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Sri Lanka’s automotive market recorded strong growth in March, with total motor vehicle registrations increasing by 15.6% month-on-month to 59,734 units, according to the latest data compiled by JB Securities. The sharp rise is largely attributed to accelerating demand for electric vehicles (EVs), signalling a clear shift in consumer preferences across the country.
The surge in registrations comes amid broader economic pressures linked to foreign exchange outflows, with EV adoption emerging as a key driver of recent market momentum.
Strong performance across key vehicle segments
A detailed breakdown of March registrations shows mixed but generally upward trends across different vehicle categories.
Two-wheelers continued to dominate the market, accounting for 41,121 units, up 20.7% compared to the previous month. Leading brands included Bajaj, Honda, and TVS, reflecting sustained demand for affordable personal transport.
In the passenger vehicle segment, SUVs and crossovers grew 3.6% to 5,841 units, with Toyota and Honda among the most preferred brands. Motor car registrations rose 16.6% to 4,856 units, supported by strong demand for Suzuki and BYD models.
The three-wheeler category saw a slight contraction of 0.71%, recording 4,031 units. However, commercial and utility vehicles showed varied performance, with pickups increasing 32.6% to 606 units, medium trucks rising 15.9% to 394 units, and heavy trucks surging 46.4% to 303 units. On the other hand, vans fell 15.1% to 784 units, buses declined 2.6% to 263 units, and hand tractors dropped sharply by 43.8% to 59 units, while large tractors rose significantly by 87.3% to 470 units.
EV adoption accelerates sharply
One of the most notable trends in March was the rapid expansion of electric mobility. EV registrations jumped 165.1% month-on-month, reaching 8,834 units compared to 3,332 units in February.
Within this segment, electric cars recorded particularly strong growth, rising by 328.9%. Brands such as BYD played a leading role in driving this expansion. In contrast, hybrid vehicle registrations remained relatively stable but slightly declined, falling to 2,512 units from 2,542 units in the previous month.
Import costs remain elevated
Despite monthly fluctuations in expenditure, vehicle imports continue to place pressure on external finances. Central Bank data shows that Sri Lanka spent US$ 441.2 million on vehicle imports during the first two months of 2026, including US$ 312.2 million on personal vehicles and US$ 129 million on transport equipment.
While February recorded a 13.4% decline in import costs compared to January, the strong March registration figures suggest that underlying demand for vehicles remains robust.
Policy and market outlook
Economist Murtaza Jafferjee noted that rising fuel costs are likely to accelerate the shift toward electric vehicles, as consumers increasingly seek more cost-efficient alternatives. He also pointed out that rooftop solar adoption could further improve the viability of EV ownership in Sri Lanka.
However, he cautioned that the current taxation framework remains uneven, with excise duties structured differently across internal combustion, hybrid, and electric vehicles. According to him, this creates distortions in the market and highlights the need for policy reform to ensure a more balanced regulatory environment.
