Vehicle prices in Sri Lanka drop by up to Rs. 1 mn, says importers’ body

Vehicle prices in the local market have declined considerably, with prices of some small vehicles falling by at least Rs. 1 million, Vehicle Importers Association of Lanka (VIAL) Chairman Indika Sampath Merenchige said.

Speaking to the media, Merenchige said the current market situation provided an opportunity for those planning to purchase vehicles to reserve them, as prices could decline further.

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He said many traders were currently selling vehicles at a loss, while the downward trend in prices was expected to continue depending on market conditions.

“People who are planning to buy vehicles should consider reserving them at this stage,” he said.

However, Merenchige said vehicle prices could increase once the market stabilised.

He said prices of several popular models, including the Toyota Yaris, Toyota Raize, Honda Vezel, Suzuki Wagon R, Daihatsu Mira and Suzuki vans, had fallen by between Rs. 400,000 and Rs. 1 million.

Rejecting recent claims by the Ceylon Motor Traders’ Association (CMTA), Merenchige said any alleged loss of Government revenue was attributable to the importation of brand-new vehicles.

The CMTA had claimed that the Government could lose between Rs. 100 billion and Rs. 120 billion in revenue in 2026 due to a tax loophole allegedly being exploited by used-vehicle importers. It had also claimed that the Government had lost around Rs. 40 billion in 2025 and a further Rs. 54 billion between January and July this year.

Merenchige explained the impact of brand-new vehicle imports on Government revenue, referring to provisions contained in a 2016 Gazette notification. He urged the authorities not to be misled by what he described as inaccurate claims.

He said the shortage of vehicles caused by the five-year restriction on vehicle imports had now largely been addressed, although more vehicles were still needed to meet the remaining market demand.

However, he claimed that vehicle imports had subsequently exceeded actual market requirements, contributing to the decline in prices.

Merenchige also attributed part of the recent price reduction to the surcharge imposed by the Government, saying it had contributed to the downward movement in vehicle prices.