Business

Vehicle importers have reported a slowdown in demand for new vehicle purchases following a surge in imports over the past several months. They said the influx of vehicles brought in to meet pent-up demand after years of restrictions has now led to a cooling-off period, as the initial rush of buyers have subsided. Vehicle Importers' Association of Sri Lanka (VIASL) President Prasad Manage told that while import volumes rose significantly in recent months, the market is now experiencing a cooling period as the initial demand has largely been met. However, it is reported that, in the wake of the slow down in demand, some new vehicle import companies have launched promotion campaigns like promotional tours to attract new buyers. "The country is receiving sufficient new vehicles to fulfill the demand, and every vehicle sale in the country is filled with new models," he said. He added that a three-percent penalty on the CIF (Cost, Insurance, and Freight) value must be paid to the government if newly imported vehicles remain unsold for more than 90 days (three months). That cost is to be borne by the vehicle importer and would not affect the buyer. According to government reports, since the lifting of the vehicle import ban in early 2025, Sri Lanka has spent over USD 1 billion on vehicle imports. According to Sri Lanka Customs, nearly 50,000 motor vehicles were released from customs between December 2024 and June 2025, including 14,047 motor cars, data from the Finance Ministry revealed. Vehicle imports, including both personal and commercial vehicles, amounted to USD 249 million in August 2025, bringing the total vehicle imports to USD 918 million in the first eight months of the year. Vehicle imports were severely restricted between 2020 and late 2024 to preserve foreign exchange reserves amid Sri Lanka’s economic crisis. Restrictions began easing in late 2023, allowing for limited essential imports. In 2022, import expenditure declined by 11.4% year-on-year, while in 2021, imports were valued at USD 422 million, down from USD 603 million in 2020, reflecting the deep impact of the prolonged ban. Meanwhile, Commissioner General of the Department of Motor Traffic (DMT) Kamal Amarasinghe told that new vehicle registrations at the department increased in September compared to previous months, bringing the total vehicle population to 8.67 million.