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Sri lanka News – Associated Motorway, a unit of Dubai-based Al-Futtaim group which holds the agencies for Nissan, Suzuki, Yamaha, Renault and New Holland vehicles in Sri Lanka said it is downsizing
Sri Lanka unit due to import controls and the ongoing currency crisis.

“The restructuring of AMW is in direct response to Sri Lanka’s current economic situation and the challenges that high inflation, vehicle import bans and high interest rates place on the automotive sector,” the company said in a statement.

Sri Lanka operates highly discretionary soft – pegged regime called flexible inflation targeting where interest rates are mis-targeted for stimulus (output gap targeting) with a price target as high as 6 percent and policy errors are compensated by depreciation.

Sri Lanka regularly imposes import controls on vehicles after mis-targeting money. In 2020 vehicle import were completely banned, along with a hundreds of other items after printing money to keep rates down.

Each currency crisis is accompanied by output shocks and consumption collapses.

AMW said it will select the locations to close in the next weeks. They will be shut over several months.

It did not specify how many people will be laid off.

“As a family business, people are our most important asset, and we have a responsibility to focus on decisions that protect our people and partners for the long term,” Peter Mackenzie, Group Managing Director, AMW said in a statement.

“While these decisions are always difficult, we are confident that these are the changes we need to make to ensure business longevity. This is a strategic decision for us to consolidate our business and focus on our strengths.

“We are committed to ensuring AMW remains operational, continuing to work with its principals and maintain the highest level of customer service.”

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