the figure you want to spend and will try to get you a vehicle or tell you how much more you need spend (never how much less).

The reason being that the dealer will not share the auction numbers, unless you have some way of connecting to the auction system and checking the auction sale price.  However note the auction sale price is not the FOB price, as there are some taxes the dealers have to pay and some auction surcharges.

How much is the general charge on top of FOB prices

The charge is based on the markup by the dealer, and the shipping and insurance charges.  Again dealers seem to have been a lot more customer oriented before and the charges were around 220,000 YEN in total for small cars (Vitz, Fit, etc) and 300,000 YEN for medium size cars (Civic, Corolla, RAV4), etc.  Larger cars sadly I have no values.  However in recent times this value seems to have increased to 350-400,000 YEN, and even small cars are charged 300,000 YEN.

What does the clearance guy do for the money he charges

Some will get the XXX document for you, you need to pay the cash for this

  • They will get the market value approved by the local agent
  • They will clear the vehicle for you, and based on how “connected” they are decides how quickly you get your car out
  • The “connected” feature will also help in the areas of accessories, since there is some grayness in the accessory charges, and you can end up with premium taxes.  So the clearance guy can help you here to ensure you don’t get ripped out.

How much can you trust the clearance guy

Clearance guys test your knowledge and can sucker you.  One famous cheat is to say that they can save you from some accessory charges as they have contacts in customs, and show the tax amount, and tell you how much you need to bribe the customs.  Seems in many cases there is no such accessory charge, and the “Bribe” is actually cash they pocket. How can you track this,

The only legitimate cash being paid is the PO you raise for the payment.  This includes the charges + accessories.  Anything you pay as cash is something you are paying to the clearance guy or a bribe payment
Find a contact in the local agent to see what are the standard features for your car, and see if these are being mentioned as accessories by your clearance guy.  E.g. Alloys are standard for most Honda cars, but not for Toyota.  However the clearance guy will see if you are aware of this, if not say the alloys are optional and that you have to pay taxes, and he can save you 50% of it by bribing

However seems that as everything goes the ability to penetrate the customs officers is still possible and influential clearance chaps seem to be able to pull out major savings.  No I sadly don’t know such a clearance guy, so please don’t contact me or post any such entries into this forum!