Three-wheelers, cars drive May vehicle registration surge

Sri Lanka’s vehicle market regained momentum in May, with the registrations rising more than 22 percent from the previous month, as the demand recovered across passenger vehicles, three-wheelers and motorcycles, following the reopening of imports.
Total registrations rose to 62,776 units in May, from 51,156 in April, according to JB Securities, with the strongest contribution coming from three-wheelers, a segment often viewed as a proxy for self-employment and small-scale economic activity.
The three-wheeler registrations climbed to 5,669 units, from 1,355 units in April, marking the strongest monthly performance since the imports resumed. Bajaj accounted for more than four-fifths of registrations, while electric three-wheelers also recorded a sharp increase.
The broader recovery extended to passenger vehicles, with motor car registrations rising to 4,738 units, from 3,238 units a month earlier. The registrations of brand-new cars more than doubled to 1,199 units, driven largely by the Chinese manufacturers BYD and BAW, highlighting the growing presence of the Chinese brands in Sri Lanka’s newly reopened vehicle market.
The BYD registrations rose to 847 units in May, from 247 units in April, supported by a strong demand for its Atto, Dolphin and Sealion ranges. The BAW registrations increased to 553 units, from 238 units, driven almost entirely by its E7 entry-level electric vehicle (EV).
The sport utility vehicle (SUV) and crossover registrations also strengthened, rising to 5,511 units, from 4,853 units in April. Toyota retained its position as the dominant player in the segment, followed by Honda and Suzuki, with the vehicles below 1,500cc continuing to account for the overwhelming majority of registrations. 

According to the report, the consumers remain highly price sensitive, despite the market recovery. Small cars accounted for more than 98 percent of new car registrations, while the compact SUVs represented over 95 percent of the crossover market.
A notable trend during the month was the divergence between the hybrid and electric vehicle demand. The hybrid registrations increased to 2,745 units, from 2,316 units in April, led by Honda and Toyota, while the total EV registrations fell to 6,248 units, from 8,098 units, largely due to the weaker electric two-wheeler volumes.
Two-wheelers remained the backbone of the market, accounting for nearly 70 percent of all registrations. The segment expanded to 43,842 units, from 38,631 units in April, supported by a strong demand for the scooters and motorcycles manufactured by Bajaj, TVS, Honda, Yamaha and Hero.
The recovery was also reflected in the import patterns. The Indian vehicle imports surged to 38,145 units, from 27,165 units in April, reinforcing India’s dominance in motorcycles, three-wheelers and compact passenger vehicles. The Japanese imports increased to 7,834 units, while the Chinese imports benefited from the rebound in the BYD and BAW volumes.
Despite the increase in registrations, the financing penetration across several passenger vehicle categories remained below 50 percent, indicating that a significant portion of purchases continue to be funded through cash rather than credit.