Cyclone Ditwah devastates Sri Lankan vehicle market as sales plummet

The Sri Lankan motor trade is facing a severe crisis following Cyclone Ditwah, with vehicle sales dropping by as much as 50 per cent. Prasad Manage, the President of the Ceylon Automobile Importers Association, reported that the natural disaster has left many prospective buyers unable to complete their purchases.

"When your house is flooded, you are no longer thinking of buying cars," Mr Manage explained. He noted that customers in Kandy and other flood-affected regions are now requesting refunds for their deposits due to financial hardship.

Importers are also struggling under a heavy financial burden. They are currently hit with a 3 per cent monthly penalty on vehicles that remain unsold for more than three months, alongside interest rates on import loans of approximately 10 per cent. The Association has called for a six-month extension on the penalty period to prevent further industry collapse.

The downturn comes at a time of broader economic instability. Despite car imports boosting tax revenues earlier in 2025, the market was already slowing before the cyclone hit. The Sri Lankan rupee has continued to weaken throughout the year, even following interest rate cuts in May, leading to stricter import and exchange controls.