New right-hand-drive Audi and BMW vehicles are being advertised on the Sri Lankan vehicles sales website Ikman by small private retailers, mainly in the Colombo area.
At least two of the parallel-import vehicles – a recently superseded BMW 318i and an Audi A1 – can be seen in advertisement photographs with tell-tale Australian mandatory fuel economy stickers on the windshield.
Sticky tale: An Australian mandatory fuel economy sticker can be seen on the windscreen of a BMW 318i advertised on a Sri Lankan website, pointing to the origins of the car.
Such exports are not illegal, but most car companies – including Audi and BMW – have clauses in their dealership agreements forbidding dealers from knowingly selling new vehicles for export to foreign markets.
The rules are in place to protect official distribution networks in those markets. In the case of Sri Lanka, BMW and Audi have only one official dealership each on the island nation, both in the largest city of Colombo.
It is unclear how the vehicles have been sourced in Australia and by whom, but GoAuto has been told that at least some of the cars were bought by a prestige car rental company at discounted retail prices from two Melbourne dealerships and then shipped to Sri Lanka for sale without the knowledge of the dealers or BMW Australia and Audi Australia.
GoAuto has been told that BMW Australia contacted at least one group of people organising exports and asked them to desist. Audi is also thought to have taken action, but has declined to comment.
Cars with small-capacity engines such as Audi’s 1.0- and 1.4-litre three-cylinders and BMW’s 1.5-litre three-cylinder appear to be favoured to avoid punitive import taxes on larger engines in Sri Lanka.
Under Sri Lanka’s complex car import rules, passenger cars under three years old are hit with a 30 per cent tariff, along with an extra tax penalty per cubic centimetre of engine size.
The taxes and shipping costs are reflected in the vehicle prices. A three-cylinder 318i with an M Sport pack that would normally retail in Australia for about $60,000 is listed on the Sri Lankan website for the equivalent of $96,600, which, it appears, passes for value in that market.
Among the models listed with such engines on Ikman are Audi’s A1, A3, Q2 and Q3, and BMW’s 118i, 218i, X1 and X2.
A high-end BMW i8 plug-in hybrid sportscar that also employs BMW’s small 1.5-litre powerplant is also on offer, although its origins are unknown.
GoAuto understands both Audi and BMW have been investigating the unofficial trade which has caused ripples as far away as Germany.
Car companies have certain triggers in their processes to try to thwart such practices, starting with the initial registration, warranty and service recording processes.
It is unclear whether the companies became aware of the practice via these systems or if they were tipped off by someone with knowledge of the trade.
The number of cars to have made the journey from Australia to Sri Lanka is also unknown. One car company representative told GoAuto that only a handful of cars of one particular brand were shipped before it was stopped, but an industry source said the total could have been as many as 100.
An unconfirmed report suggests cars sold as new in Sri Lanka are also being sourced from another right-hand drive market, Japan.
While BMW and Audi cars appear prominently on the Ikman sales website, zero-kilometre vehicles from rival Mercedes-Benz are much thinner on the ground.
We spotted two such vehicles, both C180 Cabriolets, but as that model is not offered in Australia, they must have come from somewhere else.
GoAuto has approached Audi Australia and BMW Australia for comment.
By Ron Hammerton
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