Vehicle prices in Sri Lanka have recorded a sharp decline, with costs for small and popular models dropping by up to Rs. 1 million, according to the Vehicle Importers Association of Lanka (VIAL). Industry experts attribute the sudden market correction to over-importation following years of restrictions, creating a favorable window for prospective buyers before prices eventually stabilize.
Key Highlights
- Prices for popular models—including Suzuki Wagon R, Toyota Yaris, Honda Vezel, and Daihatsu Mira—have fallen by Rs. 400,000 to Rs. 1 million.
- Market over-supply following the easing of a five-year import ban has forced many traders to sell inventory at a loss.
- VIAL advises buyers to reserve vehicles now, warning that prices are expected to rise once market stabilization occurs.
- VIAL refutes recent claims by the Ceylon Motor Traders’ Association (CMTA) regarding massive government revenue losses from used vehicle imports.
Speaking to the media, VIAL Chairman Indika Sampath Merenchige highlighted that prices for widely sought-after vehicles in the Sri Lankan market—such as the Toyota Yaris, Toyota Raize, Honda Vezel, Suzuki Wagon R, Daihatsu Mira, and Suzuki vans—have seen reductions ranging between Rs. 400,000 and Rs. 1 million.
Merenchige explained that the vehicle shortage created by a five-year government restriction on imports has largely been fulfilled. However, subsequent import volumes exceeded actual consumer demand, creating an over-supply in the local market. This surplus, combined with recent government surcharges, has driven market prices down further, pushing many traders into selling vehicles at a loss to clear stock.
“Downward movement in vehicle prices could continue depending on prevailing market conditions, but prices are likely to rise once the market stabilizes,” Merenchige noted, advising consumers planning to purchase a vehicle to consider making reservations during this buyer-friendly phase.
Addressing recent industry tensions, the VIAL Chairman also dismissed allegations made by the Ceylon Motor Traders’ Association (CMTA). The CMTA had previously alleged that the government faced revenue losses exceeding Rs. 100 billion due to tax loopholes exploited by used vehicle importers. Countering these claims, Merenchige argued that revenue losses were tied to brand-new vehicle import structures under a 2016 Gazette notification, urging authorities not to be misled by inaccurate assessments.