Vehicle importers in Sri Lanka report a slowdown in new car purchases following a recent surge in imports, as pent-up demand from years of restrictions begins to ease.
Prasad Manage, President of the Vehicle Importers’ Association of Sri Lanka (VIASL), stated that while import volumes rose sharply in recent months, the market is now entering a cooling-off period as the initial rush of buyers subsides. Some importers have launched promotional campaigns, such as roadshows and special offers, to attract new customers.
Manage noted that a three-percent penalty on the CIF (Cost, Insurance, and Freight) value applies to newly imported vehicles that remain unsold for more than 90 days, a cost borne by importers and not by buyers.
Government data shows that since the lifting of the vehicle import ban in early 2025, Sri Lanka has spent over USD 1 billion on vehicle imports. Between December 2024 and June 2025, nearly 50,000 motor vehicles—including 14,047 motor cars—were released from customs. In August 2025 alone, vehicle imports reached USD 249 million, bringing total imports for the first eight months of the year to USD 918 million.
Vehicle imports had been severely restricted between 2020 and late 2024 to protect foreign exchange reserves amid the economic crisis. Restrictions began easing in late 2023, allowing limited essential imports. Import expenditure fell 11.4% in 2022 compared to the previous year and had dropped from USD 603 million in 2020 to USD 422 million in 2021.
Meanwhile, Commissioner General of the Department of Motor Traffic, Kamal Amarasinghe, reported that new vehicle registrations increased in September, bringing Sri Lanka’s total vehicle population to 8.67 million.
