Importers say vehicle prices have fallen by about Rs. 1 million

Vehicle prices in the local market have dropped significantly, with some models falling by about Rs. 1 million, the Vehicle Importers Association of Lanka said.

The association’s President, Indika Sampath Merinchige, made the claim at a media briefing in Colombo on Wednesday (16 September), Hiru News reported.

The claim comes from the trade body itself rather than from an independent price survey, and no government agency has published figures confirming a market-wide fall. Hiru headlined its own report with the qualifier “allegedly”.

A reversal of the sector’s recent warnings

The statement runs against the direction importers themselves were forecasting only weeks ago.

In August, vehicle importers predicted prices could rise by between Rs. 500,000 and Rs. 5 million as a result of the 50% customs surcharge on specified imported vehicles — the context in which a Wayamba University economist said mafia influence behind price rises could not be ruled out.

In June, a vehicle importers’ body warned that used-vehicle prices were set to surge after a 15% Customs valuation reduction was removed, putting the likely increase on a Honda Vezel at around Rs. 2 million.

A note on attribution: that June warning came from the Vehicle Importers’ Association of Sri Lanka (VIASL), quoting Vice President Arosha Rodrigo. Thursday’s report names the Vehicle Importers Association of Lanka and Merinchige as its president. Whether these are the same body under an inconsistently rendered name, or two separate associations, is not clear from the reporting.

Financing and dealer activity is expanding regardless

Motor-trade investment has continued through the period. This week Union Bank signed an agreement with Toyota Lanka on vehicle leasing solutions — the third such dealer financing tie-up in six weeks — and David Pieris opened a BAIC showroom in Kandy.

Update: a second outlet, and the models named

The Daily Mirror carried its own report on 18 September, corroborating the claim and answering several questions Hiru’s account left open.

The models said to have fallen are the Toyota Yaris, Toyota Raize, Honda Vezel, Suzuki Wagon R, Daihatsu Mira and Suzuki vans, with declines of between Rs. 400,000 and Rs. 1 million — placing the “about Rs. 1 million” figure at the top of a range rather than across the market. Small vehicles, he said, had fallen by at least Rs. 1 million.

Merenchige added two claims Hiru did not carry: that most traders are currently selling at a loss, and that prices are expected to fall further before rising again once the market stabilises. He advised buyers to reserve vehicles now.

He also said the shortage created by the five-year import restriction had now largely been addressed, though further vehicles were still needed.

A dispute with the Ceylon Motor Traders’ Association

The Daily Mirror report places the remarks inside an argument between two trade bodies over who is costing the Treasury money.

The Ceylon Motor Traders’ Association (CMTA) has claimed the government faces a revenue loss of Rs. 100–120 billion in 2026 through a tax loophole it attributes to used-vehicle importers, and says roughly Rs. 40 billion was lost in 2025 and a further Rs. 54 billion between January and July 2026.

Merenchige rejected that, arguing the revenue loss is instead caused by the importation of brand-new vehicles, and citing provisions of a 2016 Gazette notification. He urged authorities not to be misled.

Neither outlet reports a response from the CMTA to that rebuttal, and neither publishes the underlying calculation behind any of the CMTA’s three figures.

A note on the name and title

The two outlets differ on both. Hiru calls him President of the association and spells the surname Merinchige; the Daily Mirror calls him Chairman and spells it Merenchige. The body is the same in both accounts. This report retains each outlet’s own rendering where it is quoting that outlet.

Not reported

Neither account gives the period over which the decline was measured, the association’s membership, or any transaction data behind the figures. Neither carries a response from Customs or the Finance Ministry, and neither explains why prices are falling — the mechanism is asserted by the trade body but not accounted for by either report.