The recent easing of import restrictions marks a vital milestone for Sri Lanka’s automotive sector. After nearly four years of halted imports, the market is cautiously regaining momentum, an official of the Ceylon Motor Traders’ Association (CMTA) said.
Its Chairman Andrew Perera said there is renewed consumer confidence, and we are seeing gradual reactivation across key segments of the industry.
However, the institution representing leading automobile manufacturers in the world noted that while regaining momentum in the industry is a welcome development, the market remains in a delicate recovery phase.
Factors such as high import duties, limited access to foreign currency, and the need for consistent long-term policies continue to impact the industry’s growth, the Association notes. Nevertheless, the CMTA is optimistic about the sector’s future and believes this is an opportune moment to lay the groundwork for a more structured, transparent, and sustainable automotive industry.
On the new challenges the Association encounters today and the future of industry the motor trading body said that following the policy shift, the industry faces several pressing challenges such as high taxation and pricing pressures, exchange rate volatility, lack of infrastructure for public, hybrid and electric vehicles and uncertainty over long-term import regulations.
To overcome the challenges the CMTA proposes the following policy measures to support long-term development:
• Implementation of a consistent National Automotive Policy to provide clarity, predictability, and confidence for consumers and investors.
• Review and reform of the current policies to make vehicles imported are aligned with regional standards, while ensuring government revenue targets are met.
• Strict enforcement of the current import regulations, particularly the rule that all vehicles must be under three years old from the manufacturer’s date. This is a sound and transparent policy that ensures the quality, safety, and environmental standards of imported vehicles, and must be upheld without exception.
• Strong monitoring of valuation processes to prevent under-valuation and ensure the government does not lose vital revenue due to discrepancies.
• Uniform enforcement of import protocols, ensuring no individual or company is given preferential treatment or permitted to bypass the laws pertaining to imports and vehicle registrations.
• Focus on skill development and technology readiness to support the transition into next-generation automotive services and electrification.
However, the CMTA commends the Government for the responsible and well-structured manner in which vehicle import policies are being implemented.
“We are fully aligned with the objective of ensuring a fair, transparent, and future-ready automotive market in Sri Lanka,” he said.
The Ministry of Finance issued a new Gazette notification last month removing several restrictions on the import of vehicles enabling the release several types of cars that are at the port and were unable to be cleared after being imported.
“As the apex body representing the formal automotive industry in the country, the CMTA remains committed to working closely with all stakeholders in supporting the sustainable growth and development of the motor trade sector,” the CMTA chief said.
The first shipment of vehicles arrived in February following the lifting of the import restriction which was imposed to curtail the outflow of foreign exchange after the global pandemic.
