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

Vehicle prices in Sri Lanka have experienced a notable decline, with certain small car models dropping by up to Rs. 1 million, according to the Vehicle Importers Association of Lanka (VIAL) Chairman Indika Sampath Merenchige. In an interview with the media, Merenchige emphasized that the present market conditions present an opportunity for prospective vehicle buyers to reserve their desired models, as prices may continue to fall.

He noted that several automobile dealers were currently selling vehicles at a loss, and the downward price trend was anticipated to persist, contingent on market dynamics. "Individuals contemplating vehicle purchases should take this opportunity to reserve their desired vehicles," Merenchige advised. However, he cautioned that vehicle prices could potentially surge once the market stabilises.

Merenchige refuted assertions by the Ceylon Motor Traders’ Association (CMTA) regarding potential government revenue loss. While the CMTA had argued that the government could lose between Rs. 100 billion and Rs. 120 billion in revenue by 2026 due to a tax loophole exploited by used vehicle importers, Merenchige attributed the revenue shortfall to the importation of brand-new vehicles.

He clarified that the impact of brand-new vehicle imports on government revenue is rooted in provisions from a 2016 Gazette notification. Merenchige urged authorities to disregard what he termed as inaccurate claims. He pointed out that the five-year restriction on vehicle imports had largely alleviated the vehicle shortage, although additional vehicles were still required to meet market demand.

Nonetheless, he contended that vehicle imports had surpassed market requirements, subsequently contributing to the price reduction. Merenchige also cited the government-imposed surcharge as a factor in the downward movement of vehicle prices.