Vehicle prices in Sri Lanka are expected to rise in the near future, the Vehicle Importers’ Association of Sri Lanka (VIASL) said on Sunday, citing the continued depreciation of the rupee against the US dollar and recent tax increases on imported vehicles.
VIASL President Prasad Manange said the combination of currency weakness and higher import duties would push up the cost of imported vehicles for consumers.
The warning comes after the Sri Lankan rupee weakened past Rs. 320 per dollar on April 30, the lowest level in months, eroding margins for importers who price inventory in foreign currency. Vehicle imports are mostly invoiced in dollars or yen, leaving dealers with limited room to absorb exchange-rate moves before passing them to buyers.
The signal lands after a record import surge in the first quarter of the year. The Central Bank reported that vehicle imports reached Rs. 195.95 billion in Q1 2026, a roughly nine-fold increase year-on-year, as buyers rushed to clear orders ahead of an anticipated tax revision. The Department of Motor Traffic also recorded an all-time high in vehicle registrations during March ahead of the change.
Sri Lanka lifted a multi-year vehicle import ban in February 2025 under its IMF-backed programme, with phased categories of vehicles cleared for imports through 2025 and 2026 alongside revised excise structures. Manange’s remarks suggest the next phase of pricing for new orders will reflect both the weaker exchange rate and the tax adjustments now flowing through the import chain.
Source: Ada Derana.
