Are Vehicle Prices Dropping Significantly in Sri Lanka?

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Sri Lanka has been recovering from a deep economic crisis. Within that context, discussions about removing the ban on vehicle importation have been arising, and social media users have been implicating the drop in vehicle prices. 

Social Media Posts 

Social media is abuzz with claims that vehicle prices in Sri Lanka have dropped drastically, with some posts citing reductions of up to 20 lakhs for certain vehicles. We investigated the validity of these claims within the context of Sri Lanka’s current vehicle market and the ongoing import restrictions.

FB | Archived 

The posts are based on a YouTube video.

Archived

The video talks about vehicle prices but does not specifically mention the 20 lakh price reduction; it just mentions the prices of a few vehicle types. However, it has a misleading caption: “Vehicle prices will drop from 20 lakhs.”

We decided to search on this. 

Explanation  

Background of the Vehicle Import Ban

Sri Lanka suspended vehicle imports in 2020  due to the economic crisis. While a cabinet decision in September 2024 under the previous government proposed a phased lifting of the ban starting in October 2023, no gazette was issued to formalise this decision. Since September 2024, the new government has not expressed any stance on resuming vehicle imports, leaving the import ban effectively in place.

As a result, the used vehicle market continues to dominate, and the limited supply keeps vehicle prices relatively high.

Despite social media posts suggesting that vehicle prices have dropped significantly, with some claiming reductions of 20 lakhs for vehicles and implicating a big price drop as a percentage, industry experts and data provide a different picture.

Insights from Experts

Viran De Zoysa, Chairman of Ceylon Motor Traders Association:

He says that there is an artificial price drop of around 10% in the vehicle market.

For instance, a vehicle priced at 100 lakhs may now cost 90 lakhs.

De Zoysa attributes this drop to manipulation by buyers and sellers spreading rumors to drive prices down temporarily, enabling them to buy vehicles at lower prices and later sell them at higher rates.

The Ceylon Motor Traders Association, however expecting the removal of motor vehicle importation  ban.

Kanishka Ginnaliya, Auto Direct.lk:

He confirmed a minor price drop of 5%-10%, citing rumors of the ban being lifted by March 2025 as the primary driver.

Example: A vehicle priced at 100 lakhs may now cost 90-95 lakhs.

He clarified that the percentage drop is relatively low compared to the overall cost of vehicles.

Other Vehicle Dealers (Ideal Motors   ):

They also say  no significant drop in vehicle prices when considering the overall cost.

They further states that  market remains inflated due to the absence of brand-new vehicle imports.

However, a representative of United Motors stated that some price reduction happening in market due to anticipated removal of the vehicle importation ban.

Riyasewana: We also contacted RiyaSewana,one of the leading web-based vehicle buying and selling platform and they stated that there was no price dropping tendency and stated that there is upward trend for certain vehicles.

Below is their statistics for Toyota Premio 2018, Toyota Aqua 2013, and Honda Vezel 2014) over the past 60 days. 

Analysis of the Market

Used Vehicle Market: With no imports since 2020, demand for used vehicles remains high, keeping prices elevated.

Artificial Manipulation: Certain individuals in the vehicle trade appear to exploit market rumors, artificially reducing prices in the short term to facilitate profitable resale.

Rumors of Import Resumption: Speculation about the lifting of the import ban in 2025 has contributed to minor price adjustments, but these do not align with the substantial reductions claimed on social media.

The prices of used vehicles in Sri Lanka, which are still at inflated prices, can be read here 

Prices of popular cars in the used car market 

Meanwhile ,Toyota Lanka released prices for brand-new vehicles for 2025 .

A representative of Toyota Lanka group stated that this price listing was done after five years from the vehicle importation  ban with the expectation of the possible removal of the ban in 2025.However he added that around a year ago price list for some limited number of vehicles for tourism industry released when government gave some relief to import the vehicles for tourism sector.Under this few vehicle types imported like Toyota Hiace.But this time those vehicle prices bit higher due to technical reasons.And he added that 18% VAT will be added to mentioned prices 

Electric and Hybrid Vehicles 

We contacted the EV club of Sri Lanka and they stated that no significant price reduction for electric and hybrid vehicles.They added that there was some minor price drop due to panic selling.But now ,there is a bit upward trend of hybrid and electric vehicle prices. 

“You cant buy 80 lakhs vehicle for 60 lakhs now.Those are fake rumours”,he added. 

We also contacted vehicle valuation services and got their version, too. Director of the S&T vehicle valuation centre told us that there is no significant drop in the vehicle prices currently.However ,he added that if government announce the date of the removal of the importation of vehicles, the prices will be dropped suddenly upto a certain level.

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Conclusion:

The claim that vehicle prices in Sri Lanka have dropped significantly by 20 lakhs is misleading. While there is evidence of a minor price drop (5%-10%) in the used vehicle market for some vehicle types, this is largely due to artificial manipulation and rumors of the import ban being lifted. The broader market remains inflated, with no substantial price reduction for either used or new vehicles due to the ongoing import restrictions.It`s not worthy that prices of some used vehicle types shows upward trend in previous two months. 

Buyers should be cautious about rumors and market manipulation. Verify prices from reputable dealers to avoid falling prey to artificially low rates.