Vehicle prices fall sharply, more drops expected
– A considerable drop in vehicle prices has been reported in the local market, with prices of 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 situation presented a favourable opportunity for people planning to purchase vehicles to reserve them.He said most traders were currently selling vehicles at a loss, while market prices were expected to decline further.
“People who are planning to buy vehicles should consider reserving them at this stage,” he said.Merenchige added that the downward trend in vehicle prices could continue depending on market conditions, but vehicle prices were likely to rise once the market stabilized. He said prices of some of the most popular vehicle models in the country, including the Toyota Yaris, Toyota Raize, Honda Vezel, Suzuki Wagon R, Daihatsu Mira and Suzuki vans, had declined by between Rs. 400,000 and Rs. 1 million.Meanwhile, rejecting recent claims made by the Ceylon Motor Traders’ Association (CMTA), Merenchige said the alleged loss of government revenue was caused by the importation of brand-new vehicles.
The CMTA had earlier claimed that the Sri Lankan Government could face a massive revenue loss of between Rs. 100 billion and Rs. 120 billion in 2026 due to a tax loophole allegedly being utilized by used vehicle importers. According to the CMTA, the Government had already lost approximately Rs. 40 billion in 2025, while a further Rs. 54 billion had been lost between January and July 2026.Merenchige explained how imports of brand-new vehicles affect government revenue, referring to provisions in a 2016 Gazette notification. He urged authorities not to be misled by what he described as inaccurate claims.He said the vehicle shortage created by the five-year restriction on vehicle imports had now largely been addressed. However, he said a further number of vehicles was still required to fill the remaining gap in the market.
Merenchige claimed that vehicles had subsequently been imported in excessive numbers, exceeding actual market requirements, resulting in a decline in prices. He attributed the recent price reductions partly to the surcharge imposed by the Government, saying the measure had contributed to the downward movement in vehicle prices in the local market.